Final Results
Signature Restaurants PLC
24 September 2002
24 September 2002
Signature Restaurants PLC
Preliminary Results for the year ended 30 June 2002
Signature Restaurants PLC announces its preliminary results for the year ended
30 June 2002.
Main points
• Group turnover of £39.42m (2001: £39.97m)
• Profit before tax, goodwill amortisation and exceptional items of
£3.13m (2001: £4.32m)
• Difficult trading conditions throughout the period particularly in
central London
• Disposals of under-performing sites
• Strada opened in Clapham, Earls Court, and Market Place and under
construction in Richmond and Wimbledon
• No dividend (2001 - Nil)
• Change in accounting policy due to release of FRS 19 - Deferred
Taxation accounting
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
Year ended 30 June 2002
For the year ended 30 June 2002, the Group reported sales of £39.4 million, a
decrease of 1.4% against the preceding year. Profits before taxation and prior
to goodwill amortisation and exceptional items, were £3.1 million compared to
£4.3 million in the previous year.
Basic earnings per share excluding goodwill amortisation and exceptional items
were 5.73p (2001 - 8.68p). In light of the competitive trading conditions the
Board is not proposing to pay a dividend. Rather, it intends to re-invest cash
into developing the Group together with reducing the existing net debt which was
£0.7m as at 30 June 2002.
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).
The financial year ended 30 June 2002 proved a challenge. The Group's
restaurants are predominantly based in central London and several factors
depressed customer spending in the capital. Reduced tourism, following the
dreadful events of 11 September, had an impact on the whole hospitality industry
while weak financial markets affected spending by City workers. Despite tough
conditions across the London restaurant market, competition continues to
increase, and this has had an inevitable effect on customer numbers and our
ability to pass on cost increases through higher prices.
As a response to difficult market conditions the Board has taken decisive action
to reduce the Group's cost base and dispose of under performing units.
Review of Operations
The Belgo and Bierodrome division, which is in the mid-priced market, suffered
the most during the period with like for like sales down by 15 per cent. This
division's flagship, Belgo Centraal, derives a sizeable proportion of its
revenue from tourists. The events of September 11 compounded what were already
difficult trading conditions as a result of the adverse publicity surrounding
the UK's foot and mouth outbreak.
In response to the under-performance of a number of the Belgo and Bierodrome
outlets the Board has disposed of Belgo in Dublin, Bristol and Ladbroke Grove
together with Bierodrome in Fulham and Clerkenwell. The Belgo and Bierodrome
division now consists of two Belgo restaurants and three Bierodrome bars.
Turnover has now stabilised somewhat, but all the units in this division trade
at levels below previous years.
Caprice Holdings, consisting of The Ivy, J Sheekey and Le Caprice, performed
well through the period. Although these are mature businesses, they have
maintained their high reputations and solid profits.
The Board disposed of The Collection, where trading was increasingly difficult
and the prospect of any improvement was slight without significant capital
investment. Daphne's is now under the control of the Caprice Holdings
management, and has responded well to their influence. Bam-Bou and Pasha have
fared less well, but both remain profitable and tightly controlled.
The Group's Strada brand continued to perform well. All openings to date have
been within London. During the period, the Group has opened a further three
Strada, bringing the total to nine at the period end with a further two under
construction. However Strada's contribution to the Group's overall
profitability remains relatively modest, owing to the size of the sites and the
relatively low average spend. We remain focused on expanding this division with
a cautious approach to site selection. Our objective is to open a further four
Strada over the next twelve months.
Prospects
The Group has been rationalised and has a focused expansion programme, with all
future openings restricted to the Strada concept and funded from cash flow.
However, conditions in the London restaurant market remain highly competitive
and we do not anticipate a material recovery across the industry in central
London during 2002/03. The Board continues to concentrate on containing costs
and restoring growth from existing outlets while also taking a cautious approach
towards the expansion of Strada.
As was reported on 3 May 2002, the Independent Directors have received a
preliminary conditional approach that may or may not lead to an offer being made
for the entire issued share capital of the company. These discussions are
ongoing.
Luke Johnson 24 September 2002
Chairman
Consolidated Profit And Loss Account
Notes Year ended Year ended
30 June 1 July
2002 2001
(unaudited) (audited)
as restated
£'000 £'000
Turnover 1
Continuing Less share of joint ventures (discontinued) 39,420 40,484
- (516)
______ ______
Group turnover 39,420 39,968
Cost of sales (11,078) (11,227)
______ ______
Gross profit 28,342 28,741
Administrative expenses (including goodwill amortisation) (26,294) (28,457)
______ ______
Operating profit before goodwill amortisation and exceptional 3,163 4,741
items
Provision for impairment of tangible fixed assets (381) (3,723)
Amortisation of goodwill 2 (734) (734)
______ ______
Group operating profit 2,048 284
Share of joint venture operating profit / (loss) including
impairment provision (discontinued) 183 (1,462)
Profit on the disposal of fixed assets 259 -
Net interest paid (216) (105)
Share of joint venture interest payable (discontinued) - (102)
______ ______
Profit / (loss) on ordinary activities before taxation 2,274 (1,385)
Taxation 5 (772) (332)
______ ______
Retained profit/(loss) for the period 1,502 (1,717)
______ ______
Earnings/(loss) per ordinary share - basic 7 3.65p (3.74p)
- diluted 7 3.64p (3.74p)
Earnings per ordinary share excluding goodwill amortisation and
exceptional items
- basic 7 5.73p 8.68p
- diluted 7 5.72p 8.35p
All recognised gains and losses are included in the profit and loss account.
Consolidated Balance Sheet
30 June 1 July
2002 2001
(unaudited) (audited)
as restated
£'000 £'000
Fixed Assets
Intangible assets 2 11,692 12,426
Tangible assets 13,215 15,932
Investments
Joint ventures 3
Share of gross assets - 71
Share of gross liabilities - (262)
Other investments 63 63
______ ______
24,970 28,230
Current Assets
Stock 973 1,286
Debtors 4,198 2,197
Cash at bank and in hand 5,674 4,500
______ ______
10,845 7,983
Creditors: amounts falling due within one year (13,599) (14,922)
______ ______
Net current liabilities (2,754) (6,939)
______ ______
Total assets less current liabilities 22,216 21,291
Creditors: falling due after more than one year (1,125) (1,875)
Provision for liabilities and charges 4 (842) (669)
______ ______
Net assets 20,249 18,747
______ ______
Capital and Reserves
Called up share capital 8,226 8,226
Reserves 12,023 10,521
______ ______
Equity shareholders' funds 20,249 18,747
______ ______
Consolidated cash flow statement
Notes Year ended Year ended
30 June 2002 1 July 2001
(unaudited) (audited)
£'000 £'000
Net cash inflow from operating activities 8 6,151 6,874
Returns on investment and servicing of finance
Interest received 3 311
Interest paid (219) (191)
Loan note interest - (225)
______ ______
(216) (105)
Taxation
UK Corporation tax (1,437) (707)
Capital expenditure and financial investment
Purchase of tangible fixed assets (3,113) (4,527)
Disposal proceeds on sales of fixed assets 1,885 17
______ ______
(1,228) (4,510)
Equity dividends paid - (205)
______ _____
Cash inflow before financing 3,270 1,347
- -
Financing
Redemption of ordinary share capital and associated - (5,943)
costs
Issue of ordinary share capital - 21
Loans to Joint Ventures - (1,964)
Debt due within one year
- repayment of loans (750) (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 (10) (20)
______ ______
Net cash outflow from financing (760) (5,281)
______ _____
Increase / (Decrease) in cash in the period 9 2,510 (3,934)
______ ______
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.
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 June 2002 was a charge of £173,000
(year ended 1 July 2001 - credit of £112,000). In addition reserves
brought forward in the period ended 1 July 2001 were adjusted with a charge
of £781,000.
5 The tax charge is further analysed as follows:
Year ended Year ended
30 June 2002 1 July 2001
£'000 £'000
(as restated)
Corporation tax 599 444
Deferred taxation charge / (credit) 173 (112)
_____ _____
772 332
_____ _____
6 The directors do not propose to pay a dividend (2001 - Nil).
7 The calculation of earnings per share is based on the weighted average
number of issued ordinary shares during the period of 41,132,059 (2001 -
45,933,531) and earnings of £1,502,000 being the result after taxation
(2001 - loss of £1,717,000).
Diluted earnings per share includes 98,097 (2001 - 1,844,012) shares in
respect of options and warrants, giving a total number of shares of
41,230,156 (2001 - 47,777,543). Earnings per share excluding goodwill
amortisation and exceptional items of £734,000 (2001 - £734,000) and
£122,000 (2001 - £4,970,000) respectively is based on adjusted earnings of
£2,358,000 (2001 - £3,987,000).
All calculations of earnings per share have been restated to reflect the
effects of the 20 for 1 share consolidation that occurred during the year.
8 Reconciliation of operating profit to net cash inflow from operating
activities
Year ended Year ended
30 June 2002 1 July 2001
£'000 £'000
Operating profit 2,048 284
Depreciation charge 1,486 1,345
Amortisation of goodwill 734 734
Impairment of tangible fixed assets 381 3,723
Decrease / (increase) in stock 313 (234)
Decrease in debtors 338 128
Increase in creditors 851 894
_____ _____
Net cash inflow from operating activities 6,151 6,874
______ ______
9 Reconciliation of net cash inflow to movement in net debt
Year ended Year ended
30 June 2002 1 July 2001
£'000 £'000
Increase / (decrease) in cash in the period 2,510 (3,934)
Cash outflow / (inflow) from movement in debt and lease 760 (2,605)
financing
_____ _____
Movement in net debt in the period 3,270 (6,539)
Opening net (debt) / funds (3,973) 2,566
_____ _____
Closing net debt (703) (3,973)
______ ______
10 Analysis of net debt
As at Cash Non-cash As at
1 July Flow Movement 30 June
2001 2002
£'000 £'000 £'000 £'000
Cash at bank and in hand - 1,174 - 1,174
Cash deposits 4,500 - - 4,500
______ ______ ______ ______
4,500 1,174 - 5,674
Overdrafts (1,336) 1,336 - -
______ ______ ______ ______
3,164 2,510 - 5,674
Debt due within 1 year (5,250) 750 (750) (5,250)
Debt due after 1 year (1,875) - 750 (1,125)
Finance leases (12) 10 - (2)
______ _____ ______ ______
Total (3,973) 3,270 - (703)
______ _____ ______ ______
11 These preliminary 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 1 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.
12 These preliminary results were approved by the board on 19 September 2002.
This information is provided by RNS
The company news service from the London Stock Exchange
Latest directors dealings
- 4 hours ago Fuller Smith & Turner
- 4 hours ago SSP Group
- 4 hours ago Fuller Smith & Turner
- 4 hours ago Unilever
- 6 hours ago Diageo