Final Results

RNS Number : 7064U

Tasty PLC

19 May 2008

 



Tasty plc

Preliminary results for the 52 weeks ended 30 December 2007

Highlights

*    Turnover up 103% to £5,437,000 (2006 - £2,676,000)

*    Dim-t opened in Gloucester Road in April, Maidstone in August and Winchester in November, and all three have proved to be successful openings

*    Our Central Kitchen facilities and management resources are well placed to cope with the next phase of our roll out programme.

*    Operating loss before tax and non-trading items of £659,000 (2006 - loss £28,000) 

*    Statutory pre-tax loss after non-trading items of £2,981,000 (2006 - loss £252,000)

Enquiries

Tasty plc                                                                 Tel: [phone]

Jonny Plant,  Chief Executive

Evolution Securities                                             Tel: [phone]

Tom Price

Bobbie Hilliam

Chairman's statement

I am pleased to report on the Group's full period results for 2007. Our 2007 results will be the first set of financial statements we have prepared under IFRS. Under IFRS the principal changes for the Group relate to the treatment of lease premiums, lease incentives and the basis for calculating deferred taxation, which have had a net adverse impact on our results.  Given that these are changes in accounting policy only there is no impact on the operating fundamentals or underlying cash flows of the business.

During the course of the period three new dim-t restaurants were successfully opened, and one closed, taking the total number at the period end to eight and a large central kitchen facility was established in Park Royal, London. The Group's oldest three restaurants have been refurbished to a high standard to ensure consistent brand identity throughout the Group. We have made some high level recruitments during the period to bolster the management and head office team.

Results

Turnover for the 52 weeks ended 30 December 2007 was up 103% to £5,437,000 (2006 - £2,676,000).  Operating losses before tax and non trading items were £659,000 (2006 - loss £28,000). The non-trading items relate to the disposal and impairment of property, plant and equipment of £2,194,000 (2006 - nil), pre-opening costs of £279,000 (2006 - £183,000) and flotation expenses of nil (2006 - £118,000). The overall statutory pre-tax loss after non-trading items was £2,981,000 (2006 - loss £252,000), with the loss on closure of our Nottingham unit, as previously reported, and a reduction in the carrying value of our Tunbridge Wells unit, as detailed below, contributing significantly to the loss.

Under IFRS we are required to spread the benefits of any rent free period at the start of a new lease over the full term of the lease. As a consequence the pre-opening costs in any one year are substantially higher than they were under UK GAAP. As a result we have separately identified pre-opening costs of £279,000 (2006 - £183,000) on the income statement.

The Board do not recommend the payment of a dividend.  

Openings

Dim-t opened in Gloucester Road in April, Maidstone in August and Winchester in November, and all three have proved to be successful openings.

Closure and Impairment

Nottingham was sold in October 2007 and the Board has taken the decision to impair the value of the Tunbridge Wells branch due to its performance falling below expectations.

Cashflows

Net cash outflow for the period before financing was £4,288,000 (2006 - £2,255,000). This is largely represented by capital expenditure on the expansion of the business.

During the period £5,018,000 (2006 - £4,497,000) was raised from share issues.

Net cash and cash equivalents held at the end of the year were £3,379,000 (2006 - £3,776,000).

Staff and Infrastructure

As previously reported to shareholders, Julia Fleet, formerly CEO of Ask Central plc, joined the executive Board in September and Jo Bargery, also a former Ask Central plc director, has joined our operational team.  

Our staff continue to make a key contribution to the Group's performance and I would like to take this opportunity to thank them for their support and commitment during the period.

The Group is now well positioned for its future growth. Our central kitchen facilities and management resources are well placed to cope with the next phase of our roll out programme.

The Sector

Mintel is forecasting that the eating out market is set to continue to grow at 6% p.a. until at least 2012. In the main this is due to the growth in casual dining, which is where dim-t is positioned in terms of spend and experience. Regular eating out in the UK has become accepted practice for a large number of people and customers are looking for a casual dining experience that offers excellent value for money at a lower cost rather than change their habits. Dim-t, where the average customer spend is less than £14, is well positioned to meet this requirement.

Outlook

We have made an encouraging start to 2008 with the business performing in line with our expectations, despite the background of a weakening economy. Our new Victoria restaurant opened in April and Milton Keynes opened earlier on this month. Two further restaurants are planned to be open by the period end.

AGM

The Company's AGM will take place on 12 June 2008.

Keith Lassman

Chairman

15 May 2008

Tasty plc

Consolidated Income statement for the 52 weeks ended 30 December 2007

	Note	2007		2006
		£’000		£’000
Revenue		5,437		2,676
Cost of sales		(5,531)		(2,343)
Gross (loss)/profit		(94)		333
Administrative costs		(1,434)		(662)
Other operating expenses		(1,604)		-
Operating loss excluding pre-opening costs and non trading items		(659)		(28)
Pre-opening costs		(279)		(183)
Disposal and impairment of property, plant and equipment		(2,194)		-
Exceptional flotation expenses		-		(118)
Operating loss	2	(3,132)		(329)
Finance income		151		77
Loss before taxation		(2,981)		(252)
Income tax expense	3	134		21
Loss for the period – attributable to equity shareholders		(2,847)		(231)
Loss per ordinary share
Basic and diluted	4	(10.20p)		(1.14p)

Consolidated statement of changes in equity as at 30 December 2007

	Share Capital		Share Premium		Merger Reserve		Retained deficit		Total equity
	£’000		£’000		£’000		£’000		£’000
Balance at 31 December 2005	1,942		-		886		(480)		2,348
Changes in equity for 2006
Loss for the period	-		-		-		(231)		(231)
Tax on items taken directly to equity	-		-		-		-		-
Total recognised income and expense for the period	-		-		-		(231)		(231)
Issue of share capital (net of £359,000 issue costs)	659		3,732		-		-		4,391
Equity share options granted	-		-		-		186		186
Movements on merger reserve	-		-		106		-		106
Balance at 31 December 2006	2,601		3,732		992		(525)		6,800
Changes in equity for 2007
Loss for the period	-		-		-		(2,847)		(2,847)
Tax on items taken directly to equity	-		-		-		-		-
Total recognised income and expense for the period	-		-		-		(2,847)		(2,847)
Issue of share capital (net of £169,000 issue costs)	516		4,502		-		-		5,018
Equity share options granted	-		-		-		23		23
Balance at 30 December 2007	3,117		8,234		992		(3,349)		8,994

Consolidated balance sheet at 30 December 2007

	Note		2007		2007		2006		2006
			£’000		£’000		£’000		£’000
Assets
Non-current assets
Intangible assets			10				7
Property, plant and equipment			5,230				3,193
Pre-paid operating lease charges			1,103				311
Deferred tax asset			250				116
Other receivables			196				197
Total non-current assets					6,789				3,824
Current assets
Inventories			172				82
Trade and other receivables			503				305
Prepaid operating lease charges			48				13
Cash and cash equivalents			3,379				4,003
Total current assets					4,102				4,403
Total assets					10,891				8,227
Liabilities
Non-current liabilities
Accrual for lease incentives			219				71
Total non-current liabilities					219				71
Current liabilities
Trade and other payables			1,678				1,356
Total current liabilities					1,678				1,356
Total liabilities					1,897				1,427
TOTAL NET ASSETS					8,994				6,800
Capital and reserves
Called up share capital					3,117				2,601
Share premium reserve					8,234				3,732
Retained deficit					(3,349)				(525)
Merger reserve					992				992
TOTAL EQUITY					8,994				6,800

                    



Consolidated cash flow statement for the 52 weeks ended 30 December 2007

	Note		2007		2007		2006		2006
			£’000		£’000		£’000		£’000
Cash flows from operating activities
Loss for the period before tax adjustments for:			(2,981)				(252)
Depreciation			309				102
Amortisation			1				1
Impairment losses			590				-
Loss on sale of property, plant and equipment			1,604				-
Equity settled share-based payment expense			23				186
Finance income			(151)				(77)
Cash flows from operating activities before changes in working capital			(605)				(40)
Increase in trade and other receivables			(1,128)				(471)
Increase in inventories			(90)				(57)
Increase in trade and other payables			696				878
Cash generated from operations					(1,127)				310
Income tax paid					-				(6)
Net cash flows from operating activities carried forward					(1,127)				304

Tasty plc

Consolidated cash flow statement for the 52 weeks ended 30 December 2007 (Continued)

	Note		2007		2007		2006		2006
			£’000		£’000		£’000		£’000
Cash flows from operating activities brought forward					(1,127)				304
Investing activities
Purchases of property, plant and equipment			(4,535)				(2,324)
Purchase of intangible assets			(4)				(8)
Sale of property, plant and equipment			100				-
Interest received			151				77
Net cash from/(used in) investing activities					(4,288)				(2,255)
Financing activities
Issue of ordinary shares (net of issue costs of £169,000 – 2006 - £359,000)			5,018				4,497
Net cash from financing activities					5,018				4,497
Net (decrease)/increase in cash and cash equivalents					(397)				2,546
Cash and cash equivalents at beginning of period					3,776				1,230
Cash and cash equivalents at end of period					3,379				3,776

  Notes to the preliminary announcement

1.    Basis of preparation

    The consolidated financial statements incorporate the results of the Company and its subsidiary, Took Us A Long Time Limited. The merger method of accounting has been used to consolidate the results of the subsidiary undertaking.  

    The Group has historically prepared its accounts under UK Generally Accepted Accounting Practice ('UK GAAP'), however, for the 52 weeks ended 30 December 2007 it has prepared its financial statements in accordance with International Financial Reporting Standards ('IFRSs') and its interpretations adopted by the International Accounting Standards Board ('IASB') and as endorsed for use by companies listed on an EU regulated exchange.

    The financial information contained in this announcement is extracted from but does not constitute the Group's statutory accounts for the period ended 30 December 2007 as defined in Section 240 of the Companies Act 1985. The directors approved the statutory accounts on 15 May 2008. The statutory accounts for the period ended 31 December 2006, which were prepared under UK GAAP, have been filed with the Registrar of Companies. The auditors' have reported on the full accounts for both periods and their reports were unqualified, did not include references to any matters to which the auditors drew attention by way of emphasis without qualifying their report and did not contain a statement under Section 237(2) or (3) of the Companies Act 1985. The statutory accounts for the period ended 30 December 2007 will be delivered to the Registrar of Companies in due course.

    As part of the IFRS conversion process, though not as a requirement of IFRS, the Group has changed its accounting policy in respect of allocation of costs between cost of sales and administrative expenses.

    The financial statements are presented in sterling, rounded to the nearest thousand. They are prepared on the historical cost basis.

    The annual report and accounts for the period ended 30 December 2007 has been posted to shareholders today. Electronic copies of the documents can be accessed from the Company's website at  www.dimt.co.uk.

2    Operating loss from operations

	2007		2006
	£’000		£’000
This has been arrived at after charging
Staff costs	2,220		1,032
Operating lease rentals	797		351
Amortisation of intangible fixed assets	1		1
Depreciation	309		110
Loss on disposal of fixed assets	1,604		-
Impairment of property plant and equipment	590		-
Share based payments	23		136
Pre-opening costs	279		183
Exceptional flotation expenses	-		118
Auditors’ remuneration
Audit fee
-               Audit of parent Company	7		2
-               Audit of Group financial statements	8		3
-               Audit of subsidiary undertaking	15		10
Other services
-               Taxation services	7		9

3    Tax on profit on ordinary activities

	2007		2006
	£’000		£’000
(a)           Analysis of charge for the period
Current tax
UK corporation tax on profits of the period	-		-
Current tax charge for period	-		-
Deferred tax
Adjustment in respect of prior period	-		-
Origination and reversal of temporary differences	(134)		(21)
Total deferred tax	(134)		(21)
Total income tax expense	(134)		(21)

    (b)    Factors affecting tax charge for the period

The tax charge for the period is lower than the standard rate of corporation tax in the UK. The differences are explained below:

	2007		2006
	£’000		£’000
Loss on ordinary activities before tax	(2,981)		(252)
Loss on ordinary activities multiplied by standard rate of corporation tax in the UK of 30% (2006 – 30%)	(894)		(76)
Effects of:
Expenses not deductible for tax purposes	396		48
Effects of changes in enacted tax rates and small companies rate	59		7
Increase in unprovided tax losses carried forward	305		-
Total tax expense (see (a) above)	(134)		(21)

4    Loss per ordinary share (EPS)

	2007		2006
	£’000		£’000
Numerator
Loss for the period	(2,847)		(231)
Denominator

	Number		Number
	£’000		£’000
Weighted average number of ordinary shares (basic and diluted eps)	27,911		20,221
Basic loss per ordinary share (pence)	(10.20p)		(1.14p)
Diluted loss per ordinary (pence)	(10.20p)		(1.14p)

 Basic and diluted loss per ordinary share are the same as there is no dilution. The 1,015,000 (2006 - 1,071,531) share options that have been granted in the period have not been included in the calculation of the loss per share as they are anti-dilutive.

Options are only taken into account when their effect is to reduce basic earnings per share or increase basic loss per share. Since the Group has made a loss in the current and prior period the effect of taking into account potential ordinary shares would nearly always be to reduce the basic loss per share. Share options have therefore been excluded in the calculation of diluted EPS.

 

END

 

 

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