Final Results

BELGO GROUP PLC 22 September 1999 Belgo Group PLC Unaudited Preliminary Results for the 52 Weeks ended 27 June 1999 Belgo Group PLC, the leading restaurant group, announces its unaudited preliminary results for the 52 weeks ended 27 June 1999. Highlights *Group turnover up by 554% to £27.1m (1998: £4.1m) *Profit before taxation and goodwill amortisation of £4.6m (1998: £0.4m) *Earnings per share (excluding goodwill) increased by 733% to 0.36p (1998: 0.043p) *Total dividend per share for the year of 0.03p (1998: nil) *Signature Restaurants and Caprice Holdings successfully integrated into the Group and expanded through the opening of J Sheekey and Bam-Bou *Successful expansion of the branded division with Belgo restaurants opening in Bristol, Dublin, New York, Ladbroke Grove and a Bierodrome in Islington *Two additional restaurants are currently under construction in Battersea and Clapham and further new sites are under consideration Andy Bassadone, Chief Executive commented: 'This has been a particularly important year in the Group's development, and we are now in a strong position to go forward and continue developing both the branded and specialist operations. The integration of the acquisitions we made in 1998 is now complete, and this is reflected in the margin improvements and an increase in restaurant sales. 'We currently have two restaurants under construction, both of which will be open by Christmas, and we continue to look at opportunities for organic expansion both in the UK and the USA. I am confident that we are now well placed to take advantage of the growing market for quality restaurants.' For further information please contact: Andy Bassadone, Tel: 0171 638 9571 today until 12.00pm Chief Executive Belgo Group Tel: 0171 209 9535 thereafter Simon Rigby/Rebecca Davies Tel: 0171 638 9571 Citigate Dewe Rogerson BELGO GROUP PLC Chairman's Statement During the past year the Group has continued to grow, both organically and by acquisition. Profit before tax and goodwill amortisation rose to £4.6m on sales of £27.1m. Basic earnings per share, excluding goodwill amortisation, increased to 0.36p. Comparative figures for 1998 are not representative, as the period only included the Belgo and Signature restaurant businesses for 5 1/2 months and two weeks respectively since their acquisitions by the Group. In accordance with accounting standard FRS10, goodwill arising on acquisitions is now required to be amortised through the profit and loss account over the directors' estimate of its useful economic life. The effect of this has been to reduce profits for the year by £561,000. The board is proposing a final dividend of 0.02p per share (making a total of 0.03p per share for the year) which will be paid on 5 November 1999 to shareholders on the register on 15 October 1999. Review of operations This has been an active and encouraging year for the business. The group now comprises fourteen restaurants and bars. Two further units are under construction and we are actively seeking more sites. Sales have grown five-fold by comparison with last year, partly through the acquisition of Caprice Holdings in September 1998, partly through having the benefit of a full year's trading from the Belgo and Signature businesses, and partly through organic growth. On a like for like basis, group sales for the year are 3% ahead of last year. The Belgo restaurants have had a satisfactory year. The two original Belgo restaurants, in Covent Garden and Camden areas of London, have continued to prosper, showing like for like sales growth of 5%. Four new Belgos were opened during the year, in Bristol, Dublin, the Notting Hill area of West London, and Belgo Nieuw York, which opened in January 1999 with the assistance of our joint venture partners Avado Brands Inc. To complement the expansion of the Belgo restaurants, the group has been developing the concept of Belgo bars. These will typically be smaller than the restaurants with the emphasis on serving a full range of Belgian beers with ancillary dining facilities. The first of these 'Bierodromes' had a very successful opening in Upper Street, North London in February 1999. The Signature group of restaurants, comprising Daphne's, The Collection and Pasha, has seen an improvement in margins and the opening of a fourth restaurant, Bam-Bou. This restaurant offers French Vietnamese cuisine and was opened in Percy Street, Fitzrovia in London's West End in March 1999. It is performing ahead of the board's expectations. As already mentioned, in September 1998 the Company acquired Caprice Holdings, which owns three of London's leading restaurants, The Ivy, Le Caprice and J Sheekey. Cover levels at The Ivy and Le Caprice have increased from their previously high base, and both units have contributed strongly to turnover and profits during the year. J Sheekey was reopened in November 1998 to wide critical acclaim after an extensive refurbishment and is already in profit. Prospects The group is continuing its strategy of organic expansion across the whole range of its operations, both branded and specialist. The Belgo and Bierodrome operations are continuing to expand, and considerable effort is being made to find suitable sites, location being a prime consideration. A site for the second Bierodrome has recently been secured in Clapham, South London and will be open in time for the Millenium celebrations. Other suitable sites are actively being sought, both in London and elsewhere. International expansion plans for Belgo restaurants are proceeding. Following the successful opening of Belgo Nieuw York, we have been searching for new sites in the United States with the assistance of our joint venture partners Avado Brands. Our targets are in cosmopolitan areas of cities such as Boston, Chicago and Washington. Meanwhile, the first franchise of the Belgo restaurant concept was successfully opened in Jersey, Channel Islands in July 1999 and further applications for franchises are currently under consideration. Following the successful opening of Bam-Bou, the expansion of our specialist restaurants will continue. A site for the next restaurant, based on a new Italian concept, has already been secured in Battersea Rise, South London and is expected to open before Christmas. During the period under review the board has implemented its strategic objectives for the initial development of the Group. The Group now has twelve restaurants and bars in operation in the UK, one restaurant in Dublin, another in New York and a franchise operation in Jersey. The results have reflected the substantial effort, dedication and expertise put into the business by all the staff and employees. The Group is now in a position to implement the next phase of its expansion, primarily through organic growth. It is also an appropriate time to strengthen the board with a full time finance director. Barry Bartman will be retiring as part time finance director at the forthcoming Annual General Meeting but has agreed to remain on the board in a non-executive capacity. I thank him for his valuable contribution over the past three years. Nick Fiddler joined Belgo in March 1999 from BDO Stoy Hayward's corporate finance team and a resolution for his appointment will be put to the Annual General Meeting. 1998/99 has been a successful year and will provide a sound platform for the Group's further expansion. The current year will have the benefit of a full twelve months' contribution from all the Group's units, together with a partial contribution from those currently under development, and I am confident that the results will show further growth in sales and profits. Luke Johnson 22 September 1999 Chairman BELGO GROUP PLC Unaudited consolidated profit and loss account for the 52 weeks ended 27 June 1999 52 weeks ended 15 months ended Notes 27 June 1999 30 June 1998 £'000 £'000 Turnover - continuing operations 1 18,115 3,595 - acquisition 9,511 - - discontinued operations - 548 Less share of joint ventures (continuing) (536) - ______ ______ Group turnover 27,090 4,143 Cost of sales (7,488) (1,629) ______ ______ Gross profit 19,602 2,514 Administrative expenses (15,043) (2,148) ______ ______ Trading profit 4,559 366 Amortisation of goodwill - acquisition 2 (561) - Operating profit/(loss) - continuing operations 3,171 518 - acquisition (after goodwill amortisation) 827 - - discontinued operations - (152) ______ ______ 3,998 366 Operating loss - joint ventures (74) - ______ ______ 3,924 366 Restructuring costs - (128) ______ ______ 3,924 238 Net interest received 154 167 Share of joint venture interest payable (39) - ______ ______ Profit on ordinary activities before taxation 4,039 405 Tax on profit on ordinary activities (1,063) (150) ______ ______ Profit on ordinary activities after taxation 2,976 255 Dividends 3 (307) (96) ______ ______ Retained profit for the period 2,669 159 ====== ====== Earnings per share - basic 4 0.302p 0.043p - diluted 0.270p 0.041p ====== ====== Earnings per share excluding goodwill amortisation - basic 0.358p 0.043p - diluted 0.320p 0.041p ====== ====== All recognised gains and losses are included within the profit and loss account. BELGO GROUP PLC Unaudited consolidated balance sheet as at 27 June 1999 Note 27 June 1999 30 June 1998 £'000 £'000 £'000 £'000 Fixed assets Intangible assets 2 14,129 - Tangible assets 13,791 4,722 Investments 208 300 Joint ventures Share of gross assets 1,456 95 Share of gross liabilities (1,474) - _____ _____ (18) 95 _____ _____ 28,110 5,117 Current assets Stock 831 157 Debtors 1,906 701 Cash at bank and in hand 7,364 6,506 _____ _____ 10,101 7,364 Creditors: amounts falling due within one year (6,569) (3,828) _____ _____ Net current assets 3,532 3,536 _____ _____ Total assets less current liabilities 31,642 8,653 Creditors: amounts falling due after more than one year 6,003 33 Provision for liabilities and charges 288 53 _____ _____ Net assets 25,351 8,567 ===== ===== Capital and reserves Called up share capital 10,231 18,171 Share premium account 19,150 16,356 Capital redemption reserve - 3,310 Merger reserve 162 162 Goodwill reduction reserve 5,868 - Profit and loss account (10,060) (29,432) _____ _____ Shareholders' funds 5 25,351 8,567 ===== ===== Analysis of shareholders' funds Equity 25,351 (885) Non-equity - 9,452 _____ _____ 25,351 8,567 ===== ===== BELGO GROUP PLC Unaudited consolidated cash flow statement for the 52 weeks ended 27 June 1999 52 weeks ended 15 months ended 27 June 1999 30 June 1998 £'000 £'000 £'000 £'000 Net cash inflow from operating activities 3,354 643 Returns on investments and servicing of finance Interest received 476 190 Interest paid (34) (28) Finance lease interest (11) (3) Loan note interest (277) - _____ _____ 154 159 Taxation UK corporation tax (626) - Capital expenditure and financial investment Purchase of tangible fixed assets (7,510) (900) Disposal proceeds on sale of fixed assets 54 - _____ _____ (7,456) (900) Acquisitions and disposals Purchase of subsidiaries (1,692) (12,224) Purchase of investments in joint ventures - (155) _____ _____ (1,692) (12,379) Equity dividends paid (102) - _____ _____ Cash outflow before management of liquid resources and financing (6,368) (12,477) Management of liquid resources Decrease/(increase) in bank deposit accounts 4,514 (4,514) Increase in restricted deposits (6,000) - _____ _____ (1,486) (4,514) Financing Issue of ordinary share capital 8,468 19,902 Share issue costs (230) (505) Repayment of bank loan (898) (290) Repayment of finance leases (62) (12) _____ _____ Net cash inflow from financing 7,278 18,285 _____ _____ (Decrease)/increase in cash (576) 1,294 ===== ===== BELGO GROUP PLC 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, unless shown separately as discontinued activities. Discontinued activities comprise the Group's former property investment activities. Turnover from continuing activities includes fees from third parties for the use of the Belgo name. The group's share of joint venture turnover arises in the US. The acquisition in the 52 weeks ended 27 June 1999 related to Caprice Holdings Limited and Caprice Events Limited the principal business of which is the operation of Le Caprice, The Ivy and J. Sheekey. The total costs of sales and administrative expenses relating to these acquisitions amounted to £2,643,000 and £5,480,000 respectively. 2.With the exception of the adoption of FRS10, the above figures have been prepared using the same accounting policies as those adopted by the Group in the period to 30 June 1998. Under FRS10, goodwill arising on acquisitions represents the difference between the fair value of the consideration paid and the fair value of the net assets acquired. It is amortised through the profit and loss account over the directors' estimate of its useful economic life, which is twenty years. As permitted under FRS10, goodwill arising on previous acquisitions has not been restated from reserves to tangible fixed assets. 3. Dividends 52 weeks ended 15 months ended 27 June 1999 30 June 1998 £'000 £'000 Interim dividend paid at 0.01p per ordinary share 102 - Final dividend proposed at 0.02p per ordinary share 205 - _____ _____ 307 - Non-equity preference dividend accrued - 96 _____ _____ 307 96 ===== ===== 4.Earnings per share The calculation of earnings per share is based on the weighted average number of issued ordinary shares during the period of 986,553,691 (1998 - 369,622,000) having adjusted for the bonus element of the open offer made on 25 August 1998 and earnings of £2,976,000 (1998 - £159,000) being the result after taxation for the period after attributable preference dividends. Diluted earnings per share includes 117,223,987 (1998 - 14,494,604) shares in respect of options and warrants, giving a total number of shares of 1,103,777,678 (1998 - 384,116,604). Earnings per share excluding the amortisation of goodwill (£561,000) is based on adjusted earnings of £3,537,000 (1998 - £159,000). The 1998 comparatives have been restated in accordance with FRS 14. 5.Reconciliation of movements in shareholders' funds The movement in shareholders' funds can be summarised as follows: As at As at 27 June 30 June 1999 1998 £'000 £'000 Profit for the financial period 2,976 255 Dividends (307) - _____ _____ 2,669 255 New share capital subscribed in the period 14,476 21,032 Expenses of issue of shares (230) (505) Goodwill written off (109) (12,891) Exchange differences (22) - _____ _____ Net increase in shareholders' funds 16,784 7,891 Opening shareholders' funds 8,567 676 _____ _____ Net assets at end of period 25,351 8,567 _____ _____ 6.Financial information The financial information set out above does not constitute the Company's statutory accounts. The results for the period ended 30 June 1998 are taken from the statutory accounts for 1998 that have been delivered to the Registrar of Companies. The auditors have reported on the 1998 accounts and their report was unqualified and did not contain any statement under section 237 of the Companies Act. This unaudited preliminary announcement is consistent with the draft financial statements for the 52 weeks ended 27 June 1999 the audit of which is substantially complete. 7. Report and accounts The Report and Accounts for 1999, which will include the Notice of the Annual General Meeting, will be posted to the shareholders shortly. Copies of the Report and Accounts will be available from Belgo Group PLC, 1 Neal's Yard, London, WC2H 9DP.

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