Interim Results
Signature Restaurants PLC
28 March 2002
28th March 2002
Signature Restaurants PLC
Interim Results for the 26 weeks ended 30 December 2001
Signature Restaurants PLC announces its interim results for the 26 weeks ended
30 December 2001.
Main points
• Group turnover of £19.92m (2000: £19.88m)
• Profit before tax, goodwill amortisation and impairment provisions of
£1.5m (2000: £2.2m)
• Difficult trading conditions throughout the period particularly in central
London
• Disposal of certain under-performing sites
• Strada opened in Clapham and Earls Court and one under construction in the
Oxford street area of London
• No dividend
• Change in accounting policy due to release of FRS 19 - Deferred Taxation
accounting
Andy Bassadone, Chief Executive, commented:
'Trading in the restaurant sector was particularly difficult in central London
where the majority of the Group's restaurants are located. The Board has taken
decisive action and has disposed of a number of under-performing outlets. We
continue to make efforts to contain costs and restore growth in the existing
estate whilst also taking a cautious approach to the expansion of the Strada
division.'
For further information please contact:
Signature Restaurants PLC Tel: 020 7557 6333
Andy Bassadone, Chief Executive
Nick Fiddler, Finance Director
Citigate Dewe Rogerson Tel: 020 7638 9571
Simon Rigby
Anthony Kennaway
Chairman's Statement
26 Weeks ended 30 December 2001
In the 26 weeks ended 30 December 2001 overall Group turnover remained
relatively static at £19.92m (2000 - £19.88m). Profit before taxation and
goodwill amortisation was £1.50m compared to £992,000 in the same period in the
previous year. However, the comparative period was affected by an impairment
provision of £1.28m in respect of the now discontinued joint venture in New
York. Operating profit from continuing activities was £1.22m compared to £1.95m
in the same period in the previous year.
Basic earnings per share excluding goodwill amortisation and impairment
provision were 2.45p (2000 - 3.4p). In light of the difficult trading conditions
the Board is not proposing to pay an interim dividend. Rather, it intends to
re-invest cash into developing the Group together with reducing the existing net
debt which was some £3.8m as at 30 December 2001.
In accordance with the release of accounting standard FRS 19 -'Deferred
Taxation', the Group now makes full provision for timing differences between the
treatment of certain items for taxation and accounting purposes. This change has
given rise to a prior year adjustment (see note 4).
On 5 November 2001 the Group obtained shareholder approval to change the name of
the group to Signature Restaurants PLC and to perform a share consolidation on
the basis of 1 new share for every 20 existing shares held.
Review of Operations
Trading during the period was difficult. Following the September 11th disaster
in New York, visitor numbers to London fell sharply and this affected many of
our restaurants, most of which are in central London. This was on top of what
was already difficult trading conditions because of a reduction in overseas
tourists as a result of the adverse publicity surrounding the UK's foot and
mouth outbreak.
The Belgo Bierodrome division, which is in the mid-priced market, has suffered
the greatest with like for like sales for the six months being down by 18%.
However the trend has improved in recent months with the last two months like
for like sales being 10% down.
The Group's division of high quality independent restaurants had mixed fortunes.
Although The Ivy, J Sheekey and Le Caprice continued to trade satisfactorily,
some of the other standalone units were affected by the difficult trading
conditions. This resulted in the overall like for like sales for this division
being some 3% down.
The Group's Strada brand performed well with like for like sales increase of 4%,
although the overall profit contribution remained relatively modest due to the
size of the sites and the relatively low average spend compared to other
restaurants within the Group. Strada now has eight units, with Strada Clapham
and Strada Earls Court being opened since the period end. We remain focused on
expanding this division with a cautious approach to site selection. We plan to
open at least two more outlets in the next six months.
In the year ended 1 July 2001, the Group made impairment provisions against
certain under-performing assets to better reflect their value. During the period
under review the Group disposed of its under-performing Bierodrome site in
Clerkenwell. Since the period end the Board has continued its review of
under-performing units and has exchanged contracts for the disposal of one of
the Belgo sites, a Bierodrome site together with the standalone restaurant The
Collection. The Board expects these disposals to be completed in the forthcoming
weeks. The Board does not envisage that these disposals will give rise to any
further write-offs in the full year results.
Prospects
Trading since the period end has stabilised to a certain extent with less
dramatic down turn in like for like sales performance. However, conditions in
the London restaurant market remain highly competitive and we do not anticipate
a rapid recovery across the industry in central London during 2002. The Board
continues to focus on containing costs and restore growth from existing outlets
whilst also taking a cautious approach towards the expansion of Strada.
Luke Johnson 28th March 2002
Chairman
Consolidated Profit And Loss Account
26 weeks 26 weeks
ended ended
30 December 31 December
2001 2000
Notes (unaudited) (unaudited)
£'000 as restated
£'000
Turnover 1
Continuing 19,925 20,268
Less share of joint ventures (-) (387)
______ ______
Group turnover 19,925 19,881
Cost of sales (5,615) (5,634)
______ ______
Gross profit 14,310 14,247
Administrative expenses (including goodwill) (13,094) (12,293)
______ ______
Group operating profit
Continuing 1,216 1,954
Discontinued - share of joint venture profit/(loss) 3 52 (1,384)
including impairment provision
______ ______
1,268 570
Net interest (paid)/received (133) 78
Share of joint venture interest payable (-) (93)
______ ______
Profit on ordinary activities before taxation 1,135 555
Taxation 5 (495) (535)
______ ______
Profit on ordinary activities after taxation 640 20
Dividends - equity 6 - -
______ ______
Profit for the period 640 20
______ ______
Earnings per ordinary share - basic 7 1.556p 0.039p
- diluted 7 1.553p 0.038p
Earnings per ordinary share excluding JV impairment and
goodwill amortisation
- basic 7 2.449p 3.39p
- diluted 7 2.444p 3.14p
Consolidated Balance Sheet
At December 2001 At December 2000
(unaudited) (unaudited)
£'000 £'000
Fixed Assets
Intangible assets 2 12,059 12,793
Tangible assets 15,877 18,699
Investments 63 63
Joint ventures
Share of gross assets 3 - 299
Share of gross liabilities 3 - (444)
______ ______
27,999 31,362
Current Assets
Stock 1,256 1,273
Debtors 1,412 1,713
Cash at bank and in hand 4,500 2,467
______ ______
7,168 5,453
Creditors: amounts falling due within one year (13,341) (13,052)
______ ______
Net current liabilities (6,173) (7,599)
______ ______
Total assets less current liabilities 21,826 23,763
Creditors: falling due after more than one year (1,500) (2,250)
Provision for liabilities and charges (556) (637)
______ ______
Net assets 19,770 20,876
______ ______
Capital and Reserves
Called up share capital 8,226 8,226
Reserves 11,544 12,650
______ ______
Equity shareholders' funds 19,770 20,876
______ ______
Consolidated cash flow statement
26 weeks ended 26 weeks ended
30 December 2001 31 December 2000
(unaudited) (unaudited)
£'000 £'000
Net cash inflow from operating activities 2,098 3,961
Returns on investment and servicing of finance
Interest (paid)/received (133) 78
______ ______
(133) 78
Taxation
UK Corporation tax (1,073) (699)
Capital expenditure and financial investment
Purchase of tangible fixed assets (767) (2,940)
Disposal proceeds on sales of fixed assets 80 -
______ ______
(687) (2,940)
Equity dividends paid (-) (205)
______ ______
Cash inflow before management of liquid resources and 205 195
financing
- -
Financing
Redemption of ordinary share capital and associated costs - (5,919)
Issue of ordinary share capital - 21
Loans to Joint Ventures - (1,920)
Debt due within one year
- repayment of loans (375) -
- increase in short term bank loans - 750
Debt due beyond one year
- increase in long term bank loans - 2,250
Repayment of finance leases (8) (8)
______ ______
Net cash outflow from financing (383) (4,826)
______ ______
Decrease in cash in the period (178) (4,631)
Notes forming part of the financial statements
1. Group turnover arises substantially in the United Kingdom. Turnover, results
and net assets derive from the Group's ongoing principal activity of
operating restaurants.
2. Results are consolidated from the date of acquisition of subsidiary
undertakings. In accordance with FRS 10, goodwill arising on the difference
between the fair value of the consideration paid and the fair value of the
net assets acquired is capitalised and amortised over 20 years being the
estimated useful economic life.
3. In accordance with FRS 9 joint ventures are accounted for using the gross
equity method. Joint ventures previously stated at cost, have been accounted
for in accordance with FRS 9, and goodwill arising thereon has been charged
against reserves.
In the six months to 31 December 2000 the Group's share of the joint
venture's result included an impairment provision of £1,279,000 to reflect
the expected net realisable value of the joint venture's fixed assets.
4. In accordance with the release of the accounting standard FRS 19 'Deferred
Taxation', the Group now makes full provision for timing differences between
the treatment of certain items for taxation and accounting purposes. The
adoption of FRS 19 represents a change in accounting policy. Prior to the
release of the new accounting pronouncement the Group accounted for deferred
taxation in accordance with SSAP 15 and provided for timing differences to
the extent that it could be reasonably foreseen that such deferred taxation
would become payable. The impact on the Group's retained profit in the
period ended 30 December 2001 was a charge of £271,000 (six months to 31
December 2000 - charge of £203,000). In addition reserves brought forward in
the period ended 31 December 2000 were adjusted with a charge of £434,000.
5. The tax charge for the six months ended 30 December 2001 has been calculated
based on the estimated effective tax rate for the full year. The tax charge
is further analysed as follows:
26 weeks ended 26 weeks ended
30 December 31 December 2000
2001
£'000
£'000
Corporation Tax 224 332
Deferred Taxation 271 203
_____ _____
494 535
_____ _____
6. The directors do not propose to pay an interim dividend (2000 - Nil).
7. The calculation of earnings per share is based on the weighted average number
of issued ordinary shares during the period of 41,132,061 (2000 -
50,668,335) and earnings of £640,000 being the result after taxation (2000 -
£20,000).
Diluted earnings per share includes 89,707 (2000 - 2,471,911) shares in
respect of options and warrants, giving a total number of shares of
41,221,767 (2000 - 53,140,246). Earnings per share excluding goodwill
amortisation and impairment provisions of £367,500 (2000 - £367,500) and
£nil (2000 - £1,279,000) respectively is based on adjusted earnings of
£1,007,500 (2000 - £1,666,500).
8. Reconciliation of operating profit to net cash inflow from operating
activities
26 weeks ended 26 weeks ended
30 December 31 December 2000
2001
£'000
£'000
Operating profit 1,216 1,954
Depreciation charge 822 732
Amortisation of goodwill 367 367
Decrease /(Increase) in stock 30 (221)
Decrease in debtors 566 848
(Decrease) / Increase in creditors (903) 281
_____ ______
Net cash inflow from operating activities 2,098 3,961
______ ______
9. Reconciliation of net cash inflow to movement in net (debt)/funds
26 weeks ended 30 26 weeks ended 31
December 2001 December 2000
£'000 £'000
Decrease in cash in the period (178) (4,631)
Cash (inflow)/outflow from movement in debt and lease 383 (2,992)
financing
_____ _____
Movement in net (debt) / funds in the period 205 (7,623)
Opening net (debt) / funds (3,973) 2,556
_____ _____
Closing net debt (3,768) (5,057)
______ ______
10. Analysis of net debt
As at 1 July Cash Flow Non-cash Movement As at 30 December
2001 2001
£'000 £'000 £'000 £'000
Cash at bank and in hand - - - -
Cash deposits 4,500 - - 4,500
______ ______ ______ ______
4,500 - - 4,500
Overdrafts (1,336) (178) - (1,514)
______ ______ ______ ______
3,164 (178) - 2,986
Debt due within 1 year (5,250) 375 (375) (5,250)
Debt due after 1 year (1,875) - 375 (1,500)
Finance leases (12) 8 - (4)
______ _____ ______ ______
Total (3,973) (205) - (3,768)
______ ______ ______ ______
11. These interim results are unaudited and unreviewed and have been prepared
utilising the accounting policies adopted by the Group in the audited
accounts for the period ended 1 July 2001 except for the adoption of FRS 19
'Deferred Taxation' (see note 4). The statutory accounts for the period
ended 2 July 2001 have been delivered to the Registrar of Companies and were
unqualified and did not contain a statement under section 237 (2) or 237 (3)
of the Companies Act 1985.
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