Preliminary Results

RNS Number : 3587G

Tasty PLC

17 March 2020

Tasty plc

("Tasty" or the "Company")

Preliminary results for the 52 weeks ended 29 December 2019

Financial Highlights:

· Revenue down 6% to £44.6m (2018: £47.3m), mainly due to closure of sites.

· The Company generated adjusted EBITDA of £1.1m (2018: £1.6m).

· The Company sold three sites and sub-let two sites in 2019. Post year end, the Company sold one further site.

· The Group continues to review the estate but no further disposals in 2020 are currently planned.

· Post year end, outstanding bank debt of £1.7m was repaid in full in January 2020.

· £2.9m net cash (2018: £2.1m net debt ).

Enquiries:

Tasty plc Tel: 020 7637 1166

Jonny Plant, Chief Executive

Cenkos Securities (Nominated advisor and broker) Tel: 020 7397 8900

Mark Connelly / Katy Birkin

This announcement contains the preliminary results of the Company which are an extract of the fully audited accounts.

Chairman's statement

I am pleased to be reporting on the Group's annual results for the 52 week period ended 29 December 2019 and the comparative 52 week period ended 30 December 2018. The Group currently operates 56 restaurants, comprising 5 dim t and 51 Wildwood restaurants.

In May 2019 we successfully raised £3.25m through an institutional placing and open offer to existing shareholders and since the start of 2019, we have also received gross proceeds of £2.6m through asset sales. As announced in January 2020, following the sale of our dim t More London site, we were able to fully pay off our bank loan (£1.7m was outstanding at year-end (2018: £6.4m)). With no bank debt the Group is now in a strong position to invest free cash-flow back into the business.

2019 continued to be a challenging year for the casual dining and retail markets and the Group's priority was to achieve financial stability and stem the sales decline. This included; optimising the current estate, turning around underperforming sites, improving the customer experience and investing in our people. Over the next year we plan to refurbish a few sites and refresh some of the older restaurants in the estate. All underperforming sites remain under close review but there are currently no plans to dispose of any existing restaurants or to open any new sites in 2020.

In the first half of 2019 the Group experienced particularly difficult trading conditions which were impacted by the uncertainty of Brexit and the political environment. Since the General Election in December to date, we have witnessed a recovery in consumer confidence. Trading over the Christmas period was positive and ensured that we delivered an adjusted EBITDA in line with our expectations. Notwithstanding the Coronavirus (COVID-19) outbreak, the start of 2020 has continued to be encouraging. However, the full impact of Brexit remains unclear. The likely upward pressure on food cost and the reduction in the supply of labour and the availability of certain food items all remain a concern to the business. Whilst we have measures in place to reduce the anticipated impact of Brexit or COVID-19 issues, it is impossible to mitigate all potential risks but we are constantly monitoring the situation Despite all the challenges we faced during 2019 we were cash generative and achieved our expected results.

With our continued focus on enhancing the food offering and customer experience, we believe that both brands will remain relevant and we should be well placed to take advantage of any opportunities in the casual dining market as consumer confidence improves.

Once again, I would like to recognise our great team and thank them for their continued effort and support and for helping us to overcome the issues encountered throughout these testing times.

Dividend

The Board does not propose to recommend a dividend (2018: £nil).

Keith Lassman

Chairman

16 March 2020

Strategic report for the 52 weeks ended 29 December 2019

Tasty operates two concepts in the casual dining market: Wildwood and dim t.

Wildwood
Aimed at a wide market, our 'Pizza, Pasta, Grill' restaurant remains the Group's main focus. Our sites are primarily based on the high street. However, we have a number of leisure, retail and tourist locations which trade well, highlighting the broad appeal and scalability of the offering. Located nationally mainly outside of London, Wildwood is currently trading from 51 restaurants.

dim t

Our pan-Asian restaurant now trades from 5 sites, serving a wide range of dishes including, dim sum, noodles, soup and curry.

Business review

We continue to make progress on our key strategies and have undertaken various initiatives to, optimise the estate, improve the food and drink offering, customer engagement and our people development.

Optimise the estate

We have addressed optimising the estate in two key ways. Firstly, we have disposed of sites which were underperforming, not trading or have attracted considerable premiums. The following sites have been disposed of since 31 December 2018:

Cobham Wildwood

On 8 January 2019 this unit was sold as a going concern for a consideration of £0.35m to the landlord of the site.

South Woodford Wildwood

On 31 January 2019 this was assigned for a total consideration of £0.15m.

Tunbridge Wells

This site was previously sub-let to Cau which went into administration and was sub-let to a new tenant on 6 March 2019 for a consideration of £0.05m.

Worcester Park Wildwood

On 28 March 2019 this site was assigned for a total consideration of £0.035m.

More London Dim t

On 7 January 2020 this site was assigned for a total consideration of £2m.

In addition, in 2019, we sub-let a site in Highgate which had operated as a test brand called "Centuno" but which had been closed prior to the sale.

The Group continues to review the estate and will consider any appropriate offers but no further disposals in 2020 are currently planned.

In addition to site disposals we engaged with our landlord's for assistance. Our collaborative approach has been well received and generally we have found landlords to be supportive and cooperative. We have been successful in achieving rent reductions and lease concessions on a number of sites.

Food and drink proposition

We remain focused on offering a wide choice to our customers. We continue to offer seasonal specials and are constantly looking at ways of making the menu more exciting and broadening its appeal, including the launch of specific vegetarian, vegan and non-gluten menus. Since trialling the "Beyond Meat" plant-based vegan burger as part of our specials' menu it has now been introduced onto our main menu.

In Wildwood we offered four turkey-based dishes including a roast dinner which proved to be popular and we believe a better choice and more competitively priced Christmas menu than our competitors was one of the key reasons we performed well over the period.

Customer engagement

Our aspiration is to be the high street brand with highest standard of customer service in the casual dining sector. We have been using a number of tools to help us measure this including; mystery diner reports, online customer feedback and Trip Advisor scores. We use data from all these reviews to improve the overall customer experience and enjoyment.

People Development

We know that our people are integral to our business and we are committed to providing an engaging, open and honest environment for our teams. We believe in nurturing talent and are committed to training. We are running our apprenticeship scheme which was launched in 2017 and expect 25 to 30 learners to achieve a pass or distinction this year. Some of the modules run as part of the apprenticeship scheme have been extended to the wider workforce and this scheme we will allow us to develop our best employees and engender a loyal and motivated group who will be able to push the business forward.

In 2019 we granted share options to a number of employees, which we believe will improve retention and over the longer-term will allow our employees to financially benefit from their hard work and the growth of the business.

Current trading and Outlook for the coming year

Following a positive Christmas trading period, the start to 2020 has generally been encouraging. The Group is planning a modest investment in the existing estate and the infrastructure of the business to sustain its recovery. We continue to monitor closely the rapidly evolving COVID-19 outbreak with its attendant risks to the business and will make further announcements as and when appropriate. Despite the challenging and uncertain trading environment we hope 2020 will be a year in which trading will continue to improve.

Highlighted Items

The Group recognises a number of charges in the accounts which arise under accounting rules which have no cash impact. These charges include share-based payments and impairments to property, plant and equipment. The above items are included under 'highlighted items' on the statement of comprehensive income and further detailed in Note 5. These items, due to their nature, will fluctuate significantly year on year and are, therefore, highlighted to give more detail on the Group's trading performance.

Full year results and key performance indicators

The Directors continue to use a number of performance metrics to manage the business but, as with most businesses, the focus on the income statement at the top level is on sales, EBITDA before highlighted items and operating loss before highlighted items compared to previous year. All key performance indicators that adjust for highlighted items do not constitute Statutory or GAAP measures.

	52 weeks ended 29 December 2019	52 weeks ended 30 December 2018
Revenue	£44.57m	£47.28m
Cost of sales	(£43.92m)	(£46.55m)
Gross profit	£0.65m	£0.73m
Other income	£0.24m	£0.18m
Administrative costs	(£1.40m)	(£1.28m)
EBITDA before highlighted items	£1.06m	£1.58m
Operating profit before highlighted items	(£0.50m)	(£0.37m)

These figures are reconciled to the Statement of Comprehensive Income below.

Revenue for the period decreased 6% on last year to £44.6m (2018: £47.3m). This was mainly due to the closure of sites and partly due to like-for-like decline. EBITDA before highlighted items was £1.1m (2018: £1.6m). Pressure on food cost and labour inflation continued and impacted gross margins. Some of this was improved by rent negotiations.

Impairment provision for the year was £nil (2018: £11.1m) with an onerous lease provision release of £0.6m (2018: charge of £1.7m).

The Group has disposed of a number of properties during the period resulting in a loss on disposal, as included in highlighted items, of £0.04m (2018: profit £2.1m).

Operating loss before highlighted items increased in the period to a loss of £0.5m (2018: loss of £0.4m) and the Group achieved a pre-tax loss (after highlighted items) of £0.3m (2018: loss of £11.8m).

Net cash inflow for the period before financing was £2.3m (2018: inflow £3.3m). This is generated from operations and proceeds from the sale of property. Net cash flows generated from operations were £2.2m (2018: £0.4m).

As at 29 December 2019, the Company had an outstanding bank loan of £1.7m (2018: £6.4m). At 29 December 2019 cash at bank was £4.6m (2018: £4.3m). Net cash at the balance sheet date was £2.9m (2018: net debt £2.1m). The outstanding bank debt of £1.7m was repaid in full in January 2020.

The table below gives additional information to shareholders on key performance indicators

	52 weeks ended 29December 2019	52 weeks ended 30 December 2018
	£'000	£'000
EBITDA before highlighted items	1,055	1,581
Depreciation and amortisation	(1,557)	(1,948)
Operating loss before highlighted items	(502)	(367)
Highlighted items	450	(11,198)
Operating loss	(52)	(11,565)

Principal risks and uncertainties

The Directors have the primary responsibility for identifying the principal risks the business faces and for developing appropriate policies to manage those risks.

Risks and uncertainties

Mitigation

COVID-19

Uncertainty and impact of COVID-19 could impact staff, restaurants and supply.

Adapting to the ever-changing situation

Government guidelines will be followed.

Outbreak protocol for staff, restaurants and suppliers.

Working with the suppliers to ensure back-up supplies available and stock piling where necessary in central kitchen.

Cash preservation is of primary concern and we will be working with suppliers to review credit terms, manage variable costs and review restaurant opening times. We are now constantly reviewing any capital expenditure commitments.

Market Conditions and Brexit

Economic uncertainty and impact of Brexit could reduce customer confidence / spending.

The uncertainty of the impact of Brexit has increased the inflationary pressure on food cost. Whilst we work closely with our suppliers and on assured supply and price negotiation, we are also constantly reviewing ways to keep food cost increases minimal

We are now debt free. We also ensure that headroom on cashflow is maintained.

Competition

The casual dining market faces new competition on a regular basis.

To mitigate this risk, we continue to invest and renew our offer whilst maintaining accessibility without compromising quality or the customer experience.

We constantly review marketing offers to ensure that we remain relevant to our consumers and ahead of the competition.

We review performance and seek new opportunities.

People

Loss of key staff and inability to hire the right people in competitive labour market.

We have continued to focus on selection, induction, training and retention of our employees. The Group has made significant improvements in its training programme including the apprenticeship scheme.

The Group offers a competitive remuneration package which includes sales and gross profit-based bonuses and share options.

Food standards and safety

Failing to meet safety standards

The Group engages in regular internal and external compliance audits to ensure all sites are complying with regulations. Job specific training that covers relevant regulations is provided to all staff on induction and whenever else necessary. Online reporting systems are utilised on a daily basis to gather relevant information on compliance.

Regular review of latest Government guidelines and best practice regarding allergens.

The Group's activities are subject to a wide range of laws and regulations and we seek to comply with legislation and best practice at all times.

Supply Chain

A major failure of key supplier or distributor could cause significant business interruption.

The Group monitors suppliers closely and if there was failure of a key supplier, we have contingency plans in place to minimise disruption.

On behalf of the Board.

Daniel Jonathan Plant

Joint Chief Executive Officer

16 March 2020

Report of the directors for the 52 weeks ended 29 December 2019

The Directors present their report together with the audited financial statements for the 52 weeks ended 29 December 2019 (comparative period 52 weeks to 30 December 2018).

Results and dividends

The consolidated statement of comprehensive income is set out below and shows the loss for the period.

The Directors do not recommend the payment of a dividend (2018: £nil).

Post balance sheet events

Post balance sheet events are set out in Note 34.

Future developments

The outlook and future developments are set out in the Chairman's statement and the Strategic Report.

Principal activities

The Group's principal activity is the operation of restaurants.

Directors

The Directors of the Group during the period were as follows:

Executive

Daniel Jonathan Plant

Samuel Kaye

Mayuri Vachhani (appointed 26 September 2019)

Non-Executive

Keith Lassman

Adam Kaye

Directors' interest in shares

	As at 29 December 2019		As at 30 December 2018
Director	Ordinary shares of 0.1p each	%	Ordinary shares of 10p each	%

Daniel Jonathan Plant	7,091,902	5.0%	4,154,579	6.9%
Samuel Kaye	20,750,588	14.7%	10,750,588	18.0%
Keith Lassman	806,599	0.6%	333,185	0.6%
Adam Kaye	12,236,560	8.7%	7,236,560	12.1%
Mayuri Vachhani (appointed 26 September 2019)	-	-	-	-

As at 16 March 2020 the shares held were as above.

Share options

Director

Number

Exercise price

Grant

date

Vesting period

Expiry date

Mayuri Vachhani

750,000

£0.03

17/10/2019

3 years

17/10/2029

At the end of year certain of the Directors had interests in 'A' and 'B' shares in Took Us a Long Time Limited, the subsidiary company. The benefit of holding these shares is considered by the Board to be similar to the benefit of holding an EMI option.

Director	Class of share	Number	Exercise price	Price condition	Exercisable date	Expiry date

Samuel Kaye	A	500,000	£1.00	£1.50	31/03/2014	30/03/2024
Daniel Jonathan Plant	A	500,000	£1.00	£1.50	31/03/2014	30/03/2024
Daniel Jonathan Plant	B	600,000	£1.20	£2.00	30/04/2015	29/04/2025

In March 2020 to simplify the Group and the tax structure, the above shares were bought back by Took Us a Long Time Limited and cancelled at a nominal cost of £15.65 and in aggregate a cost of £28.37..

Employees

Applications from disabled persons are given full consideration providing the disability does not seriously affect the performance of their duties. Such persons, once employed, are given appropriate training and equal opportunities.

The Group takes a positive view toward employee communication and has established systems for ensuring employees are informed of developments and that they are consulted regularly.

Environment

Working alongside our primary waste contractor we have achieved an average of 45% recycling across both brands with minimal waste going to landfill.

An energy efficiency programme is currently being implemented which is aimed at reducing electricity and gas usage in both brands. By educating our employees on the impact they can have we hope to inspire change in both the business and at home.

Our waste oil is collected and converted into Bio Diesel and Bio Gas to ensure that none is wasted.

The Group has discontinued the use of plastic straws and are currently working with the delivery partner to convert all our delivery packaging to biodegradable.

Donations

The Group made no charitable or political donations in the period (2018: none).

Financial Instruments

Details of the use of financial instruments and the principal risks faced by the Group are contained in Note 28 to the financial statements.

Going concern

The Board have a reasonable expectation that the Group has adequate resources to continue in operational existence for a period of at least twelve months since the Board approved these financial statements. Accordingly, a going concern basis of accounting is adopted in preparing the annual financial statements. The Board's assessment of going concern can be found in Note 1(c) to the financial statements.

Auditors

All of the current Directors have taken all reasonable steps necessary to make themselves aware of any information needed by the Group's auditors for the purposes of their audit and to establish that the auditors are aware of that information. The Directors are not aware of any relevant audit information of which the auditors are unaware.

Haysmacintyre LLP were appointed as the auditors and have expressed their willingness to continue in office and a resolution to re-appoint them will be proposed at the annual general meeting.

On behalf of the Board.

Daniel Jonathan Plant
Joint Chief Executive Officer
16 March 2020

Statement of directors' responsibilities

The Directors are responsible for preparing the strategic report, the annual report and the financial statements in accordance with applicable law and regulations.

Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors have elected to prepare the Group and Company financial statements in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union. Under company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Group and the Company and of the profit or loss of the Group for that period. The Directors are also required to prepare financial statements in accordance with the rules of the London Stock Exchange for companies trading securities on the Alternative Investment Market.

In preparing these financial statements, the Directors are required to:

· select suitable accounting policies and then apply them consistently;

· make judgements and accounting estimates that are reasonable and prudent;

· state whether they have been prepared in accordance with IFRSs as adopted by the European Union, subject to any material departures disclosed and explained in the financial statements;

· prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the financial statements comply with the requirements of the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Website publication

The Directors are responsible for ensuring the annual report and the financial statements are made available on a website. Financial statements are published on the Company's website (www.dimt.co.uk) in accordance with legislation in the United Kingdom governing the preparation and dissemination of financial statements, which may vary from legislation in other jurisdictions. The maintenance and integrity of the Company's website is the responsibility of the Directors. The Directors' responsibility also extends to the ongoing integrity of the financial statements contained therein.

Consolidated statement of comprehensive income

for the 52 weeks ended 29 December 2019

		Note	52 weeks ended 29 December 2019	52 weeks ended 30 December 2018
			£'000	£'000

Revenue		3	44,573	47,278

Cost of sales			(43,921)	(46,547)

Gross profit			652	731

Other income		3	245	177

Total operating expenses			(949)	(12,473)

Operating loss before highlighted items			(502)	(367)
Highlighted items		5	450	(11,198)

Operating loss		4	(52)	(11,565)

Finance income		6	8	-
Finance expense		6	(222)	(252)


Loss before income tax			(266)	(11,817)

Income tax		9	-	204

Loss and total comprehensive loss for the period and attributable to owners of the parent			(266)	(11,613)
Loss per share attributable to the ordinary equity owners of the parent
Basic and diluted	10		(0.23p)	(19.42p)

The notes below form part of these financial statements.

Consolidated statement of changes in equity

for the 52 weeks ended 29 December 2019

	Share capital	Share premium	Merger reserve	Retained (loss)/ profit	Total
	£'000	£'000	£'000	£'000	£'000

Balance at 31 December 2017	5,980	21,376	992	(6,290)	22,058

Issue of ordinary shares	-	-	-	-	-
Cost of placing of ordinary shares	-	-	-	-	-
Total comprehensive loss for the period	-	-	-	(11,613)	(11,613)
Share based payments	-	-	-	111	111


Balance at 30 December 2018	5,980	21,376	992	(17,792)	10,556

Issue of ordinary shares	81	3,170	-	-	3,251
Cost of placing of ordinary shares	-	(295)	-	-	(295)
Total comprehensive loss for the period	-	-	-	(266)	(266)
Share based payments	-	-	-	40	40

Balance at 29 December 2019	6,061	24,251	992	(18,018)	13,286

The notes below form part of these financial statements.

Company statement of changes in equity

for the 52 weeks ended 29 December 2019

	Share capital	Share premium	Retained profit	Total
	£'000	£'000	£'000	£'000

Balance at 31 December 2017	5,980	21,376	(5,297)	22,059

Issue of ordinary shares	-	-	-	-
Cost of placing of ordinary shares	-	-	-	-
Total comprehensive loss for the period	-	-	(11,640)	(11,640)
Share based payments	-	-	111	111


Balance at 30 December 2018	5,980	21,376	(16,826)	10,530

Issue of ordinary shares	81	3,170	-	3,251
Cost of placing of ordinary shares	-	(295)	-	(295)
Total comprehensive loss for the period	-	-	(3,056)	(3,056)
Share based payments	-	-	40	40


Balance at 29 December 2019	6,061	24,251	(19,842)	10,470

The notes below form part of these financial statements.

Consolidated balance sheet

At 29 December 2019

		29 December 2019	30 December 2018
	Note	£'000	£'000
Non-current assets
Intangible assets	12	352	352
Property, plant and equipment	13	14,570	16,554
Pre-paid operating lease charges	14	573	507
Other non-current assets	17	197	283
		15,692	17,696

Current assets
Inventories	16	2,650	2,548
Trade and other receivables	17	3,148	3,538
Pre-paid operating lease charges	14	50	87
Cash and cash equivalents		4,570	4,312
		10,418	10,485

Assets held for sale	33	800	505

Total assets		26,910	28,686

Current liabilities
Trade and other payables	18	(7,834)	(7,045)
Borrowings	21	(800)	(2,867)
		(8,634)	(9,912)

Non-current liabilities
Provisions	19	(2,783)	(3,347)
Lease incentives		(1,227)	(1,266)
Long-term borrowings	21	(852)	(3,550)
Other Payables	28	(128)	(55)
		(4,990)	(8,218)

Total liabilities		(13,624)	(18,130)

Total net assets		13,286	10,556

Equity
Share capital	22	6,061	5,980
Share premium	23	24,251	21,376
Merger reserve	23	992	992
Retained deficit	23	(18,018)	(17,792)
Total equity		13,286	10,556

The financial statements were approved by the Board of Directors of the Company and authorised for issue on 16 March 2020 and signed on their behalf by Daniel Jonathan Plant.

The notes below form part of these financial statements.

Company balance sheet

At 29 December 2019

	Note	29 December 2019	30 December 2018
		£'000	£'000

Non-current assets
Investments	15	3,170	3,130
Other non-current assets	17	7,300	7,400
Total net assets		10,470	10,530


Equity
Share capital	22	6,061	5,980
Share premium	23	24,251	21,376
Retained deficit	23	(19,842)	(16,826)
Total equity		10,470	10,530

The Parent Company, Tasty plc, has taken advantage of the exemption in s 408 of the Companies Act 2006 not to publish its own income statement. The Parent Company made a loss of £3.1m (2018 - loss of £11.6m) for the period.

The financial statements were approved by the board of directors of the Company and authorised for issue on 16 March 2020 and signed on their behalf by Daniel Jonathan Plant.

The notes below form part of these financial statements.

Consolidated cash flow statement
For the 52 weeks ended 29 December 2019

	Note	52 weeks ended 29 December 2019	52 weeks ended 30 December 2018
		£'000	£'000

Operating activities
Cash generated from operations	30	2,226	389
Corporation tax received		-	26
Net cash inflow from operating activities		2,226	415


Investing activities
Proceeds from sale of property, plant and equipment		508	4,150
Purchase of property, plant and equipment		(453)	(1,261)
Interest received		8	-
Net cash inflow from investing activities		63	2,889


Financing activities
Net proceeds from issues of ordinary shares		2,956	-
Bank loan repayment	31	(4,765)	(583)
Interest paid		(222)	(252)
Net cash used in from financing activities		(2,031)	(835)


Net increase in cash and cash equivalents		258	2,469

Cash and cash equivalents brought forward		4,312	1,843


Cash and cash equivalents as at the end of the period		4,570	4,312

The notes below form part of these financial statements.

Company cash flow statement

For the 52 weeks ended 29 December 2019

	Note	52 weeks ended 29 December 2019	52 weeks ended 30 December 2018
		£'000		£'000


Operating activities
Cash generated from operations		-		-
Corporation tax paid		-		-
Net cash outflow from operating activities		-		-

Investing activities		-		-
Purchase of property, plant and equipment		-		-
Net cash in flow / (used in) investing activities		-		-

Financing activities
Net proceeds from issues of ordinary shares		-		-
Net cash flows used in financing activities		-		-


Net increase in cash and cash equivalents		-		-
Cash and cash equivalents brought forward		-		-

Cash and cash equivalents as at the end of the period		-		-

The notes below form part of these financial statements.

Notes

forming part of the financial statements for the 52 weeks ended 29 December 2019

1 Accounting policies

Tasty plc is a public listed company incorporated and domiciled in England and Wales. The Company's ordinary shares are quoted on AIM. Its registered address is 32 Charlotte Street, London, WC1T 2NQ.

(a) Statement of compliance

These financial statements of the Group and Company have been prepared in accordance with International Financial Reporting Standards, International Accounting Standards and Interpretations (collectively IFRS) issued by the International Accounting Standards Board (IASB) as adopted by European Union ("adopted IFRSs"). These financial statements have also been prepared in accordance with those parts of the Companies Act 2006 that are relevant to companies that prepare their financial statements in accordance with IFRS.

(b) Basis of preparation

The financial statements cover the 52 week period ended 29 December 2019, with a comparative period of the 52 week period ended 30 December 2018. The financial statements are presented in sterling, rounded to the nearest thousand and are prepared on the historical cost basis. Accounting policies of the Company are consistent with the policies adopted by the Group.

As at 29 December 2019, the Group had net assets of £13.3m (2018: £10.6m). The Group meets its day-to-day working capital requirements through the generation of operating cashflow and equity raise. The Group's principal sources of funding are:

· Issue of ordinary share capital in the Company on the Alternative Investment Market.

· Placing and open offer in May 2019 raised £3.25m gross

· The term loan, of which £6.4m was outstanding at the start of year, was reduced to £1.65m. This was fully repaid in January 2020.

The Group is currently monitoring the COVID-19 situation and more information can be found in the Principal Risks and Uncertainties section above. The Board regulary reviews cashflow and sensitivity forecasts and they have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. Thus, the going concern basis of accounting is adopted in preparing the annual financial statements.

(d) Standard amendments and interpretations in issue but not yet effective

The new standards impacting the Group, both of which will be adopted in the next annual financial statements for the period ended 27 December 2020 are:

· IAS 1 and IAS 8

· IFRS 16 'Leases'

Definition of Material - Amendments to IAS 1 and IAS 8 (effective 1 January 2020)

The IASB has made amendments to IAS 1, 'Presentation of Financial Statements', and IAS 8, 'Accounting Policies, Changes in Accounting Estimates and Errors', which use a consistent definition of materiality throughout International Financial Reporting Standards and the Conceptual Framework for Financial Reporting, to clarify when information is material and incorporate some of the guidance in IAS 1 about immaterial information.

In particular, the amendments clarify:

a) That the reference to obscuring information addresses situations in which the effect is similar to omitting or misstating that information, and that an entity assesses materiality in the context of the financial statements as a whole, and;

b) The meaning of 'primary users of general purpose financial statements' to whom those financial statements are directed, by defining them as 'existing and potential investors, lenders and other creditors' that must rely on general purpose financial statements for much of the financial information they need.

The amendment is not expected to have a material impact on the Group.

IFRS 16 'Leases'

IFRS 16 replaces IAS 17 and completes the IASB's long-running project to overhaul lease accounting. Leases will be recorded on the statement of financial position in the form of a right-of-use asset and a lease liability. IFRS 16 is mandatorily effective from reporting periods beginning on or after 1 January 2019. The Group will therefore adopt IFRS 16 for the reporting period ended 27 December 2020.

The Group has chosen the modified retrospective application of IFRS 16 in accordance with IFRS 16:C5(b). Consequently, the Group will not restate the comparative information.

In contrast to lessee accounting, IFRS 16 substantially carries forward the lessor accounting requirements in IAS 17.

Impact of the new definition of a lease:

The change in definition of a lease mainly relates to the concept of control. IFRS 16 distinguishes between leases and service contracts on the basis of whether the use of an identified asset is controlled by the customer. Control is considered to exist if the customer has:

• The right to obtain substantially all of the economic benefits from the use of an identified asset; and

• The right to direct the use of that asset.

The Group will apply the definition of a lease and related guidance set out in IFRS 16 to all lease contracts entered into or modified on or after 1 January 2019 (whether it is a lessor or a lessee in the lease contract).

Impact on Lessee Accounting

IFRS 16 will change how the Group accounts for leases in which the Group is a lessee previously classified as operating leases under IAS 17, which were off-balance sheet.

On initial application of IFRS 16, for all leases (except for short-term or low value assets), the Group will:

a) Recognise right-of-use assets and lease liabilities in the consolidated statement of financial position, initially measured at the present value of the future lease payments;

b) Recognise depreciation of right-of-use assets and interest on lease liabilities in the consolidated statement of profit or loss;

Lease incentives (e.g. rent-free period) will be recognised as part of the measurement of the right-of-use assets whereas under IAS 17 they resulted in the recognition of a lease liability incentive, amortised as a reduction of rental expenses on a straight-line basis.

As at 29 December 2019, the Group has non-cancellable operating lease commitments of £83.6m.

The Group will initially recognise a right-of-use asset of £56.5m and a corresponding lease liability of £57.7m in respect of all these leases on 30 December 2019.

Prepaid rent on these leases amounting to £1.1m which is currently recognised within prepayments will be reclassified and the amount factored into the measurement of the right to use assets on 30 December 2019.

As a result of implementing IFRS 16, it is expected that operating profit will increase by £1.5m in period to 27 December 2020. This is based on the rental charge of £5.5m which is no longer expensed, being offset with expected depreciation of £4.0m recognised on the right-of-use asset. Interest unwinding on the lease liability of £2.8m will also be recognised as a finance cost, reducing the overall profit before tax by £1.3m.

Impact on Lessor Accounting

Under IFRS 16, a lessor continues to classify leases as either finance leases or operating leases and account for those two types of leases differently. However, IFRS 16 has changed and expanded the disclosures required, in particular regarding how a lessor manages the risks arising from its residual interest in leased assets.

Based on an analysis of the Group's operating leases as at 29 December 2019 on the basis of the facts and circumstances that exist at that date, the Directors of the Group have assessed that the impact of this change will not have an impact on the amounts recognised in the Group's consolidated financial statements.

The Group does not expect any other standards issued by the IASB, but not yet effective, to have a material impact on the group.

(e) Basis of consolidation

The consolidated financial statements incorporate the results of the Company and its subsidiary, Took Us A Long Time Limited. The accounting period of the subsidiary is co-terminous with that of the parent undertaking.

(f) Revenue

The Group's revenue is derived from goods and services provided to the customers with revenue recognised at the point in time when control of the goods has transferred to the customer. Control passes to the customers at the point at which food and drinks are provided and the Group has a present right for payment.

(g) Other income

Included in Other income is the rental income from operating leases. The cost of these leases is included within the cost of sales.

(h) Retirement benefits: Defined contribution schemes

Contributions to defined contribution pension schemes are charged to the consolidated income statement in the period to which they relate.

(i) Share based payments

The Group operates a number of equity-settled share-based payment schemes under which share options are granted to certain employees. Options granted to employees are measured at fair value at the date of grant and the fair value is charged to the statement of comprehensive income over the vesting period. Fair value is measured using the Black-Scholes or binomial model. In determining fair value, no account is taken of any vesting conditions, other than conditions linked to the price of the Group's shares (market-based conditions).

No expense is recognised for awards that do not ultimately vest, except for awards where vesting is conditional upon a market condition, which are treated as vesting irrespective of whether or not the market condition is satisfied, provided all other conditions are satisfied. The fair value determined at the grant date is then expensed on a straight line over the vesting period, based on the directors' best estimate of the number of shares that will eventually vest and adjusted for the effect of non-market based vesting conditions. The movement in the cumulative expense since the previous balance sheet date is recognised in the Income Statement, with the corresponding movement taken to equity.

Where the terms and conditions of options are modified before they vest or where options have been cancelled and reissued with modified terms, the increase in the fair value of the options, measured immediately before and after the modification, is also charged to the income statement over the remaining vesting period.

The grant by the parent Company of options over its equity instruments to the employees of its subsidiary in the Group is treated as a capital contribution. The fair value of employee services received, measured by reference to the grant date fair value, is recognised over the vesting period as an increase to investment in subsidiary undertakings, with a corresponding credit to equity.

(j) Borrowing costs

Borrowing costs are recognised in the income statement in the period in which they are incurred.

(k) Externally acquired intangible assets

Externally acquired intangible assets are initially recognised at cost and subsequently amortised on a straight-line basis over their useful economic lives. The amortisation expense is included within the cost of sales line in the consolidated income statement.

The significant intangibles recognised by the Group and their useful economic lives are as follows:-

	Intangible asset	Useful economic life
	Trade marks	10 years

(l) Property, plant and equipment

Items of property, plant and equipment are stated at cost less accumulated depreciation (see below) and impairment losses.

Depreciation is provided to write off the cost or valuation, less estimated residual values, of all fixed assets, evenly over their expected useful lives and it is calculated at the following rates:-

	Leasehold improvements	over the period of the lease
	Fixtures, fittings and equipment	10% per annum straight line
	Computers	5% per annum straight line

Restaurants under construction are included in Property, plant and equipment. No depreciation is provided on restaurants under construction until the asset is available for use.

All property, plant and equipment is reviewed for impairment in accordance with IAS36 Impairment of Assets, when there are indications that the carrying value may not be recoverable.

Property, plant and equipment are subject to impairment tests whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. Where the carrying value of an asset or a cash generating unit (CGU) exceeds its recoverable amount (i.e. the higher of value in use and fair value less costs to dispose of the asset), the asset is written down accordingly. The Group view each restaurant as a separate CGU. Value in use is calculated using cash flows over the remaining life of the lease for the CGU discounted at 10% (2018: 10%), being the rate considered to reflect the risks associated with the CGUs. Cash flows are determined using a one year forecasting period after which cash flows are extrapolated at a 3% growth rate.

Impairment charges are recognised in the statement of comprehensive income.

(m) Non-current assets held for sale

Non-current assets are classified as held for sale when the Board plans to sell the assets and no significant changes to this plan are expected. The assets must be available for immediate sale, an active programme to find a buyer must be underway and be expected to be concluded within 12 months with the asset being marketed at a reasonable price in relation to the fair value of the asset.

Non-current assets classified as held for sale are measured at the lower of their carrying amount immediately prior to being classified as held for sale and fair value less costs of disposal. Following their classification as held for sale, non-current assets are not depreciated.

(n) Onerous contracts

Provisions for onerous contracts are recognised when the expected benefits to be derived by the Group from a contract are lower than the unavoidable cost of meeting its obligation under the contract. Estimates have been made with respect to the time to exit and associated costs, for example lease incentives which may be required to be paid as part of the sublet process. Judgement is required by management when making such estimates.

(o) Loans and receivables

These assets arise principally from the provision of goods and services to customers (e.g. trade receivables), but also incorporate other types of financial assets where the objective is to hold these assets in order to collect contractual cash flows and the contractual cash flows are solely payments of principal and interest. They are initially recognised at fair value plus transaction costs that are directly attributable to their acquisition or issue, and are subsequently carried at amortised cost using the effective interest rate method, less provision for impairment.

Impairment provisions for trade receivables are recognised based on the simplified approach within IFRS 9 using a provision matrix in the determination of the lifetime expected credit losses. During this process the probability of the non-payment of the trade receivables is assessed. This probability is then multiplied by the amount of the expected loss arising from default to determine the lifetime expected credit loss for the trade receivables. For trade receivables, which are reported net, such provisions are recorded in a separate provision account with the loss being recognised in the consolidated statement of comprehensive income. On confirmation that the trade receivable will not be collectable, the gross carrying value of the asset is written off against the associated provision.

Impairment provisions for receivables from related parties and loans to related parties are recognised based on a forward looking expected credit loss model. The methodology used to determine the amount of the provision is based on whether there has been a significant increase in credit risk since initial recognition of the financial asset. For those where the credit risk has not increased significantly since initial recognition of the financial asset, twelve month expected credit losses along with gross interest income are recognised. For those for which credit risk has increased significantly, lifetime expected credit losses along with the gross interest income are recognised. For those that are determined to be credit impaired, lifetime expected credit losses along with interest income on a net basis are recognised.

The Group's loans and receivables comprise trade and other receivables and cash and cash equivalents in the balance sheet. The Company's loans and receivables comprise only inter-Company receivables. Cash and cash equivalents include cash in hand and deposits held with banks.

(p) Apprenticeship funding and levy

The payments made under the levy represent a prepayment for training services expected to be received and is recognised as an asset until the receipt of the service. When the training service is received, an appropriate expense is recognised. The grant income is deferred until apprentices receive training under the rule of the scheme.

(q) Financial liabilities

Financial liabilities include trade payables, accrued lease charges, other short-term monetary liabilities, which are initially recognised at fair value and subsequently carried at amortised cost.

Bank borrowings are initially recognised at fair value and are subsequently measured at amortised costs using the effective interest method. Interest expense includes initial transaction costs and any premium payable on redemption as well as any interest payable while the liability is outstanding.

(r) Inventories

Raw materials and consumables

Inventories are stated at the lower of cost and net realisable value. Cost comprises all costs of purchase and other costs incurred in bringing the inventories to their present location and condition. Net realisable value is based on estimated selling price less costs incurred up to the point of sale.

Crockery and utensils (Smallwares)

Smallware inventories are held at cost which is determined by reference to the quantity in issue to each restaurant. Smallware stock relates to small value items which have short life spans relating to kitchen and bar equipment. These items are recorded under stock as they are utilised in providing food and beverage to customers.

(s) Leased assets

Leases are classified as finance leases whenever the terms of the lease are such that they transfer substantially all the risks and rewards of ownership to the Group. All other leases are classified as operating leases. The Group currently has no finance leases. Assets leased under operating leases are not recorded on the balance sheet.

Fixed payments made under operating leases are recognised in the income statement on a straight-line basis over the term of the lease. Contingent rent, such as turnover related rents, are recognised in the income statement as incurred. Incentives to enter into an operating lease are spread on a straight-line basis over the lease term as a reduction in rental expense.

Payments made to acquire operating leases are treated as pre-paid lease expenses and are amortised over the term of the lease.

(t) Taxation

Tax on the profit and loss for the year comprises current and deferred tax. Tax is recognised in the profit and loss except to the extent that it relates to items recognised directly in equity, in which case it is recognised in equity. Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates enacted or substantively enacted at the balance sheet date, and any adjustment to tax payable in respect of previous years.

Deferred tax assets and liabilities are recognised where the carrying amount of an asset or liability in the balance sheet differs from its tax base, except for differences arising on:

· The initial recognition of goodwill

· The initial recognition of an asset or liability in a transaction which is not a business combination and at the time of the transaction affects neither accounting or taxable profit.

Recognition of deferred tax assets is restricted to those instances where it is probable that taxable profit will be available against which the difference can be utilised.

Deferred tax is provided using the balance sheet liability method, providing for all temporary differences between the carrying amounts of assets and liabilities recorded for reporting purposes and the amounts used for tax purposes.

The amount of the asset or liability is determined using tax rates that have been enacted or substantively enacted by the reporting date and are expected to apply when the deferred tax liabilities or assets are settled or recovered. Deferred tax balances are not discounted.

(u) Goodwill

Goodwill represents the difference between the fair value of consideration paid and the carrying value of the assets and liabilities acquired. Goodwill arose on acquisition of a group of leases.

Goodwill is stated as originally calculated less any accumulated provision for impairment. Goodwill is allocated to individual CGUs, where each CGU is a restaurant, and is subject to an impairment review at each reporting date.

(v) Investments

Investments in subsidiaries are included in the Company's Statement of Financial Position at cost less provision for impairment.

(w) Share capital

The Company's ordinary shares are classified as equity instruments.

(x) Operating profit

Operating profit is stated after all expenses, but before financial income or expenses. Highlighted items are items of income or expense which because of their nature and the events giving rise to them, are not directly related to the delivery of the Company's restaurant service to its patrons and merit separate presentation to allow shareholders to understand better the elements of financial performance in the year, so as to facilitate comparison with prior periods and to assess better trends in financial performance.

2 Critical accounting estimates and judgements

The Group makes certain estimates and judgements that affect the application of policies and reported amounts. Estimates and judgements are continually evaluated based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. In the future, actual experience may differ from these estimates and assumptions. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial period are discussed below.

(a) Share based payments (Note 27)

The Group operates equity share-based remuneration schemes for employees. Employee services received and the corresponding increase in equity are measured by reference to the fair value of the equity instruments at the date of grant, excluding the impact of any non-market vesting conditions. The fair value of share options is estimated by using valuation models, such as Black Scholes or binomial on the date of grant based on certain assumptions. Those assumptions are described in note 27 and include, among others, the dividend growth rate, expected volatility, expected life of the options (for options with market conditions) and number of options expected to vest.

(b) Accruals (Note 18)

In order to provide for all valid liabilities which exist at the balance sheet date, the Group is required to accrue for certain costs or expenses which have not been invoiced and therefore the amount of which cannot be known with certainty. Such accruals are based on management's best estimate and past experience. Delayed billing in some significant expense categories such as utility costs can lead to sizeable levels of accruals. The total value of accruals as at the balance sheet date is set out in note 18.

Property, plant and equipment are amortised or depreciated over their useful lives. Useful lives are based on management estimates of the period that the assets will generate revenue, which are periodically reviewed for continued appropriateness.

(d) Impairment reviews (Note 13)

In carrying out an impairment review in accordance with IAS 36 it has been necessary to make estimates and judgements regarding the future performance and cash flows generated by individual trading units which cannot be known with certainty. Past performance is often used as a guide in estimating future performance, or comparison with similar sites. Where the circumstances surrounding a particular trading unit have changed then forecasting future performance becomes extremely judgemental and for these reasons the actual impairment required in the future may differ from the charge made in the financial statements. When assessing a CGU recoverable amount, the value in use calculation uses a discounted cash flow model which is sensitive to the discount rate and the growth rate used after taking into account potential sale value.

(e) Intercompany provision

In carrying out a review of intercompany loan in accordance with IRFS9 it has been necessary to make estimates and judgements regarding the repayment of the loan by its subsidiary to the Company. A sensitivity analysis has been performed on the repayment of loan value.

(f) Onerous contract provision (Note 19)

The amount provided is based on expected future rental obligations, legal costs, associated exit costs and potential lease incentives which may be required to be paid as part of the sub-let/surrender process. Significant judgements are used in calculating these provisions and changes to these assumptions or future events could cause the value of these provisions to change.

(g) Crockery and utensils (Smallwares)

The cost of replenishing smallwares is expensed directly through the income statement. Smallwares is recognised at historic cost and tested for impairment on an annual basis.

3 Revenue, other income and segmental analysis

The Group's activities, comprehensive income, assets and liabilities are wholly attributable to one operating segment (operating restaurants) and arises solely in one geographical segment (United Kingdom). All the Group's revenue is recognised at a point in time.

An analysis of the Group's total revenue is as follows:

	52 weeks ended 29 December 2019	52 weeks ended 30 December 2018
	£'000	£'000

Sale of goods	44,573	47,278

	44,573	47,278

An analysis of the Group's other income is as follows:

	52 weeks ended 29 December 2019	52 weeks ended 30 December 2018
	£'000	£'000

Sub-let site rental income	245	177

	245	177

4 Operating loss

	52 weeks ended 29 December 2019	52 weeks ended 30 December 2018
This has been arrived at after charging	£'000	£'000

Staff costs	18,195	19,056
Share based payments	40	111
Operating lease rentals	5,496	5,858
Amortisation of intangible assets	3	3
Depreciation	1,507	1,861
Amortisation of prepaid operating leases	50	87
Onerous lease provision	(564)	1,687
Restructure and consultancy	31	457
Impairment of lease premiums	-	897
Impairment of Goodwill	-	115
Impairment of property, plant and equipment	-	10,063
Loss/(profit) on disposal of property, plant and equipment	43	(2,132)
Auditor remuneration:
Audit fee - Parent Company	8	10
- Group financial statements	26	30
- Subsidiary undertaking	8	10
Other services - Taxation compliance	6	11

5 Highlighted items - charged to operating expenses

	52 weeks ended 29 December 2019	52 weeks ended 30 December 2018
	£'000	£'000

(Loss)/profit on disposal of property, plant and equipment	(43)	2,132
Onerous leases	564	(1,687)
Restructure and consultancy	(31)	(457)
Impairment of lease premiums	-	(897)
Impairment of Goodwill	-	(115)
Impairment of property, plant and equipment	-	(10,063)
Share based payments	(40)	(111)

	450	(11,198)

The above items have been highlighted to give more detail on items that are included in the consolidated statement of comprehensive income and which when adjusted shows a profit or loss that reflects the ongoing trade of the business.

6 Finance income and expense

	52 weeks ended 29 December 2019	52 weeks ended 30 December 2018
	£'000	£'000

Interest receivable	(8)	-
Interest payable	222	252

	214	252

7 Employees

	52 weeks ended 29 December 2019	52 weeks ended 30 December 2018
Staff costs (including Directors) consist of	£'000	£'000

Wages and salaries	16,637	17,493
Social security costs	1,313	1,415
Other pension costs	245	148
Equity settled share based payment expense	40	111

	18,235	19,167

The average number of persons, including Directors, employed by the Group during the period was 1,028 of which 1,006 were restaurant staff and 22 were administration staff, (2018 - 1,049 of which 1,030 were restaurant staff and 19 were administration staff).

No staff are employed by the Company (2018 - no staff).

Of the total staff costs £17.2m was classified as cost of sales (2018: £18.1m) and £1.0m as operating expenses (2018: £1.1m). Redundancy costs of £0.0m (2018: £0.2m) have been included as a cost of Restructure and Consultancy in Note 5.

8 Directors and key management personnel remuneration

Key management personnel identified as the Directors are those persons having authority and responsibility for planning, directing and controlling the activities of the Group, and represent the Directors of the Group.

	52 weeks ended 29 December 2019	52 weeks ended 30 December 2018
	£'000	£'000

Directors remuneration
Emoluments	70	252
Share based payments	17	70
Pensions	1	-
Social security costs	10	30

	98	352

	52 weeks ended 29 December 2019	52 weeks ended 30 December 2018
	£'000	£'000

Individual directors' emoluments
J Plant	30	120
S Kaye	-	55
T Cundy (resigned 13 March 2018)	-	27
A Kaye	-	20
K Lassman	8	30
M Vachhani (appointed 26 September 2019)	32	-
	70	252

In addition to the above, a pension contribution was provided to M Vachhani of £1,000 (2018: £nil).

Share based payments for the period that are attributable to the Directors are £17,000 (2018: £70,000).

Company
The Company paid no director emoluments during the year (2018: none).

9 Income tax expense

	52 weeks ended 29 December 2019	52 weeks ended 30 December 2018
	£'000	£'000
UK Corporation tax
Adjustment in respect to previous years	-	(48)
Total current tax	-	(48)

Deferred tax
Origination and reversal of temporary differences	-	252
Total deferred tax	-	252
Total income tax credit	-	204

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

	52 weeks ended 29 December 2019	52 weeks ended 30 December 2018
	£'000	£'000

Loss before tax	(266)	(11,817)

Tax on loss at the ordinary rate of corporation
tax in UK of 19% (2018 - 19%)	(51)	(2,245)

Effects of
Expenses not deductible for tax	23	21
Onerous lease provision not deductible for tax	56	168
Deferred tax not recognised	(336)	-
Adjustment in respect of previous years		(48)
Depreciation/impairment on ineligible fixed assets	308	1,900
Total tax charge	-	(204)

Changes to the UK corporation tax rates were substantively enacted as part of Finance Bill 2016 (on 6 September 2016). These include reductions to the main rate to reduce the rate to 17% from 1 April 2020.

In March 2020, the budget announced the intention to cancel the future reduction in corporation tax rate from 19% to 17%. This announcement constitutes a post year-end substantive enactment and therefore deferred taxes at the balance sheet date continue to be measured at the enacted tax rate of 17%. As the deferred tax balance is currently £nil there is no impact on the accounts going forward. The corporation tax rate will now remain at 19% after 1 April 2020.

10 Loss per share

	29 December 2019	30 December 2018
	Pence	Pence

Basic and diluted loss per ordinary share	(0.23)	(19.42)

	2019	2018
	Number '000	Number '000
Loss per share has been calculated using the numbers shown below:
Weighted average ordinary shares (basic)	113,379	59,795

	2019	2018
	£'000	£'000

Loss for the financial period	(266)	(11,613)

Due to the loss made in the year, all share options are anti dilutive. No share options would otherwise be considered dilutive (2018 - nil).

11 Dividend

No final dividend has been proposed by the Directors (2018 - £nil).

12 Intangibles

	Trademarks	Goodwill	Total
	£'000	£'000	£'000

At 31 December 2017	29	441	470

Impairments	-	(115)	(115)
Amortisation of trademarks	(3)	-	(3)


At 30 December 2018	26	326	352

Additions	3	-	3
Amortisation of trademarks	(3)	-	(3)

At 29 December 2019	26	326	352

The recoverable amount of goodwill has been determined on a value in use basis. This has been based on the performance of the units since they were acquired and management's forecasts, which assume the sites will perform at least as well as the market generally. The forecast cash flows cover a period of the committed lease length (or 10 years, if shorter), assuming a growth rate of 3% and are discounted at a rate of 10% (2018 - 10%). Management has performed sensitivity testing on all inputs to the model and noted no highly sensitive variables. Goodwill has been allocated to CGUs as follows;

		29 December 2019		30 December 2018
	'000		£'000

Shaftesbury Avenue	196		196
Cambridge	130		130

	326		326

13 Property, plant and equipment

	Leasehold improvements	Furniture fixtures and computer equipment	Assets in the course of construction	Total
	£'000	£'000	£'000	£'000
Cost
At 31 December 2017	41,231	10,946	47	52,224
Additions	863	398	-	1,261
Disposals	(1,187)	(470)	(47)	(1,704)
Reclassified as held for sale	(930)	(411)	-	(1,341)

At 30 December 2018	39,977	10,463	-	50,440

Additions	120	247	-	367
Disposals	(351)	(101)	-	(452)
Reclassified as held for sale	(1,085)	(502)	-	(1,587)

At 29 December 2019	38,661	10,107	-	48,768

Depreciation
At 31 December 2017	18,277	5,616	-	23,893
Provided for the period	1,070	791	-	1,861
Impairments	8,601	1,462	-	10,063
Disposals	(817)	(278)		(1,095)
Reclassified as held for sale	(581)	(255)	-	(836)

At 30 December 2018	26,550	7,336	-	33,886

Provided for the period	892	615	-	1,507
Disposals	(351)	(57)	-	(408)
Reclassified as held for sale	(417)	(370)	-	(787)

At 29 December 2019	26,674	7,524	-	34,198



Net book value
At 29 December 2019	11,987	2,583	-	14,570

At 30 December 2018	13,427	3,127	-	16,554

The total carrying value of the assets that have been impaired in the period is £nil (2018: £14.0m). These have been impaired to their value in use of £nil (2018: £3.0m).

The key judgements and estimates in the inputs in calculating the impairments are outlined in note 1(l).

A sensitivity analysis has been performed on each of the key assumptions noted with other variables held constant. Increasing the growth rate by 1% or decreasing the discount rate by 1% has no impact on current year impairment charge.

Assets held for sale accounted for a carrying value of £0.8m (2018: £1m carrying value impaired to value in use of £0.6m).

Company

The Company holds no property, plant and equipment.

14 Prepaid operating leases

	29 December 2019	30 December 2018
	£'000	£'000

Held within current assets	50	87
Held within non-current assets	573	507

	623	594

Prepaid operating leases represent lease premiums paid on the acquisition of sites, amortised evenly over the lease term.

15 Investments

						£'000
	Company
	At 31 December 2017					3,019
	Share based payment in respect of subsidiary					111

	At 30 December 2018					3,130

	Share based payment in respect of subsidiary					40

	At 29 December 2019					3,170

The Company's investments are wholly related to a 53% ordinary shareholding in Took Us a Long Time Limited, a company registered in England and Wales with registered offices at 32 Charlotte Street, London. Took Us a Long Time Limited is primarily engaged with the operation of restaurants.

Under IFRS any "non-Controlling Interest" must be recognised based on the ownership percentage, unless there is a separate agreement meaning the share of profits is allocated on another basis. In this instance, the nature of the shares held by other parties mean that the shareholders only receive profits when certain thresholds are met, and would never be liable for any of the losses. As the Group is currently loss making, no share of the losses should be allocated and therefore a "non-Controlling Interest" has not been shown.

16 Inventories

	29 December 2019	30 December 2018
	£'000		£'000

Raw materials and consumables	871		798
Crockery and utensils	1,779		1,750

	2,650		2,548

In the Directors' opinion there is no material difference between the replacement cost of stocks and the amounts stated above. Raw material and consumable inventory purchased and recognised as an expense in the period was £11.4m (2018: £12.2m).

17 Trade and other receivables

	29 December 2019	30 December 2018
	£'000	£'000

Trade receivables	267	240
Prepayments and other receivables	3,078	3,581

Total trade and other receivables	3,345	3,821

Less non-current portion (Deposits)	(197)	(283)

	3,148	3,538


Company
Amounts due from subsidiary	7,300	7,400

Total trade and other receivables	7,300	7,400

Classified as non-current	7,300	7,400

There has been an increase in the credit risk of this loan since it was advanced due to the deterioration in the market and the resulting impact on the performance of the trading company. The Company has previously made loans to the trading subsidiary of £28.5m (2018: £25.6m).

The Directors of the Company consider this loan to be classed as Stage 2 under the General Approach set out in IFRS 9. The Company has made provisions of £21.2m (2018: £18.2m) which represents the lifetime expected credit losses. In assessing the lifetime expected credit losses consideration has been given to a number of factors including internal forecasts of EBITDA, cashflow and the consolidated net asset value of the Group at the balance sheet date.

18 Trade and other payables

	29 December 2019	30 December 2018
	£'000		£'000

Trade payables	3,651		3,690
Taxations and social security	1,804		1,649
Accruals and deferred income	1,771		1,269
Other payables	736		492

	7,962		7,100

Included within trade payables are £0.10m (2018: £0.15m) due to related parties (note 29).

19 Provisions

	29 December 2019	30 December 2018
	£'000		£'000

At the beginning of the period	3,347		1,660
Movement in the period	(564)		1,687

At the end of the period	2,783		3,347

During the period an onerous leases provision of £0.6m was released (2018 - provision of £1.7m). This provision has been made against sites where projected future trading income is insufficient to cover the unavoidable costs under the lease. The provision is based on the expected cash out flows of these sites and the associated costs of exiting these leases and the time expected to sell.

20 Deferred tax

	29 December 2019	30 December 2018
	£'000		£'000

At the beginning of the period	-		(252)
Profit and loss credit/(charge)	-		252
	-		-


Accelerated capital allowances	-		-
Tax losses carried forward	-		-
At the end of the period	-		-

Due to the uncertainty of future profits, a deferred tax asset of £0.3m (2018: £0.9m) is not recognised in these financial statements.

21 Borrowings

	29 December 2019	30 December 2018
	£'000		£'000
Current
Secured bank borrowings	800		2,867
	800		2,867

Non-current
Secured bank borrowings	852		3,550
	852		3,550


	1,652		6,417


Maturity of secured bank borrowings
Due within one year	1,055		3,083
Due In more than one year but less than two years	669		927
Due In more than two years but less than five years	-		2,846
	1,724		6,856

Future interest payments	(72)		(439)

	1,652		6,417

During the year £4.8m was repaid to the bank and post year end the outstanding loan of £1.7m was paid in full in January 2020.

22 Share capital


	Number	Number	£'000
	Ordinary	Deferred
Called up and fully paid:

Ordinary shares at 0.1 pence	59,795,496	-	60
Deferred shares at 9.9 pence (as a result of sub-division	-	59,795,496	5,920

Ordinary shares issued at 0.1 pence	81,294,262	-	81

At 29 December 2019	141,089,758	-	6,061

Share Capital Reorganisation, placing and open offer

At start of the year the Group had 59,795,496 ordinary shares at 10 pence per share in issue.

On 1 May 2019 the Group sub-divided each existing ordinary share into one ordinary share of 0.1 pence each and one deferred share of 9.9 pence each. Following this, the Group issued 81,294,262 Ordinary shares through a placing and open offer at 4 pence, each at nominal value of 0.1 pence.

23 Reserves

Share capital comprises of the nominal value of the issued shares.

Share premium reserve is the amount subscribed in excess of the nominal value of shares net of issue costs.

Cumulative gains and losses recognised in the income statement are shown in the Retained deficit reserves, together with other items taken direct to equity.

The merger reserve arose in 2006 on the creation of the Group.

24 Capital commitments

At the balance sheet date the Group and the Company had no capital commitments which were contracted but not provided for (2018: £nil). Capital commitments relate to committed expenditure in respect of restaurants under construction.

25 Operating lease commitments

The total future value of minimum lease payments and receipts under non-cancellable operating leases are shown below. The receipts are from sub-tenants on contractual sub-leases, the net position represents the cash liability of the Group.

	29 December 2019	30 December 2018
	£'000	£'000

Within one year: payments	5,488	5,521
Within one year: receipts	(278)	(237)
	5,210	5,284

Within two to five years: payments	20,647	20,808
Within two to five years: receipts	(1,158)	(930)
	19,489	19,878

Over five years: payments	57,499	60,579
Over five years: receipts	(2,428)	(2,485)
	55,071	58,094

	79,770	83,256

26 Pensions

The Group made contributions of £1,000 (2018: £nil) to the personal pension plan of the Directors. During the year the Group made contributions to employee pensions of £0.2m (2018: £0.1m). As at 29 December 2019, contributions of £12,000 due in respect of the current reporting period had not been paid over to the schemes (2018: £13,000).

27 Share based payments

	Weighted average exercise price	Number
	(pence)	'000

At 31 December 2017	97.2	3,489

Lapsed	31.5	(440)
Cancelled	129.8	(166)


At 30 December 2018	105.4	2,883

Lapsed	70.1	(190)
Cancelled	131.2	(293)
Granted	4.1	4,525

At 29 December 2019	39.5	6,925

The exercise price of options outstanding at the end of the period ranged between 3p and 120p (2018 - 35p and 147p) and their weighted average remaining contractual life was 8.4 years (2018 - 6.3 years).

Of the total number of options outstanding at the end of period 6.3m (2018 - 2.1m) had vested and were exercisable at the end of the period with a weighted average exercise price of 31p.

The market price of the Company's ordinary shares as at 29 December 2019 was 2.7p and the range during the financial year was from 2.7p to 10.7p.

No option was exercised in 2019 (2018 £nil) and 4.5m were granted in 2019 as detailed below (2018 nil).

On 29 July 2019 options of 3.5m were granted at a grant price of 4.4p reflecting the opening share price. The options vest in three years and expire in 10 years. A charge of £61,000 will be recognised over the three years based on a volatility of 63.5% and risk rate of 0.5% using the Binomial method. The volatility is weighted on a four year basis and the risk free rate is based on risk free rate on the mid point between the vesting date and expiry.

On 17 October 2019 options of 1m were granted at a grant price of 3.3p reflecting the opening share price. The options vest in three years and expire in 10 years. A charge of £12,000 will be recognised over the three years based on a volatility of 61.6% and risk rate of 0.5% using the Binomial method. The volatility is weighted on a four year basis and the risk free rate is based on risk free rate on the mid point between the vesting date and expiry.

28 Financial instruments

In common with all other businesses, the Group is exposed to risks that arise from its use of financial instruments. This note describes the Group's objectives, policies and processes for managing those risks and the methods used to measure them. Further quantitative information in respect of these risks is presented throughout these financial statements.

The Group is exposed through its operations to the following financial risks:

· Credit risk

· Interest rate risk

· Liquidity risk

The Group does not have any material exposure to currency risk or other market price risk.

There have been no substantive changes in the Group's exposure to financial instrument risks, its objectives, policies and processes for managing those risks or the methods used to measure them from previous periods unless otherwise stated in this note.

Principal financial instruments

The principal financial instruments used by the Group, from which financial instrument risk arises, are as follows:-

· loans and borrowings

· trade receivables

· cash and cash equivalents

· trade and other payables

The Group's financial instruments apart from cash and cash equivalents are measured on an amortised cost basis. Due to the short-term nature of trade receivables and trade/ other payables, the carrying value approximates their fair value.

Financial assets	29 December 2019	30 December 2018
	£'000	£'000

Cash and cash equivalents	4,570	4,312
Trade and other receivables	464	523

Total financial assets	5,034	4,835


Financial liabilities (amortised cost)

Trade and other payables	4,387	4,182
Loans and borrowings	1,652	6,417

Total financial liabilities	6,039	10,599

Company - Financial assets (amortised cost)	29 December 2019	30 December 2018
	£'000		£'000

Intercompany loan	7,300		7,400

General objectives, policies and processes

The Board has overall responsibility for the determination of the Group's risk management objectives and policies.

The overall objective of the Board is to set policies that seek to reduce risk as far as possible without unduly affecting the Group's competitiveness and flexibility. Further details regarding these policies are set out below:

Credit risk

The Group's assets and liabilities are wholly attributable to one operating segment (operating restaurants) and arises solely in one geographical segment (United Kingdom).

Credit risk is the risk of the financial loss to the Group if a customer or a counterparty to a financial instrument fails to meet its contractual obligations. The Group is mainly exposed to credit risk from rebates from suppliers, sub-letting income and trade receivables.

Trade and other receivables are disclosed in note 17 and represent the maximum credit exposure for the Group.

The following table sets out the ageing of trade receivables:

	29 December 2019	30 December 2018
Ageing of receivables	£'000	£'000

<30 days	106	94
31-60 days	67	45
61-120 days	48	29
>120 days	46	72
	267	240

The Group's principal financial assets are cash and trade receivables. There is minimal credit risk associated with the Group's cash balances. Cash balances are all held with recognised financial institutions. Trade receivables arise in respect of rebates from a major supplier and therefore they are largely offset by trade payables. As such the net amounts receivable form an insignificant part of the Group's business model and therefore the credit risk associated with them is also insignificant to the Group as a whole.

The Company's principal financial assets are intercompany receivables. These balances arise due to the funds flow from the listed Company to the trading subsidiary and are repayable on demand. The credit risk arising from these assets are linked to the underlying trading performance of the trading subsidiary. See note 17 for further details on intercompany debt.

Liquidity risk

Liquidity risk arises from the Group's management of working capital. It is the risk that the Group will encounter difficulty in meeting its financial obligations as they fall due. The Group's policy is to ensure that it will always have sufficient cash to allow it to meet its liabilities when they become due. To achieve this aim, the Group seeks to maintain cash balances to meet its expected cash requirements as determined by regular cash flow forecasts prepared by management.

The following table sets out the contractual maturities (representing undiscounted contractual cash-flows) of financial liabilities:

	Up to 3 months	Between 3 and 12 months	Between 1 and 2 years	Between 2 and 5 years	Over 5 years
	£'000	£'000	£'000	£'000	£'000

Trade & other payables	4,259	-	56	-	72

Loan and other borrowings	417	638	669	-	-

As at 29 December 2019	4,676	638	725	-	72

	Up to 3 months	Between 3 and 12 months	Between 1 and 2 years	Between 2 and 3 years	Over 5 years
	£'000	£'000	£'000	£'000	£'000

Trade & other payables	4,127	-	-	-	55

Loan and other borrowings	1,800	1,282	927	2,846	-

As at 30 December 2018	5,927	1,282	927	2,846	55

Non-current other payables are sub-let site rent deposits.

Interest rate risk

The Group seeks to minimise interest costs by regularly reviewing cash balances.

Interest rate risk arises from the Group's use of interest bearing loans linked to LIBOR. The Group is exposed to cash flow interest rate risk from long term borrowings at variable rate. The Board considers the exposure to the interest rate risk to be acceptable.

Surplus funds are invested in interest bearing, instant access bank accounts.

Loans and borrowings

During the year the Group had a loan facility with Barclays Bank Plc. Of the £7 million term loan £1.7m was outstanding at the year-end. In January 2020 the £1.7m was repaid to the bank.

Capital disclosures

The Group's capital is made up of ordinary share capital, deferred share capital, share premium, merger reserve and retained deficit totalling £13.2m (2018: £10.5m).

The Group's objective when maintaining capital is to safeguard the entity's ability to continue as a going concern, so that it can continue to provide returns for shareholders and benefits for other stakeholders.

The Group manages its capital structure and makes adjustments to it in the light of strategic plans. In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital to shareholders or issue new shares.

29 Related party transactions

The Directors are considered to be the key management personnel. Details of directors' remuneration are shown in Note 8.

The Group pays rent and associated insurance to a number of companies considered related parties by virtue of the interests held by the Directors in such companies. The Group also reimburses expenses incurred by such companies on behalf of the Group. The Group receives income from related parties for fees in relation to consultancy services offered.

	52 weeks ended 29 December 2019	52 weeks ended 30 December 2018
	£'000	£'000
Rent, insurance and legal services
- Kropifko Properties Ltd	(52)	(167)
- KLP Partnership	(83)	(84)
- ECH Properties Ltd	(79)	(75)
- Proper Proper T Ltd	(52)	(105)
- Super Hero Properties	(135)	(69)
- Benja Properties Ltd	(154)	(154)
- Howard Kennedy LLP	(18)	(5)
Expenses reimbursed

Balance due to related parties	97	152

The rent paid to related parties are considered to be a reasonable reflection of the market rate for the properties.

30 Reconciliation of loss before tax to net cash inflow from operating activities

	52 weeks ended 29 December 2019	52 weeks ended 30 December 2018
	£'000	£'000
Group
Loss before tax	(266)	(11,817)
Finance income	(8)	-
Finance expense	222	252
Share based payment charge	40	111
Depreciation and impairment	1,557	13,016
Profit from sale of property plant and equipment	43	(2,132)
Amortisation of intangible assets	3	3
Onerous lease provision movement	(564)	1,687
Decrease / (increase) in inventories	(102)	107
Decrease / (increase) in trade and other receivables	477	1,231
(Decrease)/ Increase in trade and other payables	824	(2,069)

	2,226	389

31 Reconciliation of financing activity

	Non-current loans and borrowings (note 21)	Current loans and borrowings (note 21)	Total
	£'000	£'000	£'000

At 30 December 2018	3,550	2,867	6,417

Borrowings becoming current in 2019	2,067	(2,067)	-
(non-cash movement)

Loan repayment	(4,765)	-	(4,765)

As at 29 December 2019	852	800	1,652

32 Effects of changes in accounting policies

The Group adopted IFRS 9 and IFRS 15 in the previous period with a transition date of 1 January 2018.

Due to the nature of trade, IFRS 15 did not have an impact on the recognition of revenue. This accounting policy is outlined in note 1(f).

IFRS 9 applies to classification and measurement of financial assets and financial liabilities, impairment provisioning and hedge accounting. IFRS 9 replaces IAS 39 Financial Instrument: Recognition and Measurement and introduces a single model that has initially only two classification categories rather than the multiple classification and measurement models in the previous standard. The new models are amortised at cost and fair value. For both the Group and Company there has been no change to the measurement of financial instruments on adoption of IFRS 9. See the accounting policy outlined in Note 1(n).

33 Assets held for sale

At year end the Group had exchanged contracts for the sale of dim t More London. The completion was subject to completion of conditions which were met post year-end (see note 34). The assets of More London were treated as assets held for sale.

The following major classes of assets have been classified as held for sale on the consolidated balance sheet.

	29 December 2019	30 December 2018
	£'000		£'000

Leasehold improvements	668		350
Furniture, fixtures and computer equipment	132		155

Total assets held for sale	800		505

The assets held for sale at 29 December 2020 related to More London dim t and sold for a gross consideration of £2m.

34 Post Balance Sheet Events

On 7 January 2020 dim t More London site was assigned for a gross consideration of £2m and on 8 January 2020 the Group repaid the outstanding bank loan of £1.7m.

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

END

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