Half-year Report

RNS Number : 3694N

Tasty PLC

24 September 2019

 

24 September 2019

Tasty plc

("Tasty" or the "Group")

Unaudited Interim Results for the 26 weeks ended 30 June 2019

Financial Highlights:

·     Placing and open offer in May 2019 raising £3.2m

·     Revenue £21.1m (2018 - £23.0m)

·     Adjusted EBITDA of £0.1m (2018 - £0.8m)

·     Loss after tax for the period of £0.8m (2018 - loss of £10.7m)

·     Loan at 30 June 2019 of £1.9m (1 July 2018 - £7.0m)

·      Net cash as at 30 June 2019 of £0.5m (1 July 2018 - net debt £4.1m)

Chairman's statement

Introduction
Tasty trades from 57 restaurants; 51 Wildwood and 6 dim t restaurants. The Wildwood restaurants offer a wide selection of "Pizza, Pasta, Grill" and are predominantly located outside of London. Dim t, our pan Asian restaurant, offers a range of dishes including dim sum, noodles, soups and a recently launched range of ramen dishes.

In May 2019, we successfully raised £3.2m through an institutional placing and open offer to existing shareholders and have reduced bank debt to £1.9m as at 30 June 2019 (1 July 2018: £7.0m).

The casual dining market continues to face headwinds and the uncertainty of Brexit means that 2019 remains a challenging year. The Group's sales performance has been weak despite benefiting from weaker comparatives following last year's extreme weather conditions and the World Cup. However, despite sales being down, our adjusted EBITDA performance for the first six months is in-line with expectations due to tighter cost control. Over the last 18 months we have made significant changes to the structure of the Group including finance and operational team enhancement. The changes to the operational structure combined with the Group's increased focus on the financial reporting and cost management, has mitigated the impact of the difficult market conditions.

Business review

We continue to make progress and have undertaken various initiatives to improve the food and drink offering, customer engagement and the development of our employees. However, along with other restaurants and retailers, we are exposed to the well documented high street challenges. Our focus is on optimising the current estate and turning around underperforming sites.

Food and drink offering

We remain focused on offering choice to our customers. We continue to offer seasonal specials and are constantly looking at ways of making the menu more exciting and offering additional options. We have trialled the "Beyond Meat" plant-based vegan burger as part of our specials menu and this will migrate onto our main menu later this year.

Customer engagement

We are working hard on improving our customer experience through profiling our consumers and analysing their feedback. We have also recruited in order to focus on service standards and upselling and we are rolling out workshops across the estate to ensure all restaurants are offering consistent service which is appealing to our customers.

People Development

We believe great people are the core to our business and we are committed to providing an engaging, open and honest environment for our teams. The investment in our training infrastructure has allowed us to promote a greater number of key positions from within.  We continue to introduce comprehensive career pathways at every level to support our employees' development, enhance job satisfaction and increase staff retention.

Optimise the estate

We have generally found landlords to be co-operative and supportive and our collaborative approach has been well received. We have been successful in achieving rent reductions and lease concessions.

We have disposed of three trading sites in the first six months of the year.  In addition, we have sub-let two sites that were not trading; one in the first six months and one post the period end. The Group continues to review the estate and further disposals will be made if appropriate.

The Board firmly believes the Group's focus should remain on the existing estate and no openings are planned for the remainder of 2019.

Christmas Focus

We published our Christmas menus online at the end of August before most other High Street chains and have already started taking bookings. We have established a dedicated team to handle reservations, all enquiries and marketing initiatives and are well prepared to maximise revenue over the festive period.

 

Results

Sales were down 8% on the corresponding period to £21.1m (2018 - £23.0m) and adjusted EBITDA was £0.1m (2018 - £0.8m).

Operating loss before highlighted items was £0.6m (2018 - loss £0.1m).

While we remain cautious about trading conditions, we have reviewed our onerous and impairment provision and do not believe it is necessary to make an adjustment for the six months ended 30 June 2019.  After taking into account all non-trade adjustments, the Group has a stated loss after tax for the period of £0.8m (2018 - loss of £10.7m)

Cash flows and financing

Cash outflow from operating activities was £0.5m (2018 - £2.3m). During the period, capital expenditure of £0.2m (2018 - £0.7m) was incurred. In addition, we raised net equity of £3.0m (2018 - £nil). This was offset by bank and interest repayment of £4.7m (2018 - £0.1m).

Overall, the net cash outflow for the period was £2.0m (2018 - inflow £1.1m).  As at 30 June 2019, the Group had net cash of £0.5m (1 July 2018 - net debt of £4.1m). 

Outlook

The market conditions for the UK restaurant sector remain challenging. However, the Group is well positioned, with a rationalised estate, new operational structure and a heightened focus on cost controls. The refreshed Wildwood and dim t offerings continue to be attractive to consumers, with encouraging trading in the first few weeks of the second half. The Group is traditionally weighted to the second half, with December being the most important month of the year, which will significantly dictate the Group's overall performance. However, the Board currently expects adjusted EBITDA performance for the full year to remain in-line with expectations.

K Lassman

Chairman

Tasty plc

24 September 2019

Enquiries:

Tasty plc                                                               Tel: [phone]

Jonny Plant, Chief Executive

Cenkos Securities                                               Tel: [phone]

Stephen Keys/Katy Birkin/Cameron MacRitchie

 

Consolidated statement of comprehensive income
for the 26 weeks ended 30 June 2019 (unaudited)

	26 weeks to		26 weeks to	52 weeks ended
	30 June		1 July	30 December
	2019		2018	2018
	£'000		£'000	£'000
Revenue	21,126		22,997	47,278
Cost of sales	(21,097)		(22,684)	(46,370)
Gross profit	29		313	908
Total operating expenses	(714)		(11,738)	(12,473)
Operating loss before highlighted items	(641)		(119)	(367)
Highlighted items	(44)		(11,306)	(11,198)
Operating loss	(685)		(11,425)	(11,565)
Finance income	4		-	-
Finance expense	(180)		(125)	(252)
Loss before tax	(861)		(11,550)	(11,817)
Income tax	7		856	204
Loss and total comprehensive income for period and attributable to owners of the parent	(854)		(10,694)	(11,613)
Loss per share attributable to the ordinary
equity owners of the parent
Basic and diluted	(1.17p)		(17.88p)	(19.42p)
The table below gives additional information to shareholders on key performance indicators:
	26 weeks to		26 weeks to	52 weeks ended
	30 June		1 July	30 December
	2019		2018	2018
	£'000		£'000	£'000
EBITDA	127		812	1,581
Depreciation, amortisation and impairment	(768)		(931)	(1,948)
Operating loss before highlighted items	(641)		(119)	(367)

Highlighted items - charged to operating expenses
	26 weeks to		26 weeks to	52 weeks ended
	30 June		1 July	30 December
	2019		2018	2018
(Loss)/profit on disposal of property plant and equipment	(27)		1,942			2,132
Onerous lease provision	-		(1,688)			(1,687)
Restructuring costs	-		(311)		(457)
Impairment of lease premium	-		(890)	(897)
Impairment of goodwill	-		-	(115)
Impairment of property, plant and equipment	-		(10,294)	(10,063)
Share based payments	(17)		(65)	(111)
Total highlighted items	(44)		(11,306)	(11,198)

Consolidated statement of changes in equity
for the 26 weeks ended 30 June 2019 (unaudited)

	Share	Share	Merger	Retained	Total
	Capital	Premium	reserve	deficit	equity
	£'000	£'000	£'000	£'000	£'000
Balance at 30 December 2018	5,980	21,376	992	(17,792)	10,556
Issue of ordinary shares	81	2,869	-	-	2,950
Total comprehensive income for the period	-	-	-	(854)	(854)
Share based payments - credit to equity	-	-	-	17	17
Balance at 30 June 2019	6,061	24,245	992	(18,629)	12,669
Balance at 31 December 2017	5,980	21,376	992	(6,290)	22,058
Issue of ordinary shares	-	-	-	-	-
Total comprehensive income for the period	-	-	-	(10,694)	(10,694)
Share based payments - credit to equity	-	-	-	65	65
Balance at 1 July 2018	5,980	21,376	992	(16,919)	11,429
Balance at 31 December 2017	5,980	21,376	992	(6,290)	22,058
Issue of ordinary shares	-	-	-	-	-
Total comprehensive income for the period	-	-	-	(11,613)	(11,613)
Share based payments - credit to equity	-	-	-	111	111
Balance at 30 December 2018	5,980	21,376	992	(17,792)	10,556

 

Consolidated balance sheet
At 30 June 2019 (unaudited)

		26 weeks to		26 weeks  to		52 weeks ended
		30 June		1 July		30 December
		2019		2018		2018
		£'000		£'000		£'000
Non-current assets
Intangible assets		351		469		352
Property, plant and equipment		16,008		17,289		16,554
Pre-paid operating lease charges		520		467		507
Other non-current assets		242		278		283
Deferred Tax		7		604		-
Total non-current assets		17,128		19,107		17,696
Current assets
Inventories		2,477		2,543		2,548
Trade and other receivables		5,128		5,006		3,538
Pre-paid operating lease charges		34		143		87
Cash and cash equivalents		2,357		2,940		4,312
Total current assets		9,996		10,632		10,485
Assets held for sale		-		-		505
Total assets		27,124		29,739		28,686
Current liabilities
Trade and other payables		(7,985)		(6,767)		(7,100)
Borrowings		(800)		(2,332)		(2,867)
Total liabilities		(8,785)		(9,099)		(9,967)
Non-current liabilities
Provisions		(3,348)		(3,348)		(3,347)
Lease incentives		(1,270)		(1,195)		(1,266)
Long-term borrowings		(1,052)		(4,668)		(3,550)
Total non-current liabilities		(5,670)		(9,211)		(8,163)
Total liabilities		(14,455)		(18,310)		(18,130)
Total net assets		12,669		11,429		10,556
Equity
Share capital		6,061		5,980		5,980
Share premium		24,245		21,376		21,376
Merger reserve		992		992		992
Retained deficit		(18,629)		(16,919)		(17,792)
Total equity		12,669		11,429		10,556

Consolidated cash flow statement
for the 26 weeks ended 30 June 2019 (unaudited)

	26 weeks to				26 weeks to			52 weeks ended
	30 June				1 July			30 December
	2019				2018			2018
	£'000				£'000			£'000
Operating activities
Cash generated from operations	(460)				(2,259)			389
Corporation tax paid	-				-			26
Net cash inflow from operating activities	(460)				(2,259)			415
Investing activities
Proceeds from sale of property, plant and equipment	523				4,150			4,150
Purchase of property, plant and equipment	(227)				(670)			(1,261)
Net cash flows used in investing activities	296				3,481			2,889
Financing activities
Net proceeds from issues of ordinary shares	2,950				-			-
Bank loan repayment	(4,565)				-			(583)
Interest paid	(176)				(125)			(252)
Net cash flows used in financing activities	(1,791)				(125)			(835)
Net increase in cash and cash equivalents	(1,955)				1,097			2,469
Cash and cash equivalents at beginning of the period	4,312				1,843			1,843
Cash and cash equivalents as at 30 June 2019	2,357				2,940			4,312

Notes to the condensed financial statements
for the 26 weeks ended 30 June 2019 (unaudited)

1      General information

Tasty plc ("Tasty") is a public limited company incorporated in the United Kingdom under the Companies Act (registration number 05826464).  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 AIM Market of the London Stock Exchange ("AIM").  Copies of this Interim Report and the Annual Report and Financial Statements may be obtained from the above address or on the investor relation's 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 30 June 2019 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 30 December 2018 does not constitute the full statutory accounts for that period. The Annual Report and Financial Statements for 2018 have been filed with the Registrar of Companies. The Independent Auditors' Report on the Annual Report and Financial Statements for 2018 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 19% (2018 - 19%).

 

4      Loss per share

				26 weeks to		26 weeks to		52 weeks
				30 June		1 July		30 December
				2019		2018		2018
				Pence		Pence		Pence
	Loss per ordinary share			(1.17)		(17.88)		(19.42)

The basic and diluted loss per share figures are calculated by dividing the net loss 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.

Loss per share is calculated using the numbers shown below:

				26 weeks to		26 weeks to		52 weeks
				30 June		1 July		30 December
				2019		2018		2018
				number '000		number '000		number  '000
	Weighted average ordinary shares (basic)			72,732		59,795		59,795
				26 weeks to		26 weeks to		52 weeks
				30 June		1 July		30 December
				2019		2018		2018
				£'000		£'000		£'000
	Loss for the financial period			(854)		(10,694)		(11,613)

 

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

	26 weeks to		26 weeks to		52 weeks  ended
	30 June		1 July		30 December
	2019		2018		2018
	£'000		£'000		£'000
Loss before tax	(861)		(11,550)		(11,817)
Finance income	(4)		-		-
Finance expense	180		125		252
Share based payment charge	17		65		111
Depreciation and impairment	768		12,115		13,016
Profit from sale of property plant and equipment	27		(1,942)		(2,132)
Amortisation of intangible assets	1		1		3
Onerous lease provision movement	-		1,687		1,687
(Increase) / decrease in inventories	72		112		107
(Increase) / decrease in trade and other receivables	(1,549)		(199)		1,231
Increase / (decrease) in trade and other payables	889		(2,673)		(2,069)
Net cash inflow from operating activities	(460)		(2,259)		389

 

END

 

 

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