1 February 2024
VARIOUS EATERIES
PLC
("Various Eateries" or "the Company"
and
with its subsidiaries "the Group")
Final
Results
52-week
period ending 1 October 2023
Poised to accelerate
following a year of steady progress and a successful post-period
fundraise
Various Eateries PLC, the owner,
developer and operator of all day clubhouse, restaurant and hotel
sites in the United Kingdom, announces its results for the 52 weeks
ended 1 October 2023.
Financial Highlights
· Revenue growth of 12% to £45.5m (2022: £40.7m), largely
driven by new site openings
· Adjusted EBITDA* loss of £2.2m (2022: profit of £0.4m), with
the Board choosing to absorb the majority of price rises to
strengthen the Group's longer-term prospects
· Total loss before tax of £6.7m (2022: loss of
£7.2m)
· Cash
at bank of £1.9m (2022: £9.4m)
· Net
debt of £11.6m (2022: £3.3m)
* not audited see Financial
Review
Operational Highlights
· Resilient performance in the year with LFL sales holding
relatively firm despite well-publicised industry
challenges
· Measured approach to expansion with the opening of two new
Noci restaurants and one Coppa Club
· Continuous mitigation of the inflationary environment through
supply chain management and menu re-engineering
· Strengthened senior management team with appointment of
Sharon Badelek as CFO, Rebecca Tooth as MD of Coppa Club (non-board
position) and Scott Williamson as People Director (non-board
position)
Post-period Highlights & Outlook
· Successful fundraise of £10.1m and conversion of debt into
equity
· Encouraging signs that the inflationary environment is
normalising
· Plans to open up to ten Noci sites and up to three Coppa Club
sites in the next phase of roll-out
Andy Bassadone, Executive Chairman of Various Eateries,
said:
"Performance in the year under review was solid given the
host of challenges faced by the industry. We have continued to
focus on customer loyalty, brand reputation and maintaining
revenue, and I am proud of our teams for all their hard
work.
We enter the new financial year in a position of strength
having raised £10.1m and converted debt into equity in December.
The convergence of site availability, reduced competition and
changing consumer behaviours has brought forth a generational
opportunity akin to the casual dining revolution of the 90s and we
are well set to capitalise.
Inflationary pressures have been a major thorn in the side of
all hospitality businesses in the period but encouragingly there
are signs they are beginning to abate while interest rates appear
to be cooling. We are not out of the woods yet by any means but we
are confident our approach is the right one to ensure the long-term
prosperity of the Group.
We are excited about what we are building and look forward to
the challenges and opportunities of the year ahead with
confidence."
Annual General Meeting and Posting of
Results
 
The Company confirms that it
intends to distribute its Annual Report and Accounts and notice of
Annual General Meeting to shareholders shortly. A further
announcement will be made at that time. A copy of the annual report
and accounts will also be available from the Company's website at
the same time (www.variouseateries.co.uk).
 
Enquiries
Various Eateries plc
|
|
Via Alma
|
Andy Bassadone
Sharon Badelek
|
Executive
Chairman
Chief Financial Officer
|
|
WH Ireland Limited
|
Sole Broker and NOMAD
|
Tel: +44 (0)20 7220
1666
|
Broking
Harry Ansell
|
|
|
Nominated Adviser
Katy Mitchell
|
|
|
Darshan Patel
|
|
|
Alma Strategic Communications
|
Financial PR
|
Tel: +44 (0)20 3405
0205
|
David Ison
Rebecca Sanders-Hewett
Will Merison
|
|
variouseateries@almastrategic.com
|
About Various
Eateries
Various Eateries owns, develops
and operates restaurant, clubhouse and hotel sites in the United
Kingdom. The Group's stated mission is "great people delivering
unique experiences through continuous innovation".
The Group is led by a highly
experienced senior team including Hugh Osmond (Founder), Andy
Bassadone (Executive Chairman) and Sharon Badelek (CFO).
The Group operates two core brands
across 18 locations:
· Coppa Club, a multi-use, all day concept that combines
restaurant, terrace, café, lounge, bar and work spaces
· Noci, a modern, neighbourhood pasta-only concept which serves
very high-quality dishes at reasonable prices
For more information
visit www.variouseateries.co.uk
Chairman's Statement
£10.1m placing to fuel expansion following a resilient
year
I am pleased to be publishing
these results on the back of a successful post-period fundraise and
conversion of debt into equity, positioning the Group on a
trajectory of accelerated growth. This allows us to move forward
with enhanced financial firepower and our sights firmly set on
expansion.
Performance in the year under
review was solid given the host of challenges faced by the
industry, with like-for-like sales standing relatively firm.
Experience tells us that in difficult periods, maintaining customer
loyalty and brand reputation is paramount, so we made the conscious
decision to absorb the majority of price rises. While this strategy
put pressure on our margins in the year, taking a longer-term view
we are confident it will stand us in good stead.
As we move into FY24, there are
encouraging signs that the inflationary landscape is beginning to
normalise. Volatility remains and the rate at which certain
pressures will abate is difficult to forecast, but conditions
appear to be gradually improving. Supported by strong cash reserves
and a refined focus, we will continue to pursue our roll-out
strategy in a measured and sustainable way, exercising financial
discipline while maintaining the ambition necessary to capitalise
on the current opportunity.
A
multi-brand hospitality business with a generational
opportunity
The Group's strategy is built
around the expansion of two proven brands, each designed to fill a
specific gap in the market.
Noci, a modern neighbourhood pasta
restaurant that evolved from the Group's Tavolino concept, is the
Group's newest venture. Designed to fill the void left by the
reduction of operators in the Italian mid-market sector and deliver
profitability in c. 3,000 sq ft spaces, Noci's focus on delivering
high quality food at an affordable price point provides it with a
layer of protection in the event of tightening consumer
spend.
Coppa Club, the Group's all-day
clubhouse proposition, has been conceived to meet the evolving
consumer behaviour trends accelerated by Covid, such as the shift
to flexible/hybrid working. From dramatic full-service riverside
locations with vast outdoor spaces, to high street hubs benefitting
from city centre footfall throughout the seasons, the concept is
designed to suit all occasions, from coffee, breakfast and weekend
brunches, to lunches, dinner celebrations and late-night
drinks.
Underpinning Various Eateries'
growth ambitions are a unique set of circumstances that the Board
believes form an opportunity akin to the casual dining revolution
of the 1990s.
The directors believe that before
Covid, the hospitality industry had become saturated with
homogenous operators whose priorities had diverged from quality of
food and service. Already struggling to adapt to the impact of
Brexit, the lengthy restrictions on trading imposed by the
government during the pandemic dealt a killing blow to many of
these businesses.
The unprecedented price increases,
rising energy bills and reduction in consumer disposable income
that followed in the wake of the Russo-Ukrainian War further
destabilised the industry.
The closure of many operators
throughout the Covid-19 pandemic has given rise to the increased
availability of sites in prime locations, often coming with
extensive existing fit outs that result in considerable savings on
capital investment. Coupled with favourable rates and reduced
competition, this presents a clear opportunity for well-funded
operator with flexible, forward-thinking brands and a strategy
attuned to market dynamics.
Steady trading performance in a year characterised by
industry-wide challenges
Trading performance for the period
was in line with expectations. Revenues were slightly higher than
market expectations at £45.5m (2022: £40.7m), largely driven by new
site openings.
Group like-for-like sales ("LFL"),
excluding the benefit of the reduced rate of VAT in the prior year,
held relatively firm, which is a satisfactory performance
considering the challenging macroeconomic environment, continued
train strikes and unseasonably wet weather in the spring and summer
months. The Board believes focusing on the top line as opposed to
pursuing short-term profit maximisation to be fundamentally
important to long-term, sustainable success.
Noci continues to perform well. H2
(April to September 2023) LFL sales at the first Noci site in
Islington grew 23%. Although still in the first months of their
existence, initial trading at our second and third sites in
Battersea Power Station and Shoreditch has been
promising.
The Group's townhouse Coppa Clubs
in Bath and Guildford, benefiting from high footfall town centre
locations, delivered positive performances. The Coppa Clubs with
large outdoor spaces, which benefitted in the prior year from
exceptionally good weather, were impacted this year by extended
periods of unusually wet conditions, including the wettest July
since 2009.
Trading at the Group's Tavolino
site was strong, delivering LFL sales growth of 10%.
Managing cost pressures and growing optimism around inflation
outlook
We took a proactive approach to
addressing the inflationary pressures that persisted throughout the
year, for example employing innovative menu engineering to trim
unnecessary costs while upholding the quality of our food. An
increased emphasis on seasonal rotation, for example, allowed us to
continue to provide fresh, premium ingredients without the added
expense linked to year-round sourcing.
There are encouraging signs that
the cost surges are beginning to subside. Food and energy costs,
which were remarkably elevated through much of FY23, are starting
to become more manageable. It will take time for conditions to
normalise and we will continue to maintain relentless focus on
becoming more operationally efficient as a Group. Aligned to this,
we are currently exploring several technological solutions which we
expect to boost the overall productivity of our colleagues while
positively impacting the customer experience.
While the rise in National Living
Wage in April 2024 will have an impact on labour costs, the market
is in a much better state than it was 12 months ago, with staffing
shortages largely under control and a healthy pool of talented and
motivated people available to us. During the year, our workforce
grew significantly, and we maintained a low level of vacancies. A
lot of hard work goes on behind the scenes to make Various Eateries
a great place to work, learn and progress in the industry, and it
is heartening to see it paying dividends.
Continued growth of estate and poised to
accelerate
During the financial year, the
Group opened three new sites taking the total to 18: Coppa Club
Guildford, Noci Battersea Power Station and Noci
Shoreditch.
Coppa Club Guildford, which opened
in April 2023, is the second iteration of our townhouse format. A
three-storey, all day venue on the busy high street, it boasts
café-work space on the ground floor and a bold mural leading the
guests' eye up the stairwell to the first-floor dining space and
destination bar on the top floor.
The Board believes there is
significant potential for the expansion of Coppa Club, with the
next opening in Cardiff this spring.
Opening in May 2023, the Group's
second Noci site is located in the comprehensive commercial and
residential redevelopment of one of London's most iconic landmarks,
Battersea Power Station. Noci Shoreditch, located just off Old
Street Roundabout in the heart of the capital's Tech City, followed
suit in September 2023.
The Group believes Noci to be the
most compelling near-term growth opportunity and intends to open up
to ten new sites over the next couple of years. While the immediate
roll out is expected to be focused on the Greater London area,
market research leads the Board to believe there are over 100
suitable sites in the UK.
Significantly strengthened management team
In February 2023, we announced the
appointment of Sharon Badelek as Chief Financial Officer and board
member with effect from 1 April 2023. Sharon has an established
track record of driving growth in businesses in our sector, with an
impressive CV that includes senior financial positions at RedCat
Pub Company, Vue Entertainment and Novus Leisure Limited. To have
attracted someone of Sharon's calibre demonstrates the strength of
our proposition and ambition. She has already had a positive impact
on our finance function and played an important role in the recent
fundraise.
As part of the refocusing of our
strategy around the two brands, Rebecca Tooth, formerly of Bills
and Cote, was appointed as Managing Director of Coppa Club, while I
assumed the role of Managing Director of Noci, having led the
concept from inception. The Board believes the new management
structure to be conducive to the long-term success of both brands,
with dedicated leadership that understand the nuances of each
concept and simplified reporting lines that promote quick and
effective decision-making.
Oli Williams, former CFO, and
Yishay Malkov, former CEO, both left the Group during the year. I
would like to again thank them for their significant contributions
and wish them all the best for the future.
Investing in our people
During the year under review, we
continued to prioritise the wellbeing and development of our
colleagues. To facilitate this, a new people director (non-board
position), Scott Williamson, joined the group in November 2023.
Scott has been in the hospitality industry since the age of 18 and
brings a wealth of experience having worked in bars, restaurants
and hotels throughout the world including, Firmdale Hotels,
Carluccios, Bill's and Côte. Scott has already had a positive
impact on training programmes across Various Eateries and will
continue to build on this in 2024.
I would like to express my
heartfelt appreciation for everyone at Various Eateries for their
dedication and resolve during what was another challenging year for
the industry. Without their commitment to upholding the high
standards we set as a Group, we would not have been able to grow
our reputation as we have, and I am grateful for their
efforts.
Current trading and outlook
Sales in the first quarter of FY24
were in line with management expectations.
As we move into the second
quarter, we are optimistic that inflationary pressures will
continue to ease and interest rates will at least not rise further,
but this remains difficult to predict.
Regardless, we will continue to
focus on what is within our control - growing the top line and
taking action to ensure high levels of customer satisfaction and
improving operational efficiency.
We are building a Group for the
long-term and believe this approach will position us well for
sustainable, profitable growth and value creation for shareholders
as conditions improve.
At the same time, we will continue
to explore ways to make the business more efficient while
progressing our roll-out at a measured pace commensurate with
market conditions.
Financial Review
Overview
The first half of the financial
results for FY22 benefitted from Covid related reliefs and reduced
VAT rates, which did not continue into the FY23 financial
year.
The KPI's of the Group's
performance are summarised in the table below:
|
52 weeks
ended
1 October
2023
|
|
52 weeks
ended
2 October
2022
|
|
Change
|
|
£ 000
|
|
£ 000
|
|
%
|
|
|
|
|
|
|
Revenue
|
45,495
|
|
40,667
|
|
12%
|
Adjusted EBITDA (before impact of
IFRS 16)*
|
(2,189)
|
|
437
|
|
(601%)
|
Adjusted EBITDA*
|
1,556
|
|
3,531
|
|
(56%)
|
Operating Loss
|
(4,207)
|
|
(5,209)
|
|
19%
|
Total loss for the year after
tax
|
(6,677)
|
|
(7,215)
|
|
7%
|
Basic and diluted earnings per
share (pence)
|
(8.1)
|
|
(8.8)
|
|
7%
|
Cashflow from operating
activities
|
2,082
|
|
1,861
|
|
12%
|
Net debt/ (cash) excluding lease
liabilities
|
11,609
|
|
3,317
|
|
250%
|
Number of sites
|
18
|
|
15
|
|
20%
|
* not audited
|
|
|
|
|
|
Summary of financial performance for the 52 weeks ended 1
October 2023
|
52 weeks
ended
1 October
2023
|
|
52 weeks
ended
2 October
2022
|
|
£ 000
|
|
£ 000
|
Reconciliation of loss before tax to Adjusted
EBITDA
|
|
|
|
Revenue
|
45,495
|
|
40,667
|
Loss before tax
|
(6,677)
|
|
(7,215)
|
Impairment
|
-
|
|
2,543
|
Financing costs
|
2,470
|
|
2,006
|
Depreciation and
amortisation
|
5,571
|
|
4,702
|
Gain on surrender of
lease
|
(899)
|
|
-
|
Loss on disposal of assets and
leases
|
37
|
|
54
|
EBITDA
|
502
|
|
2,090
|
Pre-opening costs*
|
886
|
|
755
|
Share-based payments
|
69
|
|
830
|
Non-trading site costs*
|
(27)
|
|
(144)
|
Exceptional costs*
|
126
|
|
-
|
Adjusted EBITDA*
|
1,556
|
|
3,531
|
Adjustment for rent
expense
|
(3,745)
|
|
(3,094)
|
Adjusted EBITDA (before impact of IFRS 16)*
|
(2,189)
|
|
437
|
* not audited
|
|
|
|
FINANCIAL PERFORMANCE
Overall Group revenue increased by
12% (FY23: £45.5m, FY22: £40.7m). The Group's adjusted EBITDA
decreased by £1.9m, from £3.5m in FY22 to £1.6m in FY23. During the
year, the Group was faced with significant cost increases due to
external economic factors which were not fully passed onto
customers. In the Board's experience, in challenging market
conditions, focusing on the Group's revenue, as opposed to
maximisation of short-term profits through cost cutting, is
fundamental to future success.
The loss before tax has decreased
from £7.2m in FY22 to £6.7m in FY23. In FY23 the Group incurred
impairments to goodwill and right‑of‑use assets of £nil (FY22: £2.5m).
The Group's depreciation and amortisation charge has increased by
£0.9m (from £4.7m in FY22 to £5.6m in FY23) and pre-opening costs
have increased by £0.1m (from £0.8m in FY22 to £0.9m in FY23), as
we have continued to invest in new sites. The Group's share based
payment charge has decreased by £0.7m (from £0.8m in FY22 to £0.1m
in FY23).
Consolidated Statement of Comprehensive
Income
For the 52 weeks ended 1 October 2023
|
|
52 weeks
ended
1 October
2023
|
|
52 weeks
ended
2 October
2022
|
|
Note
|
£ 000
|
|
£ 000
|
|
|
|
|
|
Revenue
|
4
|
45,495
|
|
40,667
|
Cost of sales
|
|
(43,597)
|
|
(36,992)
|
Gross profit
|
|
1,898
|
|
3,675
|
Central staff costs
|
|
(3,426)
|
|
(2,617)
|
Share-based payments
|
26
|
(69)
|
|
(830)
|
Impairment of goodwill
|
13
|
-
|
|
(1,563)
|
Impairment of property, plant and
equipment
|
14
|
-
|
|
(980)
|
Gain on early surrender of
lease
|
|
899
|
|
-
|
Loss of property, plant and
equipment
|
|
(37)
|
|
(54)
|
Other expenses
|
11
|
(3,472)
|
|
(2,840)
|
Operating loss
|
|
(4,207)
|
|
(5,209)
|
Financing costs
|
6
|
(2,470)
|
|
(2,006)
|
Loss before tax
|
|
(6,677)
|
|
(7,215)
|
Tax
|
10
|
-
|
|
-
|
Loss for the period
|
|
(6,677)
|
|
(7,215)
|
|
|
|
|
|
|
|
|
|
|
Earnings per share
|
|
|
|
|
Basic loss per share
(pence)
|
12
|
(8.1)
|
|
(8.8)
|
Diluted loss per share
(pence)
|
12
|
(8.1)
|
|
(8.8)
|
The above results were derived
from continuing operations.
There are no items of
comprehensive income other than the loss for the period and
therefore, no statement of other comprehensive income is
presented.
Consolidated Statement of Financial
Position
As at 1 October 2023
|
|
|
|
|
|
|
1 October
2023
|
|
2 October
2022
|
|
|
Note
|
£ 000
|
|
£ 000
|
|
|
|
|
|
|
|
Non-current assets
|
|
|
|
|
|
Intangible assets
|
13
|
11,152
|
|
11,214
|
|
Right-of-use assets
|
14
|
24,873
|
|
26,109
|
|
Other property, plant and
equipment
|
14
|
25,397
|
|
21,592
|
|
|
|
61,422
|
|
58,915
|
|
Current assets
|
|
|
|
|
|
Inventories
|
16
|
1,078
|
|
808
|
|
Trade receivables
|
17
|
154
|
|
204
|
|
Other receivables
|
17
|
2,082
|
|
2,359
|
|
Cash and bank balances
|
18
|
1,902
|
|
9,390
|
|
|
|
5,216
|
|
12,761
|
|
Total assets
|
|
66,638
|
|
71,676
|
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
Trade and other payables
|
19
|
(13,380)
|
|
(11,420)
|
|
Borrowings
|
20
|
(13,511)
|
|
(12,707)
|
|
|
|
(26,891)
|
|
(29,601)
|
|
Net
current liabilities
|
|
(21,675)
|
|
(11,366)
|
|
Total assets less current liabilities
|
|
39,747
|
|
47,549
|
|
|
|
|
|
|
|
Non-current liabilities
|
|
|
|
|
|
Borrowings
|
21
|
(28,049)
|
|
(29,244)
|
|
Provisions
|
22
|
(358)
|
|
(357)
|
|
Total non-current liabilities
|
|
(28,407)
|
|
(29,601)
|
|
Total liabilities
|
|
(55,298)
|
|
(53,728)
|
|
Net
assets
|
|
11,340
|
|
17,948
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
Share capital
|
23
|
890
|
|
890
|
|
Share premium
|
|
52,284
|
|
52,284
|
|
Merger reserve
|
|
64,736
|
|
64,736
|
|
Employee benefit trust shares
reserve
|
|
(5,012)
|
|
(5,012)
|
|
Retained earnings
|
|
(101,558)
|
|
(94,950)
|
|
Total funds attributable to the equity shareholders of the
Company
|
|
11,340
|
|
17,948
|
|
|
|
|
|
|
|
|
|
|
The financial statements of
Various Eateries PLC (registration number: 12698869) were approved
by the Board and authorised for issue on
They were signed on its behalf
by:
S Badelek
Director
Consolidated Statement of Changes in Equity
for the 52 weeks ended 1 October 2023
|
Called-up share
capital
|
|
Share premium
account
|
|
Merger
reserve
|
|
Employee benefit trust
shares reserve
|
|
Retained
Earnings
|
|
Total
|
Attributable to equity shareholders of the
Company
|
£ 000
|
|
£ 000
|
|
£ 000
|
|
£ 000
|
|
£ 000
|
|
£ 000
|
At
3 October 2021
|
890
|
|
52,284
|
|
64,736
|
|
(5,012)
|
|
(88,565)
|
|
24,333
|
Share based payments
|
-
|
|
-
|
|
-
|
|
-
|
|
830
|
|
830
|
Total transactions with owners
|
-
|
|
-
|
|
-
|
|
-
|
|
830
|
|
830
|
Loss for the period
|
-
|
|
-
|
|
-
|
|
-
|
|
(7,215)
|
|
(7,215)
|
Total comprehensive loss
|
-
|
|
-
|
|
-
|
|
-
|
|
(7,215)
|
|
(7,215)
|
At
2 October 2022
|
890
|
|
52,284
|
|
64,736
|
|
(5,012)
|
|
(94,950)
|
|
17,948
|
Share based payments
|
-
|
|
-
|
|
-
|
|
-
|
|
69
|
|
69
|
Total transactions with owners
|
-
|
|
-
|
|
-
|
|
-
|
|
69
|
|
69
|
Loss for the period
|
-
|
|
-
|
|
-
|
|
-
|
|
(6,677)
|
|
(6,677)
|
Total comprehensive loss
|
-
|
|
-
|
|
-
|
|
-
|
|
(6,677)
|
|
(6,677)
|
At
1 October 2023
|
890
|
|
52,284
|
|
64,736
|
|
(5,012)
|
|
(101,558)
|
|
11,340
|
Consolidated Statement of Cash Flows
for the 52 weeks ended 2 October 2022
|
|
52 weeks
ended
1 October
2023
|
|
52
weeksended
2
October2022
|
|
|
£ 000
|
|
£ 000
|
|
|
|
|
|
|
|
|
|
|
Cash flows from operating activities
|
|
|
|
|
Loss for the year
|
|
(6,677)
|
|
(7,215)
|
Adjustments to cash flows from
non-cash items:
|
|
|
|
|
Depreciation and
amortisation
|
|
5,571
|
|
4,702
|
Impairment loss
|
|
-
|
|
2,543
|
Gain on early surrender of
lease
|
|
(899)
|
|
-
|
Loss on disposal of assets and
leases
|
|
37
|
|
54
|
Share based payments
|
|
69
|
|
830
|
Financing costs
|
|
2,470
|
|
2,006
|
|
|
571
|
|
2,920
|
Working capital
adjustments:
|
|
|
|
|
Increase in inventories
|
|
(270)
|
|
(262)
|
(Increase) / decrease in trade and
other receivables
|
|
327
|
|
(1,059)
|
Increase in accruals, trade and
other payables
|
|
1,454
|
|
262
|
Net
cash flow from operating activities
|
|
2,082
|
|
1,861
|
Cash flows used in investing activities
|
|
|
|
|
Purchases of property plant and
equipment
|
|
(6,845)
|
|
(8,852)
|
Net
cash flows from investing activities
|
|
(6,845)
|
|
(8,852)
|
Cash flows from financing activities
|
|
|
|
|
Interest paid
|
|
(1,627)
|
|
(1,345)
|
Repayment of borrowings
|
|
-
|
|
(431)
|
Principal elements of lease
payments
|
|
(1,098)
|
|
(1,559)
|
Net
cash flows used in financing activities
|
|
(2,725)
|
|
(3,335)
|
Decrease in cash
|
|
(7,488)
|
|
(10,326)
|
Opening cash at bank and in
hand
|
|
9,390
|
|
19,716
|
Closing cash at bank and in hand
|
|
1,902
|
|
9,390
|
Notes to the accounts
4 Revenue
An analysis of the Group's total
revenue (including sublease rental income shown within cost of
sales) which all originates in the UK is as follows:
|
52 weeks
ended
1 October
2023
|
|
52 weeks
ended
2 October
2022
|
|
£ 000
|
|
£ 000
|
|
|
|
|
Sale of goods
|
41,437
|
|
36,523
|
Accommodation and room
hire
|
4,025
|
|
4,086
|
Sub-let rental income
|
33
|
|
58
|
|
45,495
|
|
40,667
|
6
Finance costs
|
52 weeks
ended
1 October
2023
|
|
52 weeks
ended
2 October
2022
|
|
£ 000
|
|
£ 000
|
|
|
|
|
Interest on bank overdrafts and
borrowings
|
897
|
|
661
|
Lease liability interest
|
1,573
|
|
1,344
|
Foreign exchange loss
|
-
|
|
1
|
Total financing costs
|
2,470
|
|
2,006
|
Net
finance costs
|
2,470
|
|
2,006
|
10 Tax
Tax charged in the statement of
comprehensive income
|
52 weeks
ended
1 October
2023
|
|
52 weeks
ended
2 October
2022
|
Tax expense
|
£ 000
|
|
£ 000
|
|
|
|
|
Corporation tax
|
-
|
|
-
|
Total current income tax
|
-
|
|
-
|
Tax expense in the statement of
comprehensive income
|
-
|
|
-
|
Corporation tax is calculated at 25%
(2022: 19%) of the estimated taxable loss for the
period.
|
The charge for the period can be
reconciled to the loss in the statement of profit or loss as
follows:
|
|
52 weeks
ended
1 October
2023
|
|
52 weeks
ended
2 October
2022
|
|
£ 000
|
|
£ 000
|
|
|
|
|
Loss before tax
|
(6,677)
|
|
(7,215)
|
|
|
|
|
Corporation tax at standard rate
22.0% (2022: 19.0%)
|
(1,469)
|
|
(1,371)
|
Fixed asset differences
|
-
|
|
527
|
Expenses not deductible
|
247
|
|
1,792
|
Income not taxable
|
-
|
|
(1,409)
|
Tax losses carried
forward
|
1,160
|
|
-
|
Movement in deferred tax not
recognised
|
62
|
|
529
|
Other movements
|
-
|
|
(69)
|
Total tax charge
|
-
|
|
-
|
|
|
|
|
10 Tax (continued)
No account has been taken of the
potential deferred tax asset of £14,628,000 (2022: £13,375,000)
calculated at 25% (2022: 25%) and representing losses carried
forward and short term timing differences, owing to the uncertainty
over the utilisation of the losses available.
11 Other
expenses
|
52 weeks
ended
1 October
2023
|
|
52 weeks
ended
2 October
2022
|
|
£ 000
|
|
£ 000
|
|
|
|
|
Depreciation and
amortisation
|
324
|
|
244
|
AGA release of provision (note
22)
|
1
|
|
-
|
Other central costs
|
3,147
|
|
2,596
|
|
3,472
|
|
2,840
|
12 Earnings per share
Basic loss per share is calculated
by dividing the profit attributable to equity shareholders by the
weighted average number of shares outstanding during the year.
There were no potentially dilutive ordinary shares outstanding as
at the periods ended 1 October 2023 and 2 October 2022.
|
|
|
|
|
1 October
2023
|
|
2 October
2022
|
|
|
|
|
|
£ 000
|
|
£ 000
|
|
|
|
|
|
|
|
|
Loss for the year after
tax
|
|
|
|
|
(6,677)
|
|
(7,215)
|
Basic and diluted weighted average
number of shares
|
|
82,143,398
|
|
82,143,398
|
Basic loss per share
(pence)
|
|
|
|
|
(8.1)
|
|
(8.8)
|
Diluted loss per share
(pence)
|
|
(8.1)
|
|
(8.8)
|
|
|
|
|
|
|
|
|
13 Intangible assets
Group
|
Brand
|
|
Goodwill
|
|
Trademarks, patents &
licenses
|
|
Total
|
|
£ 000
|
|
£ 000
|
|
£ 000
|
|
£ 000
|
|
|
|
|
|
|
|
|
Cost or valuation
|
|
|
|
|
|
|
|
At 2 October 2022
|
2,912
|
|
26,019
|
|
25
|
|
28,956
|
Additions
|
-
|
|
-
|
|
-
|
|
-
|
At 1 October 2023
|
2,912
|
|
26,019
|
|
25
|
|
28,956
|
|
|
|
|
|
|
|
|
Amortisation
|
|
|
|
|
|
|
|
At 2 October 2022
|
2,788
|
|
14,954
|
|
-
|
|
17,742
|
Charge for the period
|
62
|
|
-
|
|
-
|
|
62
|
Impairment
|
-
|
|
-
|
|
-
|
|
-
|
At 1 October 2023
|
2,850
|
|
14,954
|
|
-
|
|
17,804
|
|
|
|
|
|
|
|
|
Carrying amount 1 October 2023
|
62
|
|
11,065
|
|
25
|
|
11,152
|
|
|
|
|
|
|
|
|
|
Brand
|
|
Goodwill
|
|
Trademarks, patents &
licenses
|
|
Total
|
|
£ 000
|
|
£ 000
|
|
£ 000
|
|
£ 000
|
|
|
|
|
|
|
|
|
Cost or valuation
|
|
|
|
|
|
|
|
At 3 October 2021
|
2,912
|
|
26,019
|
|
25
|
|
28,956
|
Additions
|
-
|
|
-
|
|
-
|
|
-
|
At 2 October 2022
|
2,912
|
|
26,019
|
|
25
|
|
28,956
|
|
|
|
|
|
|
|
|
Amortisation
|
|
|
|
|
|
|
|
At 3 October 2021
|
2,724
|
|
13,391
|
|
-
|
|
16,115
|
Charge for the period
|
64
|
|
-
|
|
-
|
|
64
|
Impairment
|
-
|
|
1,563
|
|
-
|
|
1,563
|
At 2 October 2022
|
2,788
|
|
14,954
|
|
-
|
|
17,742
|
Carrying amount 2 October 2022
|
124
|
|
11,065
|
|
25
|
|
11,214
|
Brand relates to registered brand
names and is amortised over an estimated useful economic life of
four years.
Goodwill is not amortised, but an
impairment test is performed annually by comparing the carrying
amount of the goodwill to its recoverable amount. The recoverable
amount is represented by the greater of the individual Cash
Generating Units ("CGU's") fair value less costs of disposal and
its value-in-use.
The goodwill balance relates to
Tavolino Riverside (£1,046,000), Strada Southbank (£992,000), Rare
Bird Hotels at Sonning Limited (£2,418,000), and Rare Bird Hotels
at Streatley Limited (£6,609,000). Tavolino Riverside and Strada
Southbank are included within the restaurant operating segment.
Rare Bird Hotels at Sonning Limited and Rare Bird Hotels at
Streatley Limited are included within the hotels operating
segment.
Restaurant
segment
The key assumptions for the
value-in-use calculations are those regarding the discount rate,
trading forecasts and growth rates. The key underlying assumption
is the group's 3 year business plan which is based on past
experience, taking into account operational developments/ changes
at the group's operating sites. A pre-tax discount rate of 12.1%
was used (2022: 14.9%), based on the Group's WACC and comparable
businesses in the sector. Cash flows in line with forecasts for the
next 3 years were used. Cash flows beyond the forecast period are
extended out to the end of the lease terms at a 3% growth
rate.
Impairment testing at 1 October
2023 resulted in no impairments.
Given the ongoing global economic
uncertainty and its impact on the UK hospitality sector there is
particular sensitivity to the forecasts prepared in connection with
the impairment review as at 1 October 2023. The estimate of
recoverable amount for the restaurant segment is particularly
sensitive to the discount rate and trading forecast assumptions. If
the discount rate used is increased by 1%, the forecast future
EBITDA is reduced by 10% and the terminal growth rate reduced by
1%, a further impairment loss of £nil for the period ended 1
October 2023 would have to be recognised against goodwill (2022:
£991,000). Management is not currently aware of any other
reasonably possible changes to key assumptions that would cause a
unit's carrying amount to exceed its recoverable amount.
Hotel
segment
The key assumptions for the
value-in-use calculations are those regarding the discount rate,
trading forecasts and growth rates. A pre-tax discount rate of
12.1% was used (2022: 14.9%), based on the Group's WACC and
comparable businesses in the sector. Cash flows in line with
forecasts for the next 3 years were used. Cash flows beyond the
forecast period are extended at a terminal growth rate of 3% (2022:
2%).
Impairment testing at 1 October
2023 resulted in no requirement to reduce the carrying value of
goodwill at 1 October 2023, as the recoverable amounts of the CGUs,
based on value-in-use estimates, were greater than the carrying
values.
The estimate of recoverable amount
for the hotel segment is sensitive to the discount rate, trading
forecast assumptions and terminal growth rate. If the discount rate
used is increased by 1%, the forecast future EBITDA is reduced by
10% and the terminal growth rate reduced by 1%, no impairment would
be required (2022: nil). Management is not currently aware of any
other reasonably possible changes to key assumptions that would
cause a unit's carrying amount to exceed its recoverable
amount.
14 Property, plant and equipment
Group
|
Right of use
assets
|
|
Freehold
property
|
|
Leasehold
Improvements
|
|
Furniture, fittings and
equipment
|
|
Assets Under
Construction
|
|
IT
equipment
|
|
Total
|
|
£ 000
|
|
£ 000
|
|
£ 000
|
|
£ 000
|
|
£ 000
|
|
£ 000
|
|
£ 000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost or valuation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At 2 October 2022
|
37,588
|
|
2,294
|
|
16,293
|
|
8,535
|
|
573
|
|
2,108
|
|
67,391
|
Additions
|
1,206
|
|
-
|
|
654
|
|
935
|
|
5,191
|
|
65
|
|
8,051
|
Lease modifications
|
56
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
56
|
Disposals
|
(1,228)
|
|
-
|
|
-
|
|
-
|
|
(30)
|
|
-
|
|
(1,258)
|
Transfers
|
-
|
|
-
|
|
4,304
|
|
664
|
|
(5,137)
|
|
169
|
|
-
|
At 1 October 2023
|
37,622
|
|
2,294
|
|
21,251
|
|
10,134
|
|
597
|
|
2,342
|
|
74,240
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At 2 October 2022
|
11,479
|
|
-
|
|
2,489
|
|
4,440
|
|
-
|
|
1,282
|
|
19,690
|
Charge for the period
|
2,499
|
|
138
|
|
1,054
|
|
1,502
|
|
-
|
|
316
|
|
5,509
|
Eliminated on disposal
|
(1,229)
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
(1,229)
|
At 1 October 2023
|
12,749
|
|
138
|
|
3,543
|
|
5,942
|
|
-
|
|
1,598
|
|
23,970
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Carrying amount
At
1 October 2023
|
24,873
|
|
2,156
|
|
17,708
|
|
4,192
|
|
597
|
|
744
|
|
50,270
|
14
Property, plant and equipment (continued)
|
Right of use
assets
|
|
Freehold
property
|
|
Leasehold
Improvements
|
|
Furniture, fittings and
equipment
|
|
Assets Under
Construction
|
|
IT
equipment
|
|
Total
|
|
£ 000
|
|
£ 000
|
|
£ 000
|
|
£ 000
|
|
£ 000
|
|
£ 000
|
|
£ 000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost or valuation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At 3 October 2021
|
29,215
|
|
2,294
|
|
9,814
|
|
6,003
|
|
1,336
|
|
1,583
|
|
50,245
|
Additions
|
6,531
|
|
-
|
|
5,481
|
|
2,291
|
|
585
|
|
495
|
|
15,383
|
Lease modifications
|
2,127
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
2,127
|
Disposals
|
(285)
|
|
-
|
|
-
|
|
(3)
|
|
(74)
|
|
(2)
|
|
(364)
|
Transfers
|
-
|
|
-
|
|
998
|
|
244
|
|
(1,274)
|
|
32
|
|
-
|
At 2 October 2022
|
37,588
|
|
2,294
|
|
16,293
|
|
8,535
|
|
573
|
|
2,108
|
|
67,391
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At 3 October 2021
|
8,491
|
|
-
|
|
1,756
|
|
3,091
|
|
-
|
|
1,015
|
|
14,353
|
Charge for the period
|
2,286
|
|
-
|
|
733
|
|
1,351
|
|
-
|
|
268
|
|
4,638
|
Eliminated on disposal
|
(278)
|
|
-
|
|
-
|
|
(2)
|
|
-
|
|
(1)
|
|
(281)
|
Impairment loss
|
980
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
980
|
At 2 October 2022
|
11,479
|
|
-
|
|
2,489
|
|
4,440
|
|
-
|
|
1,282
|
|
19,690
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Carrying amount
2
October 2022
|
26,109
|
|
2,294
|
|
13,804
|
|
4,095
|
|
573
|
|
826
|
|
47,701
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Group's leasehold premises and
improvements are stated at cost, being the fair value at the date
of acquisition, plus any additions at cost less any subsequent
accumulated depreciation. Work in progress relates to capital
expenditure on sites that have not started trading.
Depreciation is charged to cost of
sales in the Statement of Comprehensive Income for property, plant
and equipment in use at the trading leasehold premises.
Depreciation on property, plant and equipment used by central
functions is charged to other expenses in the Statement of
Comprehensive Income.
Rental income from subletting
right-of-use assets is recognised on a straight-line basis over the
term of the relevant lease. It is netted off against rental costs
and is recognised within cost of sales (2023: £41,000, 2022:
£42,000).
The Group has determined that each
site in the restaurant operating segment, and each of the companies
in the hotel operating segment are separate CGUs for impairment
testing purposes. Each CGU is tested for impairment at the balance
sheet date if there exists at that date any indicators of
impairment. Losses incurred by the Group pre Covid-19 as well as
the ongoing Covid-19 pandemic are considered indicators of
potential impairment, accordingly all CGUs have been tested for
impairment by comparing the carrying amount of the assets to
recoverable amount. The recoverable amount is represented by the
greater of the individual CGU's fair value less costs of disposal
and its value-in-use.
Restaurant
segment
The key assumptions for the
value-in-use calculations are those regarding the discount rate,
trading forecasts and growth rates. A discount rate of 12.1% was
used (2022: 14.9%), based on the Group's WACC and comparable
businesses in the sector. Cash flows in line with forecasts over
the next 3 years were used. Cash flows beyond the forecast period
are extended out to the end of the lease terms at a 3% growth
rate.
Impairment testing resulted in no
impairments in the year. The CGU's with the least headroom are
Restaurant 1 with £23,000, Restaurant 2 with £432,000 and
Restaurant 3 with £461,000.
The estimate of recoverable amount
for the restaurant segment is particularly sensitive to the trading
forecast assumptions. If the discount rate used is increased by 1%,
the forecast EBITDA is reduced by 10%, and the terminal growth rate
reduced by 1%, an impairment loss of £650,000 for the period ended
1 October 2023 would have to be recognized against hyphenate right
of use assets. Management is not currently aware of any other
reasonably possible changes to key assumptions that would cause a
unit's carrying amount to exceed its recoverable amount.
Hotel
segment
As a result of the headroom
identified during the goodwill impairment testing of the hotel
operating segment (see note 13), no impairment charge is required
in respect of the hotel segment.
17 Trade and other receivables
|
Group
|
|
|
|
1 October
2023
|
|
2 October
2022
|
|
1 October
2023
|
2 October 2022 as
restated
|
|
£ 000
|
|
£ 000
|
|
£ 000
|
£ 000
|
|
|
|
|
|
|
|
Trade
receivables
|
154
|
|
204
|
|
-
|
-
|
Prepayments
|
946
|
|
907
|
|
-
|
-
|
Other receivables
|
1,136
|
|
1,452
|
|
-
|
-
|
|
2,236
|
|
2,563
|
|
-
|
-
|
All of the trade receivables were
non-interest bearing, receivable under normal commercial terms, and
the directors do not consider there to be any material expected
credit loss. The directors consider that the carrying value of
trade and other receivables approximates to their fair value. The
receivable from subsidiaries (£42,632,000) at 2 October 2022 has
been restated as a fixed asset, which better reflects management's
expectation of the timing of the recovery of the amount.
18 Cash and bank balances
|
Group
|
|
Company
|
|
1 October
2023
|
|
2 October
2022
|
|
1 October
2023
|
|
2 October
2022
|
|
£ 000
|
|
£ 000
|
|
£ 000
|
|
£ 000
|
Cash and bank balances
|
1,902
|
|
9,390
|
|
-
|
|
-
|
|
|
|
|
|
|
|
|
19 Trade and other payables
|
Group
|
|
Company
|
|
1 October
2023
|
|
2 October
2022
|
|
1 October
2023
|
|
2 October
2022
|
|
£ 000
|
|
£ 000
|
|
£ 000
|
|
£ 000
|
Trade payables
|
3,107
|
|
2,232
|
|
-
|
|
-
|
Payables to subsidiaries
|
-
|
|
-
|
|
2,795
|
|
1,863
|
Accrued expenses
|
4,205
|
|
3,805
|
|
-
|
|
-
|
Social security and other
taxes
|
1,400
|
|
1,363
|
|
-
|
|
-
|
Other payables
|
1,377
|
|
1,194
|
|
-
|
|
-
|
Lease liabilities due in less than
one year
|
3,291
|
|
2,826
|
|
-
|
|
-
|
|
13,380
|
|
11,420
|
|
2,795
|
|
1,863
|
20 Current
borrowings
|
Group
|
|
Company
|
|
1 October
2023
|
|
2 October
2022
|
|
1 October
2023
|
|
2 October
2022
|
|
£ 000
|
|
£ 000
|
|
£ 000
|
|
£ 000
|
Borrowings from related
parties
|
13,511
|
|
12,707
|
|
-
|
|
-
|
Borrowings from related parties
classed as payable within 12 months includes two deep discounted
bond instruments issued by VEL Property Holdings Limited and by
Various Eateries Trading Limited.
The deep discounted bond
instrument issued by VEL Property Holdings Limited was rolled in
January 2023 with a new redemption date of 14 July 2023. In July
2023 the deep discounted bond was rolled with a new redemption date
of 14 January 2024. The nominal value at year end is £2,902,000
(2022: £2,791,000). The discount is recognised between subscription
and redemption date, resulting in £51,000 of accrued financing
costs as at the reporting date.
20 Current borrowings
(continued)
The deep discounted bond
instrument issued by Various Eateries Trading Limited was rolled
for 12 months in February 2023 with a redemption date of April
2024. The nominal value at year end is £10,001,000 (2022:
£10,001,000). The discount is recognised between subscription and
redemption date resulting in £368,000 of accrued financing costs at
the reporting date. The balance of £608,000 (2022: £608,000) under
the August 2019 loan agreement matures in April 2024, and bears
cash settled interest at 3.75% above SONIA (2022: cash settled
interest at 3.75% above SONIA).
21 Non-current
borrowings
|
Group
|
|
Company
|
|
1 October
2023
|
|
2 October
2022
|
|
1 October
2023
|
|
2 October
2022
|
|
£ 000
|
|
£ 000
|
|
£ 000
|
|
£ 000
|
Lease liabilities due after more
than one year
|
28,049
|
|
29,244
|
|
-
|
|
-
|
|
|
|
|
|
|
|
|
The loans and borrowings
classified as financial instruments are disclosed in note
25.
The Group's exposure to market and
liquidity risk in respect of loans and borrowings is disclosed in
the financial instruments note.
22 Provisions for
liabilities
Group
|
|
|
52 weeks
ended
1 October
2023
|
Authorised Guarantee Agreements ('AGAs')
|
|
|
£ 000
|
At start and end of previous
financial period
|
|
|
357
|
At start of financial
period
|
357
|
Charge in the year
|
1
|
At end of financial
period
|
358
|
The provision relates to the annual
rental cost of three (2022: three) previously operated sites that
have been disposed of via assignment of lease and include
Authorised Guarantee Agreements ('AGAs') as part of the assignment
arrangement (see also note 30).
23 Share capital and share premium
Authorised, allotted, called-up and fully paid
shares
|
|
|
|
|
|
|
|
1 October
2023
|
|
2 October
2022
|
|
No.
000
|
|
£ 000
|
|
No.
000
|
|
£ 000
|
Ordinary shares of £0.01
each
|
89,008
|
|
890
|
|
89,008
|
|
890
|
There were no movements in
ordinary share capital in the period ended 1 October
2023
Ordinary
shares
Ordinary shares entitle the holder
to participate in dividends and the proceeds on the winding up of
the Company in proportion to the number of and amounts paid on the
shares held. The fully paid ordinary shares have a par value of
£0.01 and the company does not have a limited amount of authorised
capital.
Employee benefit trust
shares reserve
The Group presents these shares as
an adjustment to own equity at the period end date through the
employee benefit trust shares reserve, until the point that the
shares are awarded, and cease to be conditional awards of shares.
The award of shares is conditional upon certain vesting criteria,
as outlined in note 26.
25 Financial instruments
Group
|
|
|
|
|
|
Financial assets at amortised
cost
|
|
|
|
|
|
1 October
2023
|
|
2 October
2022
|
|
|
|
£ 000
|
|
£ 000
|
Cash at bank and in hand
|
|
|
1,902
|
|
9,390
|
Trade and other
receivables
|
|
|
1,290
|
|
1,656
|
|
|
|
3,192
|
|
11,046
|
Reconciliation of liabilities
arising from financing activities
|
Lease
Liabilities
|
|
Other
Borrowings
|
|
Total
|
|
£
000
|
|
£
000
|
|
£
000
|
At start of financial
period
|
32,070
|
|
12,707
|
|
44,777
|
New
Borrowings/(disposals)
|
(425)
|
|
-
|
|
(425)
|
DDB renewal
|
-
|
|
-
|
|
-
|
Interest charge
|
1,573
|
|
804
|
|
2,377
|
Repayments during the
period
|
(1,878)
|
|
-
|
|
(1,878)
|
At
end of financial period
|
31,340
|
|
13,511
|
|
44,851
|
Valuation methods and
assumptions
Trade receivables are all due for
settlement in less than one year. The Directors consider that the
carrying amount of trade and other receivables is approximately
equal to their fair value due to their short term
nature.
Financial liabilities at amortised cost
|
|
|
|
|
|
|
|
|
1 October
2023
|
|
2 October
2022
|
|
|
|
£ 000
|
|
£ 000
|
Trade and other payables
|
|
|
40,029
|
|
39,190
|
Borrowings from related
parties
|
|
|
13,511
|
|
12,707
|
|
|
|
53,540
|
|
51,897
|
Valuation methods and
assumptions
The Directors consider that the
carrying amount of trade and other payables is approximately equal
to their fair value due to their short-term nature. The fair value
of financial liabilities is estimated by discounting the remaining
contractual maturities at the current market interest rate that is
available for similar financial liabilities.
Fair value hierarchy
The tables above detail the Group's
assets and liabilities disclosed at fair value. Using a three-level
hierarchy, based on the lowest level of input that is significant
to the entire fair value measurement, all assets and liabilities
shown above are considered to be level 3: 'Unobservable inputs for
the asset or liability'. There were no transfers between levels
during the financial period.
Financial risk management and impairment of financial
assets
The Group's activities expose it to
a variety of financial instrument risks. The risk management
policies employed by the Group to manage these risks are discussed
below. The primary objectives of the financial instrument risk
management function are to establish risk limits, and then ensure
that exposure to risks stay within these limits.
Capital risk management
The Group's objectives when
managing capital is to safeguard its ability to continue as a going
concern, so that it can provide returns for shareholders and
benefits for other stakeholders and to maintain an optimum capital
structure to reduce the cost of capital.
Capital is regarded as total
equity, as recognised in the statement of financial position, plus
net debt. Net debt is calculated as total borrowings less cash and
cash equivalents.
In order to maintain or adjust the
capital structure, the Company may adjust the amount of dividends
paid to shareholders, return capital to shareholders, issue new
shares or sell assets to reduce debt.
The Company is subject to certain
financing arrangements covenants and meeting these is given
priority in all capital risk management decisions. There have been
no events of default on the financing arrangements during the
financial period.
Credit risk management
The Group's credit risk is
attributable to trade and other receivables and cash with the
carrying amount best representing the maximum exposure to credit
risk. The Group places its cash with banks with high quality credit
standings. Trade and other receivables relate to day-to-day
activities which are entered into with creditworthy
counterparties.
Market risk management
The Group's activities expose it
economic factors, the Directors closely monitor market conditions
and consider any impact on the Group's
existing strategy.
Interest rate risk management
The Group is exposed to interest
rate risk as the Group's borrowings have an interest rate of
3.75% above SONIA.
Liquidity risk management
Liquidity risk arises from the
Group's management of working capital and the finance charges and
principal repayments on its debt instruments. It is the risk
that the Group will encounter difficulty in meeting its financial
obligations as they fall due.
Management review cashflow
forecasts on a regular basis to determine whether the Group has
sufficient cash reserves to meet future
working capital requirements and to take advantage of business
opportunities.
Remaining contractual
maturities
The following tables detail the
company's remaining contractual maturity for its financial
instrument liabilities. The tables have been drawn up based on the
undiscounted cash flows of financial liabilities based on the
earliest date on which the financial liabilities are required to be
paid. The tables include both interest and principal cash flows
disclosed as remaining contractual maturities and therefore these
totals may differ from their carrying amount in the statement of
financial position.
25
Financial instruments (continued)
|
Weighted average interest
rate
|
|
1 year or
less
|
|
Between 1 and 2
years
|
|
Between 2 and 5
years
|
|
Over 5
years
|
|
Remaining contractual
maturities
|
2023
|
%
|
|
£ 000
|
|
£ 000
|
|
£ 000
|
|
£ 000
|
|
£ 000
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-derivatives
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade payables
|
-
|
|
3,107
|
|
-
|
|
-
|
|
-
|
|
3,107
|
Other payables
|
-
|
|
5,582
|
|
-
|
|
-
|
|
-
|
|
5,582
|
Borrowings - Deep Discount
Bond
|
-
|
|
12,903
|
|
-
|
|
-
|
|
-
|
|
12,903
|
Borrowings - loan
|
3.75% + SONIA
|
|
608
|
|
-
|
|
-
|
|
-
|
|
608
|
Lease liability
|
4.5%
|
|
3,291
|
|
3,718
|
|
3,733
|
|
20,598
|
|
31,340
|
|
|
|
25,491
|
|
3,718
|
|
3,733
|
|
20,598
|
|
53,540
|
|
Weighted average Interest
rate
|
|
1 year or
less
|
|
Between 1 and 2
years
|
|
Between 2 and 5
years
|
|
Over 5
years
|
|
Remaining contractual
maturities
|
2022
|
%
|
|
£ 000
|
|
£ 000
|
|
£ 000
|
|
£ 000
|
|
£ 000
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-derivatives
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade payables
|
-
|
|
2,232
|
|
-
|
|
-
|
|
-
|
|
2,232
|
Other payables
|
-
|
|
4,999
|
|
-
|
|
-
|
|
-
|
|
4,999
|
Borrowings - Deep Discount
Bond
|
-
|
|
12,792
|
|
-
|
|
-
|
|
-
|
|
12,792
|
Borrowings - loan
|
3.75% + SONIA
|
|
608
|
|
-
|
|
-
|
|
-
|
|
608
|
Lease liability
|
4.5%
|
|
3,157
|
|
3,669
|
|
11,178
|
|
26,451
|
|
44,455
|
|
|
|
23,788
|
|
3,669
|
|
11,178
|
|
26,451
|
|
65,086
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The cash flows in the maturity
analysis above are not expected to occur significantly earlier than
contractually disclosed above.
26 Share based payments
As at 1 October 2023, the Group
maintained three separate share based payment scheme for employee
remuneration (2022: three):
· Various Eateries Joint Share Ownership Scheme ("JSOP Scheme
1")
· Various Eateries Joint Share Ownership Scheme ("JSOP Scheme
2")
· Various Eateries Company Share Option Plan
("CSOP")
JSOP Scheme 1
In accordance with IFRS 2
"Share-based Payment", the value of the awards is measured at fair
value at the date of the grant. The fair value is expensed on a
straight-line basis over the vesting period, based on management's
estimate of the number of shares that will eventually vest. A
charge of £nil (2022: £713,000) has been recognised in the
consolidated income statement by the Group in the period ended 1
October 2023.
The JSOP is part of the
remuneration package of the Group's senior management. Participants
in this scheme have to be employed until the end of the agreed
vesting period. Upon vesting, the holder is entitled to purchase
ordinary shares at the market price determined at grant
date.
|
JSOP (Scheme
1)
|
|
Number of
shares
|
|
Granted
|
|
Exercisable
|
|
Total
|
|
|
|
|
|
|
At 2 October 2022
|
-
|
|
5,809,523
|
|
5,809,523
|
Lapsed 11 November 2022
|
-
|
|
(1,095,238)
|
|
(1,095,238)
|
Lapsed 8 September 2023
|
-
|
|
(2,190,476)
|
|
(2,190,476)
|
At 2 October 2022
|
-
|
|
2,523,809
|
|
2,523,809
|
|
|
|
|
|
|
|
|
|
|
|
|
At 3 October 2021
|
5,809,523
|
|
-
|
|
5,809,523
|
Granted
|
-
|
|
-
|
|
-
|
Vesting
|
(5,809,523)
|
|
5,809,523
|
|
-
|
At 2 October 2022
|
-
|
|
5,809,523
|
|
5,809,523
|
26 Share based payments (continued)
The fair value of these options
granted was determined using a Black-Scholes model. The following
principal assumptions were used in the valuation:
|
|
|
|
|
|
|
|
JSOP
|
Grant date
|
|
|
18
September 2020
|
Vesting period ends
|
|
|
31
August 2022
|
Share price at date of
grant
|
|
|
£0.73
|
Volatility
|
|
|
66.98%
|
Option life
|
|
|
1.95
years
|
Dividend yield
|
|
|
0.00%
|
Risk-free investment rate
|
|
|
(0.13)
%
|
Fair value per option at grant
date
|
|
|
£0.26
|
Exercise price at date of
grant
|
|
|
£0.73
|
Exercisable from / to
|
|
|
31
August 2022/31 August 2030
|
Remaining contractual
life
|
|
|
nil
|
The historical volatility has been
calculated based on the share returns of four comparators for a
period preceding the valuation date equal to the initial expected
term of the options, i.e. a period of 1.95 years. The total
estimated fair value of the options granted on 18 September 2020
that was recognised as an expense expenses over the vesting period
is £1,531,000.
JSOP Scheme 2
A charge of £nil (2022: £35,000)
has been recognised in the consolidated income statement by the
Group in the period ended 1 October 2023.
The JSOP is part of the
remuneration package of the Group's senior management. Participants
in this scheme have to be employed until the end of the agreed
vesting period. Upon vesting, the holder is entitled to purchase
ordinary shares at the market price determined at grant
date.
|
JSOP (Scheme
2)
|
|
Number of shares
|
|
Exercise price per share
(£)
|
|
|
|
|
At 1 October 2023
|
-
|
|
-
|
|
|
|
|
At 3 October 2021
|
360,000
|
|
1.09
|
Lapsed 29 June 2022
|
(360,000)
|
|
1.09
|
At 2 October 2022
|
-
|
|
-
|
|
|
|
|
Grant date
|
|
|
11 May
2021
|
Vesting period ends
|
|
|
Various
|
Share price at date of
grant
|
|
|
£1.03
|
Volatility
|
|
|
64.17%
|
Option life
|
|
|
3.89
|
Dividend yield
|
|
|
0.00%
|
Risk-free investment rate
|
|
|
0.24%
|
Exercise price at date of
grant
|
|
|
£1.09
|
Exercisable from / to
|
|
|
31 March
2025 / 31 March 2026
|
Remaining contractual
life
|
|
|
1.50
years
|
26 Share based payments (continued)
|
|
|
|
|
|
|
|
|
|
|
The historical volatility has been
calculated based on the share returns of four comparators for a
period preceding the valuation date equal to the initial expected
term of the options, i.e. a period of 3.89 years. The total
estimated fair value of the options granted on 11 May 2021 to be
recognised in expenses over the vesting period was £193,000. All
options under the scheme as at 1 October 2023 have
lapsed.
CSOP
A charge of £69,000 (2022:
£82,000) has been recognised in the consolidated income statement
by the Group in the period ended 1 October 2023.
|
CSOP
|
|
|
Number of
shares
|
|
Exercise price per share
(£)
|
|
|
|
|
At 2 October 2022
|
1,240,441
|
|
various
|
Granted 15 November
2022
|
250,000
|
|
0.35
|
Granted 4 April 2023
|
642,857
|
|
0.28
|
Granted 17 July
2023
|
393,442
|
|
0.31
|
Lapsed 11th November
2022
|
(104,167)
|
|
1.09
|
Lapsed 3 October 2022
|
(136,887)
|
|
1.09
|
Lapsed 30th April
2023
|
(250,000)
|
|
1.09
|
Lapsed 31 July 2023
|
(91,258)
|
|
1.09
|
At 1 October 2023
|
1,944,428
|
|
various
|
|
|
|
|
At 3 October 2021
|
92,402
|
|
1.09
|
Granted 17 January 2022
|
990,441
|
|
0.69
|
Lapsed 11 May 2022
|
(92,402)
|
|
1.09
|
Granted 25 August
2022
|
250,000
|
|
0.42
|
At 2 October 2022
|
1,240,441
|
|
various
|
|
|
|
|
|
|
The fair value of the options is
estimated at the date of grant using a Black-Scholes valuation
method. The total estimated fair value of the options granted
during the year to be recognised over the vesting period is
£167,000.
|
|
CSOP
|
CSOP
|
CSOP
|
CSOP
|
CSOP
|
CSOP
|
|
Grant date
|
|
11 May
2021
|
17 January
2022
|
25 August
2022
|
15 November
2022
|
4 April
2023
|
17 July
2023
|
|
Vesting period ends
|
|
11 May
2024
|
17
January 2025
|
25
August 2025
|
15
November 2025
|
4 April
2026
|
17 July
2026
|
|
Share price at date of
grant
|
|
£1.08
|
£0.69
|
£0.42
|
£0.35
|
£0.28
|
£0.31
|
|
Volatility
|
|
65.66%
|
65.66%
|
65.66%
|
65.66%
|
65.66%
|
65.66%
|
|
Option life at grant
|
|
3
years
|
3
years
|
3
years
|
3
years
|
3
years
|
3
years
|
|
Dividend yield
|
|
0.00%
|
0.00%
|
0.00%
|
0.00%
|
0.00%
|
0.00%
|
|
Risk-free investment rate
|
|
0.87
%
|
0.87
%
|
0.87
%
|
0.87
%
|
0.87
%
|
0.87
%
|
|
Fair value per option at grant
date
|
|
£0.49
|
£0.30
|
£0.19
|
£0.15
|
£0.12
|
£0.13
|
|
Exercise price at date of
grant
|
|
£1.08
|
£0.69
|
£0.42
|
£0.35
|
£0.28
|
£0.31
|
|
Exercisable from / to
|
|
11 May
2024/11 May 2031
|
17
January 2025/17 January 2032
|
25
August 2025/25 August 2032
|
15
November 2025/15 November 2032
|
4 April
2026/4 April 2033
|
17 July
2026/17 July 2033
|
|
Remaining contractual
life
|
|
0.6
years
|
1.3
years
|
1.9
years
|
2.1
years
|
2.5
years
|
2.8
years
|
|
|
|
|
|
|
|
|
|
|
|
29 Post balance sheet
events
Various Eateries Trading Limited funding
In December 2023, the business
issued 86,036,788 shares at £0.25 each raising a total of
£21,509,197. Of the total amount raised, £11,409,197 is used to
convert the deep discounted bond debt in Various Eateries Trading
Limited to Equity (see note 20). The remaining £10,100,000 is paid
in cash. The net cash inflow after transaction fees is
£9,707,000.
Deep discount bond
In January 2024 the deep
discounted bond was rolled with a new redemption date of 14 July
2024 and a nominal value of £3,139,189.
Share options
Following the equity raise, the
existing share options were revised. All JSOP options of 2,523,809
and 654,167 of the CSOP scheme were surrendered.
New options totalling 13,483,180
under the CSOP scheme were issued and will vest over a three-year
period to January 2027. One third were issued at 27.5 pence, a 10%
premium to the equity raise price of 25 pence. The second third
were at a 10% premium to the first issue at 30.25 pence and the
last third at 33.275 pence.
30 Contingent liabilities
Authorised Guarantee Agreements
There are 10 (2022: 9) previously
operated sites that have been disposed of via assignment of lease
and include Authorised Guarantee Agreements ('AGAs') as part of the
assignment arrangement. There is a risk that the sites would be
returned if the assigned leaseholders were to default on their
contractual obligations with their respective landlords, the risk
of which was heightened as a result of the coronavirus (Covid-19)
outbreak. The total annual rental cost for these sites is £758,000,
of which £358,000 (2022: £357,000) has been provided for (see note
23). The average remaining lease length is 6 years.
CJRS claim
The Group made material claims
under the CJRS schemes in order to support the business through the
pandemic. Given multiple changes to the rules governing the
schemes, as well as the degree of complexity in the various rules,
the Group undertook an external review of past claims to confirm
their validity. The directors are of the opinion that claims made
to date are valid and materially correct and so do not consider the
likelihood of material outflow as a result of this review to be
probable.