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Tasty PLC (TAST)

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Tuesday 12 September, 2017

Tasty PLC

Half-year Report

RNS Number : 4318Q
Tasty PLC
12 September 2017
 

Tasty plc

("Tasty" or the "Group")

 

Interim Results (unaudited) for the 26 weeks ended 2 July 2017

Highlights:

 

·     Revenue up 11.8% to £24.4m on the comparative period (H1 2016 - £21.8m)

·     Successfully opened 4 new sites in the period and now operating sixty-five restaurants

 

Chairman's statement

 

Introduction
The Group is currently trading from sixty-five restaurants after successfully opening 4 new sites in the 26 week period to 2 July 2017.   

 

The Board believes that the sector as a whole has been suffering due to a slowdown in consumer spending since the beginning of 2017 and this is set to continue into 2018.  This is not unique to the Group or any particular area but appears to be a nationwide problem particularly evident in London and has impacted turnover and profit.

 

Business review

As a result of the weak trading environment the Group is facing pressure on sales and margins.  The Group is taking decisive action to improve its position;

 

Site disposals
A number of sites have been identified as underperforming and turnaround measures have been implemented which are producing encouraging results.  We are currently in the process of disposing of some sites and are marketing others which have not shown significant signs of improvement.

 

Food offering
We have carried out a major review of our menus taking into account customer feedback to ensure, the offering remains current and in line with our customers' tastes and we are in the best position to maintain and increase our market share.  We have reduced the number of dishes on the menu, along with improving the recipes of over a third of the items.
 

Promotions and pricing
The Board has noted that the level of promotional activity in the sector has increased significantly in 2017.  The Group continues to match the activity of the competition with regard to promotions and is reviewing alternative strategies.

 

Cost base
The pace of the roll out has been scaled back in the current climate and The Group will be reviewing its functions to ensure cost savings.

 

 

 

Results

Sales increased by 11.8% on the corresponding period to £24,375,000 (2016 - £21,794,000) with like for like sales declining.  Headline operating profit, before pre-opening costs, non-trade items and interest, was £544,000 (2016 - £1,925,000) and pre-tax profit before pre-opening costs and non-trade items decreased to £210,000 (2016 - £1,615,000). 

 

The Group has undertaken a comprehensive review of its estate during the period and has recognised an impairment charge of £9,492,000 in light of current trading conditions.   After taking into account all non-trade adjustments the Group has a stated loss after tax for the period of £9,302,000 (2016 - loss £2,637,000).

 

Cash flows and financing

During the period capital expenditure of £4,414,000 (2016 - £5,044,000) was incurred.  Four sites have been opened in the period, with a further two sites due to open imminently and no further sites planned for 2017.  The Board has reviewed its property pipeline and is currently not committed to opening any sites in 2018.

 

Overall, the net cash outflow for the period was £3,425,000 (2016 - inflow £334,000).   As at 2 July 2017, the Group had net borrowings of £5,421,000 (2016 - £7,445,000).  The Group has an available banking facility of £12,000,000 and it is the Board's intention to reduce net debt by the year end. 

 

Outlook

The Group recognises the challenging conditions ahead and is taking action to strengthen its position.    The Directors are confident that the Group's restaurants remain appealing to customers and the Group will continue its growth in the future. 

 

 

K Lassman

Chairman

Tasty plc


12 September 2017

 

This announcement contains inside information.

 

Enquiries:

 

Tasty plc                                                               Tel: 020 7637 1166

 

Jonny Plant, Chief Executive

 

Cenkos Securities                                               Tel: 020 7397 8900

 

Bobbie Hilliam

 

 

Consolidated statement of comprehensive income
for the 26 weeks ended 2 July 2017 (unaudited)

  

 

 

26 weeks to

 

27 weeks to

 

53 weeks to

 

 

 

 

 

2 July

 

3 July

 

1 January

 

 

 

 

 

2017

 

2016

 

2017

 

 

 

 

 

£'000

 

£'000

 

£'000

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

24,375

 

21,794

 

45,847

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of sales

 

(23,482)

 

(19,542)

 

(40,570)

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross profit

 

893

 

2,252

 

5,277

 

 

 

 

 

 

 

 

 

 

 

 

 

Administrative costs

 

(349)

 

(327)

 

(485)

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating profit excluding pre-opening costs and  non-trading items

 

544

 

1,925

 

4,792

 

 

 

Pre-opening costs

 

(165)

 

(197)

 

(644)

 

 

 

Share based payments

 

(50)

 

(50)

 

(100)

 

 

 

Exceptional Costs - rebranding

 

               -  

 

               -  

 

(55)

 

 

 

Exceptional Costs - impairment of lease premiums

 

(172)

 

(294)

 

(294)

 

 

 

Exceptional Costs - impairment of property, plant and equipment

 

(9,320)

 

(3,576)

 

(3,576)

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating (loss) / profit

 

(9,163)

 

(2,192)

 

125

 

 

 

 

 

 

 

 

 

 

 

 

 

Finance income

 

(119)

 

(113)

 

1

 

 

 

Finance expense

 

 

 

 

 

(214)

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss before tax

 

(9,282)

 

(2,305)

 

(88)

 

 

 

 

 

 

 

 

 

 

 

 

 

Income tax

 

(20)

 

(332)

 

(760)

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss and total comprehensive income period

 

 

 

 

 

 

 

 

 

attributable to equity shareholders

 

(9,302)

 

(2,637)

 

       (848)

 

 

 

 

 

 

 

 

 

 

 

 

 

loss per share

 

 

 

 

 

 

 

 

 

Basic

 

(15.56p)

 

(4.95p)

 

(1.56p)

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated statement of changes in equity
for the 26 weeks ended 2 July 2017 (unaudited)

 

 

Share capital

Share premium

Merger reserve

Retained deficit

Total

 

 

 

£'000

£'000

£'000

£'000

£'000

 

 

 

 

 

 

 

 

 

 

Balance at 01 January 2017

5,975

21,348

992

1,851

30,166

 

 

 

 

 

 

 

 

 

 

Issue of ordinary shares

5

28

-

-

33

 

 

Total comprehensive income for the period

-

-

-

(9,302)

(9,302)

 

 

Share based payments - credit to equity

-

-

-

50

50

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at 02 July 2017

5,980

21,376

992

(7,401)

20,947

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at 27 December 2015

5,322

13,371

992

2,599

22,284

 

 

 

 

 

 

 

 

 

 

Issue of ordinary shares

14

32

-

-

46

 

 

Total comprehensive income for the period

-

-

-

(2,637)

(2,637)

 

 

Share based payments - credit to equity

-

-

-

50

50

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at 3 July 2016

5,336

13,403

992

12

19,743

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at 27 December 2015

5,322

13,371

992

2,599

22,284

 

 

 

 

 

 

 

 

 

 

Issue of ordinary shares

653

7,977

-

-

8,630

 

 

Total comprehensive income for the period

-

-

-

(848)

(848)

 

 

Share based payments - credit to equity

-

-

-

100

100

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at 01 January 2017

5,975

21,348

992

1,851

30,166

 

 

 

 

 

 

 

 

 

  

Consolidated balance sheet
At 2 July 2017 (unaudited)

 

 

 

2 July

 

3 July

 

01 January

 

 

 

 

 

 

2017

 

2016

 

2017

 

 

 

 

 

£'000

 

£'000

 

£'000

 

 

 

Non-current assets

 

 

 

 

 

 

 

 

 

Intangible assets

 

444

 

469

 

473

 

 

 

Property, plant and equipment

 

27,844

 

28,944

 

34,200

 

 

 

Pre-paid operating lease charges

 

1,833

 

1,614

 

1,861

 

 

 

Other non-current assets

 

278

 

198

 

279

 

 

 

 

 

30,399

 

31,225

 

36,813

 

 

 

 

 

 

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

 

 

 

Inventories

 

2,442

 

1,980

 

2,465

 

 

 

Trade and other receivables

 

4,195

 

3,270

 

4,390

 

 

 

Pre-paid operating lease charges

 

114

 

168

 

124

 

 

 

Cash and cash equivalents

 

1,579

 

2,555

 

5,004

 

 

 

 

 

8,330

 

7,973

 

11,983

 

 

 

 

 

 

 

 

 

 

 

 

 

Total assets

 

38,729

 

39,198

 

48,796

 

 

 

 

 

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

 

 

Trade and other payables

 

(8,191)

 

(7,364)

 

(9,163)

 

 

 

Corporation tax liabilities

 

(407)

 

-

 

(407)

 

 

 

 

 

(8,598)

 

(7,364)

 

(9,570)

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-current liabilities

 

 

 

 

 

 

 

 

 

Provisions

 

(30)

 

(45)

 

(35)

 

 

 

Lease incentives

 

(1,168)

 

(832)

 

(1,059)

 

 

 

Deferred tax liability

 

(986)

 

(1,214)

 

(966)

 

 

 

Long-term borrowings

 

(7,000)

 

(10,000)

 

(7,000)

 

 

 

 

 

(9,184)

 

(12,091)

 

(9,060)

 

 

 

 

 

 

 

 

 

 

 

 

 

Total liabilities

 

(17,782)

 

(19,455)

 

(18,630)

 

 

 

 

 

 

 

 

 

 

 

 

 

Total net assets

 

20,947

 

19,743

 

30,166

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity

 

 

 

 

 

 

 

 

 

Share capital

 

5,980

 

5,336

 

5,975

 

 

 

Share premium

 

21,376

 

13,403

 

21,348

 

 

 

Merger reserve

 

992

 

992

 

992

 

 

 

Retained (deficit) / profit

 

(7,401)

 

12

 

1,851

 

 

 

Total equity

 

20,947

 

19,743

 

30,166

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated cash flow statement
for the 26 weeks ended 2 July 2017 (unaudited)

 

 

 

 

26 weeks to

 

27 weeks to

 

53 weeks

 

 

 

 

 

 

2 July

 

3 July

 

1 January

 

 

 

 

 

 

2017

 

2016

 

2017

 

 

 

 

 

 

£'000

 

£'000

 

£'000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating activities

 

 

 

 

 

 

 

 

 

 

Cash generated from operations

 

 

1,075

 

1,195

 

5,368

 

 

 

Corporation tax paid

 

 

-

 

-

 

(600)

 

 

 

Net cash inflow from operating activities

 

 

1,075

 

1,195

 

4,768

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investing activities

 

 

 

 

 

 

 

 

 

 

Purchase of property, plant and equipment

 

 

(4,414)

 

(5,044)

 

(11,652)

 

 

 

Interest received

 

 

-

 

-

 

1

 

 

 

Net cash flows used in investing activities

 

 

(4,414)

 

(5,044)

 

(11,651)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Financing activities

 

 

 

 

 

 

 

 

 

 

Net proceeds from issues of ordinary shares

 

 

33

 

46

 

8,630

 

 

 

Bank loan receipt

 

 

-

 

4,250

 

6,250

 

 

 

Bank loan repayment

 

 

-

 

-

 

(5,000)

 

 

 

Interest paid

 

 

(119)

 

(113)

 

(214)

 

 

 

Net cash flows generated / (used) in financing activities

 

 

(86)

 

4,183

 

9,555

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net decrease in cash and cash equivalents

 

 

(3,425)

 

334

 

2,783

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents at beginning of the period

 

 

5,004

 

2,221

 

2,221

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents as at 3 July 2016

 

 

1,579

 

2,555

 

5,004

 

 

 

  

 

Notes to the condensed financial statements
for the 26 weeks ended 2 July 2017 (unaudited)

1      General information

Tasty plc ("Tasty") is a public limited company incorporated in the United Kingdom under the Companies Act (registration number 5826464).  The Company is domiciled in the United Kingdom and its registered address is 32 Charlotte Street, London, W1T 2NQ.  The Company's ordinary shares are traded on the Alternative Investment Market of the London Stock Exchange ("AIM").  Copies of this Interim Report or the Annual Report and Financial Statements may be obtained from the above address or on the investor relations section of the Company's website at www.dimt.co.uk.

2      Basis of accounting

The condensed financial statements have been prepared using accounting policies consistent with International Financial Reporting Standards (IFRS) and International Financial Reporting Interpretations Committee (IFRIC) interpretations as endorsed by the European Union. The same accounting policies, presentation and methods of computation have been followed in the preparation of these results as were applied in the Company's latest annual audited financial statements.

The financial information for the 26 weeks ended ended 2 July 2017 has not been subject to an audit nor a review in accordance with International Standard on Review Engagements 2410, Review of Interim Financial Information Performed by the Independent Auditor of the Entity, issued by the Auditing Practices Board.

The financial information for the period ended 1 January 2017 does not constitute the full statutory accounts for that period. The Annual Report and Financial Statements for 2016 have been filed with the Registrar of Companies. The Independent Auditors' Report on the Annual Report and Financial Statements for 2016 was unqualified, did not draw attention to any matters by way of emphasis, and did not contain a statement under 498(2) or 498(3) of the Companies Act 2006.

The condensed financial statements are presented in sterling and all values are rounded to the nearest thousand pounds (£'000).

Except when otherwise indicated, the consolidated accounts incorporate the financial statements of Tasty plc and its subsidiary, Took Us A Long Time Limited, made up to the relevant period end.
 

3      Income tax

The income tax charge has been calculated by reference to the estimated effective corporation tax and deferred tax rates of 20% (2016 - 20%).  

4      Earnings per share

 

 

 

 

 

26 weeks to

 

27 weeks to

 

53 weeks

 

 

 

 

 

 

2 July

 

3 July

 

1 January

 

 

 

 

 

 

2017

 

2016

 

2017

 

 

 

 

 

 

Pence

 

Pence

 

Pence

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss per ordinary share

 

 

(15.56)

 

(4.95)

 

(1.56)

 

 

 

Diluted Loss per ordinary share

 

 

(15.56)

 

(4.95)

 

(1.56)

 

 



The basic earnings per share figures are calculated by dividing the net profit for the period attributable to shareholders by the weighted average number of ordinary shares in issue during the period.  The diluted earnings per share figure allows for the dilutive effect of the conversion into ordinary shares of the weighted average number of options outstanding during the period. Options are only taken into account when their effect is to reduce basic earnings per share.

Earnings per share have been calculated using the numbers shown below:

 

 

 

 

 

 

26 weeks to

 

27 weeks to

 

53 weeks

 

 

 

 

 

 

2 July

 

3 July

 

1 January

 

 

 

 

 

 

2017

 

2016

 

2017

 

 

 

 

 

 

number '000

 

number '000

 

number
'000

 

 

 

Weighted average ordinary shares (basic)

 

 

59,763

 

53,243

 

54,314

 

 

 

Weighted average ordinary shares (diluted)

 

 

59,763

 

53,243

 

54,314

 

 

 

 

 

 

 

 

 

 

 

 

 

  

 

 

 

 

 

26 weeks to

 

27 weeks to

 

53 weeks

 

 

 

 

 

 

2 July

 

3 July

 

1 January

 

 

 

 

 

 

2017

 

2016

 

2017

 

 

 

 

 

 

£'000

 

£'000

 

£'000

 

 

 

Loss for the financial period

 

 

(9,302)

 

(2,637)

 

(848)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

5      Reconciliation of profit before tax to net cash inflow from operating activities

 

 

 

 

 

26 weeks to

 

27 weeks to

 

53 weeks

 

 

 

 

 

 

2 July

 

3 July

 

1 January

 

 

 

 

 

 

2017

 

2016

 

2017

 

 

 

 

 

 

£'000

 

£'000

 

£'000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss before tax

 

 

(9,282)

 

(2,305)

 

(88)

 

 

 

Finance income

 

 

-

 

-

 

(1)

 

 

 

Finance expense

 

 

119

 

113

 

214

 

 

 

Write-off of rent premium

 

 

172

 

294

 

 

 

 

 

Share based payment charge

 

 

50

 

50

 

100

 

 

 

Depreciation

 

 

1,345

 

1,020

 

6,034

 

 

 

Impairment

 

 

9,320

 

3,576

 

-

 

 

 

Amortisation of intangible assets

 

 

1

 

1

 

2

 

 

 

Onerous lease provision movement

 

 

(5)

 

-

 

(10)

 

 

 

Increase in inventories

 

 

23

 

(168)

 

(653)

 

 

 

Increase in trade and other receivables

 

 

196

 

(791)

 

(1,330)

 

 

 

Increase in trade and other payables

 

 

(864)

 

(595)

 

1,100

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,075

 

1,195

 

5,368

 

 

 


 

 

 

 

 

 

 

 

 

 

 

 

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
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