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: [phone]

Jonny Plant, Chief Executive

Cenkos Securities                                               Tel: [phone]

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

 

END

 

 

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