Final Results

RNS Number : 7782K

Fulham Shore PLC (The)

12 July 2017

 



The Fulham Shore plc

("Fulham Shore", the "Company" or "Group")

Final Results

The Directors of Fulham Shore are pleased to announce the Company's audited results for the year ended 26 March 2017.

Highlights

•           Revenues for the year ended 26 March 2017 of £41,274,000 (2016: £29,251,000)

•           Headline EBITDA for the year ended 26 March 2017 of £7,118,000 (2016: £5,232,000)

•           Headline Operating Profit for the year ended 26 March 2017 of £4,670,000 (2016: £3,280,000)

•           Operating Profit for the year ended 26 March 2017 of £1,278,000 (2016: £507,000)

•           Profit after taxation for the year ended 26 March 2017 of £969,000 (2016: £76,000)

•           Net debt as at 26 March 2017 of £5,909,000 (27 March 2016: £3,283,000)

•           Opened 13 new Franco Manca pizzeria and 3 new The Real Greek during the year ended 26 March 2017 (2016: 7 Franco Manca pizzeria and 1 The Real Greek)

•           Launched click and collect takeaway service in both Franco Manca and The Real Greek

•           Since the year end:

o  the opening of a further 6 Franco Manca restaurants in the UK;

o  the opening of the first franchised Franco Manca pizzeria in Salina; and

o  the opening of a further 2 The Real Greek restaurants.

Contact:

The Fulham Shore plc	Telephone: [phone]
David Page	www.fulhamshore.com
Allenby Capital Limited	Telephone: [phone]
Nick Naylor / Jeremy Porter / James Reeve
Hudson Sandler - Financial PR	[e-mail]
Alex Brennan / Lucy Wollam	Telephone: [phone]

THE FULHAM SHORE PLC

CHAIRMAN'S STATEMENT

Introduction

Fulham Shore delivered a continued strong performance in the financial year ended 26 March 2017 with further growth across both of the Group's key brands. As a result, we are pleased to report a 41.1% increase in revenue to £41.3m, a 36.0% increase in Headline EBITDA to £7.1m and a 170.4% increase in profit before taxation to £1.1m.

We see the financial success of this year as a sound base upon which to build the expansion of Franco Manca, The Real Greek and the Group over the coming years.

Strategic vision and progress

Fulham Shore was established in 2012 to discover, develop and expand one or more restaurant concepts with significant growth potential in the dynamic UK dining out market.

To date we have identified and are developing two great restaurant brands. The first is Franco Manca, which was started in Brixton, London in 2009 by Giuseppe Mascoli. This brand has experienced strong growth since it was acquired by the Group in 2015 and we are now expanding outside London by opening and looking for new sites in cities such as Bristol, Oxford, Cambridge and Edinburgh.

The second brand that has great prospects is The Real Greek. As we expand outside London, these new The Real Greek restaurants are performing as well if not better than a number of their London siblings.

Both of these brands are very popular with customers and their food receives critical and social media acclaim. Both brands have scalable business models that combine great quality, high volumes and good value price points (typically £9 to £15 per head).

The Group's strategy is aimed at the long-term development of these brands and, by achieving their nationwide potential, we aim to deliver long term, sustainable returns for our shareholders.

The UK restaurant market

I have been in the restaurant industry since 1976 and, during that time, the UK 'eating out-of-home' market has grown and continues to grow significantly. Nabil Mankarious, our Managing Director, has been operating UK restaurants since 1986, so we have both witnessed the expansion of the 'eating out-of-home' market and the UK restaurant industry.

Recent years have seen unprecedented amounts of capital invested in the UK restaurant sector and, in recent months, more restaurant space has appeared on the market than for many a year. This is largely a function of larger businesses trying to sell poor performing locations, newly created developments and administrators selling sites for broken companies.

Restaurant supply and demand often have a fractious relationship and, however quickly demand for eating out grows, there will always be a risk that restaurant supply may sometimes grow faster, either nationally or locally. In addition, we are entering a difficult forecasting period due to Brexit. Against this backdrop, some restaurant businesses will make the grade and others will not. We believe that operators with "me-too" offerings, over-rented sites, tails of unprofitable sites, dated menus, too much debt, poor concepts and unincentivised staff (or all of the above) will struggle.

However, I am confident that Fulham Shore is well placed as a dynamic operator with strong brands and a good portfolio of sites. We believe that our businesses have significant growth potential across the UK underpinned, first and foremost, by the quality and value of their customer offerings. As a result, and despite the challenging backdrop, we are confident that the Group will continue to perform well in the fast-growing casual dining market.

Franco Manca - growth

Since acquiring Franco Manca in 2015, we have more than trebled the number of our pizzeria in the UK from 12 to 38 (32 at the year-end). This has resulted in growing to serving over 60,000 pizzas per week, up from 25,000 just over two years ago.

Core to the success and appeal of the Franco Manca brand is its continued emphasis on ingredients with proven provenance. We continue to source from the best UK and Italian producers and purchasing organic ingredients wherever possible. It is more important than ever to know your suppliers personally in these uncertain times and we pride ourselves on such relationships.

Franco Manca further strengthened its ties with Italy by joining its founder, Giuseppe Mascoli, in opening a seasonal Franco Manca pizzeria by the sea, located on the island of Salina, north of Sicily, since the year end.

Franco Manca's growth to date has primarily been in London where we have focused on establishing the positive reputation of this young brand's business. We have been building Franco Manca's awareness by expanding in London 'villages' (e.g. in Richmond, Hackney and Bermondsey) but we also opened new restaurants in close proximity to established Franco Manca pizzeria, thereby strengthening the brand and giving customers their own local Franco Manca. Whilst this can have a near term impact on sales in the original pizzeria, we are confident that the increased brand recognition and the business the new restaurants generate will benefit overall sales in the longer term.

We know from past experience that sales at the original pizzeria gravitate back to original levels after a period of time and this is demonstrated by the continued strong performances of the 12 Franco Manca pizzeria that the Group originally acquired in 2015.

In London, where the quality of our sourdough pizzas and great value prices are well known, our new pizzeria are busy straight away. However, as we open in other towns and cities throughout the UK, we expect that sales are more likely to build to capacity over the first three or four years of each restaurant's life as the Franco Manca brand becomes better known regionally.

We are encouraged by our expansion outside of London so far, in particular the openings in central Brighton and Reading, which are serving more customers per week than our average London pizzeria. This gives us confidence that the Franco Manca concept will continue to grow and flourish outside of the capital.

The Real Greek - growth

The Real Greek has delivered steady growth over recent years, generating good profits to support both its own expansion and that of the Group. The Real Greek presents an exciting opportunity for Fulham Shore as it shapes and defines the market for Greek food: it has little direct competition, serving delicious, good value sharing dishes and enjoying a very loyal customer base.

The brand's good performance and the availability of good sites encouraged us to open three new restaurants in the last year (including our first, smaller, Greek on the Street concept) which was more than we had originally planned. As a result, as at the year-end we operated 12 The Real Greek restaurants, with a further two opening since the year end, taking the total to 14.

During the year, we opened The Real Greek in three towns outside of London in Southampton, Bournemouth and Reading. We are encouraged by their performances so far. Our recent opening in Bournemouth, combining a great location, a beautiful restaurant with a large outside terrace and all a short walk from the sea, deserves special mention as it recorded an exceptional 3,000 customers in its first week.

On-line

We continue to see growth in the sales of take out, delivery and ordering on-line. Both The Real Greek and Franco Manca offer these services to our customers. 'Click and collect', where customers order on-line and then collect their order themselves from the restaurant, is proving particularly popular at the moment.

Investment

We continue to invest in our central functions, teams and infrastructure to support the long term growth potential of the Group. We will continue to add to the Franco Manca support team structure and, as we approach and pass 50 pizzeria, we are increasing the use of central commissaries to bring further efficiencies to the business and consistency.

We have seen excellent results from our new The Real Greek openings and we are looking to step up our opening programme from March 2019 onwards. We will, as we have at Franco Manca, bolster The Real Greek's central team over the next 18 months to support this increased pace of growth.

People and team

One of the Group's greatest attributes is our fantastic team of people across the business who bring amazing passion, skill and personality to our brands. I would like to thank each of my colleagues for their hard work during the year.

At every stage of the Group's development we have encouraged employees at all levels, from Directors to restaurant staff, to participate as shareholders by gifting shares and granting share options. We feel this employee ownership approach is crucial to supporting and developing a strong culture that is at the heart of a growing and successful restaurant business.

Current trading and outlook

Both Franco Manca and The Real Greek have performed well over the last year. We believe we will see this continuing, underpinned by great ambience, food quality and value of their customer offerings. We will be reviewing the progress of our third business, which is a single franchise of the Bukowski Grill brand in Soho, over the next few months.

We believe that both of our key brands have significant further growth potential. We have a pipeline of locations where we would like to open either or both The Real Greek and/or a Franco Manca. We anticipate opening approximately 15 new locations in the current financial year.

However, much of this will depend on our ability to secure sites that meet our return on capital criteria. This is critical to our success and we will not open new sites just to chase expansion numbers. We believe it is far better to wait for the right sites at the right rents than to chase short term targets.

Trading during the current financial year has so far remained in line with our expectations. However, there are many uncertainties out there: another General Election would be unhelpful, terrorist incidents have always reduced London public confidence (and therefore restaurant visits) and the long-term Brexit impact is unknown; it is, however, already affecting the availability of skilled European restaurant staff. In addition, food costs are currently on the increase and there is some evidence of reducing consumer expenditure.

Despite this, the UK dining out market continues to grow and as a nimble and agile operator with great restaurant brands we are confident of another year of good progress.

THE FULHAM SHORE PLC

FINANCIAL REVIEW

Fulham Shore performed strongly in the year ended 26 March 2017, summarised in the table below:

	Year  ended  26 March  2017	Year  ended  27 March  2016	Change
	£m	£m	%
Revenue	41.3	29.2	+41.1%
Headline EBITDA	7.1	5.2	+36.0%
Headline operating profit	4.7	3.3	+42.4%
Operating profit	1.3	0.5	+152.7%
Profit before taxation	1.1	0.4	+170.4%
Profit for the year	1.0	0.1
Diluted earnings per share	0.2p	0.0p
Headline diluted earnings per share	0.7p	0.4p	+50.8%
Cash flow from operating activities	10.3	3.7	176.3%
Development capital expenditure	12.4	7.1	+75.5%
Net Debt	5.9	3.3	+80.0%
Number of restaurants operated	No.	No.
Franco Manca	32	19	+68.4%
The Real Greek	12	9	+33.3%
Bukowski	1	1	-
	45	29	+55.2%

Total Group revenue grew by 41.1%, driven mainly by new openings within the UK during the year. We opened 3 The Real Greek and 13 Franco Manca pizzeria, taking the total restaurants operated by the Group to 45 (2016: 29) at year end.

Group Headline EBITDA for the year was £7.1m, an increase of 36.0% on the prior year while operating profit grew 152.7% to £1.3m. During the year, the Group invested in a broader management team in Franco Manca to support the opening program. With our new openings, we have invested over £1.9m (2016: £0.9m) in pre-opening costs.

Group operating profit for the year was £1.3m, up from £0.5m. Finance costs have increased 53.4% to £0.1m as the Group drew down on its revolving credit facilities to support the increased opening program for both Franco Manca and The Real Greek.

The Group's tax rate has reduced significantly to 15.3% of profit before tax due to our work on capital allowances on the capital expenditure over the past two years. This is expected to return to normal levels in the coming year.

Our diluted earnings per share has increased from 0.0p to 0.2p while Headline diluted earnings per share has increased by 50.8% to 0.7p.

Cost Inflation

During the year, the weakness of Sterling against the Euro and the US Dollar following the Brexit vote, has put pressure on food cost inflation. Where possible we have benefited from additional volume discounts due to our significant opening program which has helped to mitigate some of the cost pressures.

We also saw the implementation of the government's National Living Wage for over 25 year old employees at the beginning of the financial year. However all our businesses have chosen to treat all staff members the same irrespective of age.

Our other two material cost items are rent and utility costs. Rental inflation continues to increase modestly. Utility cost inflation continues to be volatile as wholesale cost of energy has been impacted by the movement of sterling and global economic adjustments.

Cash flows and balance sheets

The Group's cash flow from operating activities has grown 176.3% to £10.3m (2016: £3.7m).

We invested £12.4m (2016: £7.1m) in development capital including investment in IT systems to deliver the online Click and Collect takeaway service in both Franco Manca and The Real Greek.

Resultant net debt from our activities at 26 March 2017 was £5.9m (2016: £3.3m).

At the year end, we took advantage of short term supplier trading credit facilities as we had several restaurants in build around year end. These are expected to reverse in the coming year.

Financing

Following our year end, the Group has secured an amended revolving credit facility with our bankers, HSBC Bank PLC, increasing the facilities to £14.25m and extending for a term of four years. At the same time our overdraft facilities were increased to £0.75m. The new facilities are on similar terms as our previous facilities and, alongside internally generated cash flow, will support our existing planned opening programme for the next three years.

People

During the year, the Group's operations were entirely within the UK. With our opening program, the Group created over 350 new jobs during the year. We continue to invest in our staff through training, incentives and personal development.

Principal risks and uncertainties

The Directors consider the following to be the principal risks faced by the Group:

Economic conditions

The Group's performance depends to a large degree on the economic conditions and consumer confidence in the UK. Over recent months, the UK economy has seen reducing levels of unemployment but weaker consumer spending. However, there continue to be rapid changes to the UK economy, with the result of the EU Referendum creating considerable political and economic uncertainty. The Group's existing restaurants offer an exceptional customer value experience which the Directors believe positions the business well in dealing with continued volatility in the UK economy.

Development programme

The Group's development programme is dependent on securing the requisite number of new properties. The UK restaurant property market is competitive. To mitigate these issues, the Group has an experienced property team concentrating on securing new sites for the Group.

Supply chain

The Group focuses on the freshness and quality of the produce used in its restaurants. It is exposed to potential supply chain disruptions due to the delay or losses of inventory in transit. The Group seeks to mitigate this risk through effective supplier selection and an appropriate back-up supply chain.

Employees

The Group's performance depends largely on its management team and its restaurant teams. The inability to recruit people with the right experience and skills could adversely affect the Group's results. The result of the EU Referendum has created considerable uncertainty of immigration status of EU nationals. To mitigate these issues the Group has invested in its human resources teams and has implemented a number of incentive schemes designed to retain key individuals.

Competition

The Group operates in a competitive and fragmented market which regularly sees new concepts come to the market. However, the Directors believe that the strength of the existing restaurant brands, value offer and constant strive towards delivering the best product and service will help the business to mitigate competitive risk.

Investment programme

The Group's investment programme is dependent on securing suitable acquisition targets.

Cyber security

The Group has introduced online click and collect service during the year which relies on online systems that may experience cyber security failure leading to loss of revenue or reputation loss. The Group utilises robust supplier selection processes and third party reviews and testing on a regular basis to identify weaknesses and improve on existing protection and processes.

Risks are formally reviewed by the Board and appropriate processes put in place to monitor and mitigate them.

Financial risk management

The Board regularly reviews the financial requirements of the Group and the risks associated therewith. The Group does not use complicated financial instruments, and where financial instruments are used it is for reducing interest rate risk. The Group does not trade in financial instruments. Group operations are primarily financed from equity funds raised, bank borrowings and retained earnings. In addition to the financial instruments described above, the Group also has other financial instruments such as receivables, trade payables and accruals that arise directly from the Group's operations. Further information is provided in note 15 to the financial statements.

Key performance indicators

The Board receives a range of management information delivered in a timely fashion. The principal measures of progress, both financial and non-financial, that are reviewed on a regular basis to monitor the development of the Company and the Group are shown in the table at the beginning of this section.

THE FULHAM SHORE PLC

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

for the year ended 26 March 2017

		Year  ended  26 March  2017	Year  ended  27 March  2016
	Notes	£'000	£'000
Revenue	1	41,274	29,251
Cost of sales		(23,182)	(15,970)
Gross profit		18,092	13,281
Administrative expenses		(13,422)	(10,001)
Headline operating profit		4,670	3,280
Share based payments		(631)	(639)
Pre-opening costs		(1,914)	(908)
Amortisation of brand		(821)	(821)
Exceptional costs - cost of acquisition	23	(26)	(405)
Operating profit	2	1,278	507
Finance income		1	4
Finance costs	4	(135)	(88)
Profit before taxation		1,144	423
Income tax expense	5	(175)	(347)
Profit for the year		969	76
Profit for the period attributable to:
Owners of the company		947	56
Non-controlling interests		22	20
		969	76
Profit per share
Basic	6	0.2p	0.0p
Diluted	6	0.2p	0.0p
Headline Basic	6	0.7p	0.5p
Headline Diluted	6	0.7p	0.4p

There were no other comprehensive income items.

All operating gains and losses relate to continuing activities.

THE FULHAM SHORE PLC

CONSOLIDATED AND COMPANY BALANCE SHEETS

26 March 2017

		Group		Parent company
	Notes	26 March  2017  £'000	27 March  2016  £'000	26 March  2017  £'000	27 March  2016  £'000
Non-current assets
Intangible assets	7	27,374	28,135	-	-
Property, plant and equipment	8	27,306	16,733	227	11
Investments in subsidiaries	9	-	-	43,011	42,579
Trade and other receivables	11	947	934	7,974	4,324
Deferred tax assets	16	1,406	894	1,238	825
		57,033	46,696	52,450	47,739
Current assets
Inventories	10	1,052	687	-	-
Trade and other receivables	11	2,602	1,448	184	119
Cash and cash equivalents	12	271	197	-	-
		3,925	2,332	184	119
Total assets		60,958	49,028	52,634	47,858
Current liabilities
Trade and other payables	13	(13,332)	(6,165)	(1,011)	(732)
Income tax payable		(533)	(630)	-	-
Borrowings	14	(180)	(570)	(12)	(200)
		(14,045)	(7,365)	(1,023)	(932)
Net current liabilities		(10,120)	(5,033)	(839)	(813)
Non-current liabilities
Borrowings	14	(6,000)	(2,910)	(8,190)	(4,003)
Deferred tax liabilities	16	(2,265)	(2,057)	-	-
		(8,265)	(4,967)	(8,190)	(4,003)
Total liabilities		(22,310)	(12,332)	(9,213)	(4,935)
Net assets		38,648	36,696	43,421	42,923
Equity
Share capital	17	5,714	5,692	5,714	5,692
Share premium		6,889	6,866	6,889	6,866
Merger relief reserve		30,459	30,459	30,459	30,459
Reverse acquisition reserve		(9,469)	(9,469)	-	-
Retained earnings		4,963	3,078	359	(94)
Equity attributable to owners of the company		38,556	36,626	43,421	42,923
Non-controlling interest		92	70	-	-
Total Equity		38,648	36,696	43,421	42,923

The loss for the financial year dealt with in the financial statements of the Company is £436,000 (2016: £694,000).

THE FULHAM SHORE PLC

CONSOLIDATED STATEMENT OF CHANGE IN EQUITY

for the year ended 26 March 2017

	Attributable to owners of the Company
	Share  Capital  £'000	Share  Premium  £'000	Merger  Relief  Reserve  £'000	Reverse  Acq-  uisition  Reserve  £'000	Retained  Earnings  £'000	Equity  Share- holders ' Funds  £'000	Non-  Control-  ling  Interests  £'000	Total  Equity  £'000
At 29 March 2015	3,325	2,650	11,113	(9,469)	1,840	9,459	22	9,481
Profit for the period	-	-	-	-	56	56	20	76
Total comprehensive income	-	-	-	-	56	56	20	76
Transactions with owners
Ordinary shares issued (net of expenses)	2,367	4,216	19,346	-	-	25,929	-	25,929
Share based payments	-	-	-	-	639	639	-	639
Deferred tax on share based payments	-	-	-	-	543	543	-	543
Non-controlling interests adjustment	-	-	-	-	-	-	28	28
Total transactions with owners	2,367	4,216	19,346	-	1,182	27,111	28	27,139
At 27 March 2016	5,692	6,866	30,459	(9,469)	3,078	36,626	70	36,696
Profit for the period	-	-	-	-	947	947	22	969
Total comprehensive income	-	-	-	-	947	947	22	969
Transactions with owners
Ordinary shares issued (net of expenses)	22	23	-	-	-	45	-	45
Share based payments	-	-	-	-	631	631	-	631
Deferred tax on share based payments	-	-	-	-	307	307	-	307
Total transactions with owners	22	23	-	-	938	983	-	983
At 26 March 2017	5,714	6,889	30,459	(9,469)	4,963	38,556	92	38,648

THE FULHAM SHORE PLC

COMPANY STATEMENT OF CHANGE IN EQUITY

for the year ended 26 March 2017

	Share  Capital  £'000	Share  Premium  £'000	Merger  Relief  Reserve  £'000	Retained  Earnings  £'000	Total  Equity  £'000
At 29 March 2015	3,325	2,650	11,113	(556)	16,532
Loss for the year	-	-	-	(694)	(694)
Total comprehensive income for the year	-	-	-	(694)	(694)
Transactions with owners
Ordinary shares issued (net of expenses)	2,367	4,216	19,346	-	25,929
Share based payments	-	-	-	639	639
Deferred tax on share based payments	-	-	-	517	517
Total transactions with owners	2,367	4,216	19,346	1,156	27,085
At 27 March 2016	5,692	6,866	30,459	(94)	42,923
Loss for the year	-	-	-	(436)	(436)
Total comprehensive income for the year	-	-	-	(436)	(436)
Transactions with owners
Ordinary shares issued (net of expenses)	22	23	-	-	45
Share based payments	-	-	-	631	631
Deferred tax on share based payments	-	-	-	258	258
Total transactions with owners	22	23	-	889	934
At 26 March 2017	5,714	6,889	30,459	359	43,421

THE FULHAM SHORE PLC

CONSOLIDATED AND COMPANY CASH FLOW STATEMENT

for the year ended 26 March 2017

		Group		Parent
	Notes	Year  ended  26 March  2017	Year  ended  27 March  2016	Year  ended  26 March  2017	Year  ended  27 March  2016
		£'000	£'000	£'000	£'000
Net cash flow from/(used in) operating activities	19	10,273	3,718	(209)	56
Investing activities
Acquisition of property, plant and equipment		(12,358)	(7,085)	(236)	(3)
Acquisition of intangible assets		(76)	-	-	-
Cash flow from acquisition of subsidiaries	19	(376)	(6,249)	-	(6,589)
Loan to subsidiary undertakings		-	-	(2,553)	(1,244)
Net cash flow used in investing activities		(12,810)	(13,334)	(2,789)	(7,836)
Financing activities
Proceeds from issuance of new ordinary shares (net of expenses)		45	4,648	45	4,648
Repayments of bank borrowings		-	(2,120)	-	-
Capital received from bank borrowings		3,090	2,910	3,090	2,910
Interest received		1	4	261	1
Interest paid		(135)	(88)	(210)	(77)
Net cash flow from financing activities		3,001	5,354	3,186	7,482
Net increase/(decrease) in cash and cash equivalents		464	(4,262)	188	(298)
Cash and cash equivalents at the beginning of the period	12	(373)	3,889	(200)	98
Cash and cash equivalents at the end of the period	12	91	(373)	(12)	(200)

THE FULHAM SHORE PLC

ACCOUNTING POLICIES

GENERAL INFORMATION 

The Fulham Shore PLC is a public limited company incorporated and domiciled in England and Wales with registration number 07973930 and registered office at 1^st Floor, 50-51 Berwick Street, London, W1F 8SJ, United Kindom. The Company's ordinary shares are traded on the AIM Market.

BASIS OF PREPARATION 

The above audited financial information does not constitute statutory financial statements as defined in section 434 of the Companies Act 2006. The above figures for the period ended 26 March 2017 have been extracted from the Group's financial statements which have been reported on by the Group's auditors and received an audit opinion which was unqualified. The Group's statutory financial statements for the year ended 27 March 2016 have been lodged with the Registrar of Companies. These financial statements received an audit report which was unqualified and did not include any reference to matters to which the auditors drew attention by way of emphasis without qualifying their report or a statement under section 498(2) or section 498(3) of the Companies Act 2006. These financial statements will be dispatched to the shareholders and filed with the Registrar of Companies. The preliminary announcement was approved by the Board and authorised for issue on 11 July 2017.

The financial statements have been prepared under the historical cost convention and, as permitted by EU Law, the Financial Statements have been prepared and approved by the Directors in accordance with International Financial Reporting Standards as adopted by the EU ("IFRS").

The financial statements for the year ended 26 March 2017 are presented in Sterling because that is the primary currency of the primary economic environment in which the Group operates. All values are rounded to the nearest thousand pounds (£'000) except when otherwise indicated.

The parent company has not presented its own income statement, statement of total comprehensive income and related notes as permitted by section 408 of the Companies Act 2006.

At the date of authorisation of these financial statements, the following Standards and Interpretations relevant to the Group operations that have not been applied in these financial statements were in issue but not yet effective:

IFRS 2 (Amendment)      Classification and Measurement of Share Based Payment Transactions

IFRS 9                          Financial instruments

IFRS 12 (Amendment)    Disclosure of interest in Other Entities

IFRS 15                        Revenue from contracts with customers

IFRS 16                        Leases

IFRIC 23                        Uncertainty over income tax treatments

The Directors anticipate that the adoption of these Standards and Interpretations as appropriate in future years will have no material impact on the financial statements of the Group other than the new IFRS 16 Leases which will be mandatory for accounting periods beginning on or after 1 January 2019. This new standard, which is not currently EU endorsed will significantly change how restaurant leases will be accounted for. The Group is preparing its assessment project to identify the impact of the new lease accounting standard on the Group's existing and future restaurant leases.

GOING CONCERN

The consolidated financial statements have been prepared on a going concern basis. Given the risk analysis undertaken by the Directors and after reviewing the Group's net current liabilities position as at 26 March 2017, the budget for the next financial year, other longer term plans and financial resources including undrawn but available facilities described in note 14 and the extended facilities following the year end as described in note 24, the Board has a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. Therefore the Board is satisfied that, at the time of approving the financial statements, it is appropriate to adopt the going concern basis in preparing the financial statements.

SIGNIFICANT ACCOUNTING POLICIES

BASIS OF CONSOLIDATION

The consolidated financial statements incorporate those of The Fulham Shore PLC and all of its subsidiary undertakings for the period. Subsidiaries acquired are consolidated from the date that the Group has the power to control, exposure or rights to variable returns, and the ability to use its power over the returns and will continue to be consolidated until the date that such control ceases.

Although the legal form of the transaction during the period ended 29 June 2015 was an acquisition of Kefi Limited by The Fulham Shore PLC, the substance is the reverse of this. Accordingly the business combination has been prepared using reverse acquisition accounting.

The acquisition of other subsidiaries is accounted for using the acquisition method. The cost of the acquisition is measured at the aggregate of the fair values, at the date of exchange, of assets given, liabilities incurred or assumed, and equity instruments issued by the Group in exchange for control of the acquiree, plus any costs directly attributable to the business combination. The acquiree's identifiable assets and liabilities are recognised at their fair values at the acquisition date.

All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation.

INTANGIBLE ASSETS

Goodwill

Goodwill arising on the acquisition of an entity represents the excess of the cost of an acquisition over the Group's interest in the fair value attributed to the net assets at acquisition. Goodwill is not subject to amortisation but is tested for impairment at least annually. After initial recognition, goodwill is stated at cost less any accumulated impairment losses. Any impairment is recognised immediately in the income statement and is not subsequently reversed. Goodwill is allocated to cash generating units for the purpose of impairment testing. Each of these cash generating units represents the Group's investment in a subsidiary. On disposal of a subsidiary the attributable amount of goodwill is included in the determination of the profit or loss on disposal.

Trademarks and licenses

The fair value of the intangible assets acquired through the reverse acquisition was determined using discounted cash flow models. The key assumptions for the valuation method are those regarding future cash flows, tax rates and discount rates. The cash flow projections are based on management forecasts for the next four years period. The estimated useful lives range from 4 to 20 years on a straight-line basis.

Brand

The fair value of the brand intangible assets acquired through an acquisition of a subsidiary was determined using discounted royalty relief models. The key assumptions for the valuation method are those regarding future cash flows, tax rates and discount rates. The cash flow projections are based on management forecasts for the next ten year period.

Amortisation is charged to the income statement on a straight-line basis over the estimated useful lives of brand from the beginning of the financial year that they are available for use. The estimated useful lives are 10 years on a straight-line basis.

Computer Software

Computer software licences are capitalised on the basis of the costs incurred to acquire and bring into use the specific software. These costs are amortised over their estimated useful lives, being between 3 and 5 years. Costs that are directly associated with the production of identifiable and unique software products controlled by the Group, and that are expected to generate economic benefits exceeding costs beyond one year, are recognised as intangible assets. Direct costs include software development, employee costs and directly attributable overheads. Software integral to a related item of hardware equipment is accounted for as property, plant and equipment. Costs associated with maintaining computer software programmes are recognised as an expense when they are incurred.

PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment are stated at historical cost less depreciation and any recognised impairment loss.  The cost of property, plant and equipment includes directly attributable incremental costs incurred in their acquisition and installation.

Depreciation is provided on property, plant and equipment at rates calculated to write each asset down to its estimated residual value evenly over its expected useful life, as follows:-

Leasehold properties and improvements         over lease term or renewal term

Plant and equipment                                    20% to 33% straight line

Furniture, fixtures and fittings                        10% to 20% straight line

Assets in the course of construction are carried at cost, less any recognised impairment loss. Depreciation of these assets commences when the assets are ready for their intended use.

Residual values, useful lives and methods of depreciation are reviewed and adjusted if appropriate on an annual basis. An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. The gain or loss arising on the disposal or retirement of an asset is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in the income statement.

IMPAIRMENT OF ASSETS

Goodwill is not subject to amortisation but is tested for impairment annually or whenever there is an indication that the asset may be impaired. For the purpose of impairment testing, assets are grouped at the lowest levels for which there are separately identifiable cash flows, known as cash generating units. If the recoverable amount of the cash generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit. Impairment losses recognised for goodwill are not reversed in a subsequent period. Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

At each balance sheet date, the Group reviews the carrying amounts of its property, plant and equipment and intangible assets with finite useful lives to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent, if any, of the impairment loss. Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs. If the recoverable amount of an asset or cash-generating unit is estimated to be less than its carrying amount, the carrying amount of the asset or cash-generating unit is reduced to its recoverable amount. An impairment loss is recognised immediately in the income statement. Where an impairment loss subsequently reverses, the carrying amount of the asset or cash-generating unit is increased to the revised estimate of its recoverable amount, not to exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset or cash-generating unit in prior years. A reversal of an impairment loss is recognised immediately in the income statement.

FINANCIAL INSTRUMENTS

Financial assets and financial liabilities, in respect of financial instruments, are recognised on the balance sheet when the Group becomes a party to the contractual provisions of the instrument.

INVENTORIES

Inventories are valued at the lower of cost and net realisable value. Cost is determined on a first in, first out basis.  Net realisable value is based upon estimated selling price less further costs expected to be incurred to completion and disposal.  Provision is made for obsolete and slow-moving items.

TRADE AND OTHER RECEIVABLES

Receivables are classified as loans and receivables and are initially recognised at fair value.  They are subsequently measured at their amortised cost using the effective interest method less any provision for impairment.  A provision for impairment is made where there is objective evidence (including customers with financial difficulties or in default on payments), that amounts will not be recovered in accordance with original terms of the agreement.  A provision for impairment is established when the carrying value of the receivable exceeds the present value of the future cash flow, discounted using the original effective interest rate.  The carrying value of the receivable is reduced through the use of an allowance account and any impairment loss is recognised in the income statement.

CASH AND CASH EQUIVALENTS

Cash and cash equivalents comprise cash in hand and call deposits and other short term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value.

TRADE AND OTHER PAYABLES

Payables are initially recognised at fair value and subsequently at amortised cost using the effective interest method.

SHARE CAPITAL

Share capital represents the nominal value of ordinary shares issued.

SHARE PREMIUM

Share premium represents the amounts subscribed for share capital in excess of nominal value less the related costs of share issue.

MERGER RELIEF RESERVE

In accordance with Companies Act 2006 S.612 'Merger Relief', the company issuing shares as consideration for a business combination, accounted at fair value, is obliged, once the necessary conditions are satisfied, to record the share premium to the merger relief reserve.

REVERSE ACQUISITION RESERVE

Reverse accounting under IFRS 3 'Business Combinations' requires the difference between the equity of the legal parent and the issued equity instruments of the legal subsidiary pre-combination is to be recognised as a separate component of equity.

RETAINED EARNINGS

Retained earnings represents the cumulative profit and loss net of distributions.

FOREIGN CURRENCIES

Assets and liabilities denominated in foreign currencies are translated into sterling, the presentational and functional currency of the Group, at the rate of exchange ruling at the balance sheet date.  Transactions in foreign currencies are recorded at the rate ruling at the date of the transaction.  All differences are taken to the income statement.

FINANCIAL LIABILITIES AND EQUITY INSTRUMENTS

Financial liabilities and equity instruments issued by the Group are classified according to the substance of the contractual arrangements entered into and the definitions of a financial liability and an equity instrument. An equity instrument is any contract that evidences a residual interest in the assets of the Group after deducting all of its liabilities and includes no obligation to deliver cash or other financial assets. Interest bearing loans and overdrafts are initially measured at fair value (which is equal to cost at inception), and are subsequently measured at amortised cost, using the effective interest rate method. Any difference between the proceeds (net of transaction costs) and the settlement or redemption of borrowings is recognised over the term of the borrowing. Equity instruments issued by the Group are recorded at the proceeds received, net of direct issue costs.

TAXATION

Income tax expense represents the sum of the current tax payable and deferred tax.

Current tax payable or recoverable is based on taxable profit for the year. Taxable profit differs from profit as reported in the income statement because some items of income or expense are taxable or deductible in different years or may not be taxable or deductible. The Group's liability for current tax is calculated using tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

Deferred tax is the tax expected to be payable or recoverable in the future arising from temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit. It is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from the initial recognition of goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the tax profit or the accounting profit.

The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.

Deferred tax is calculated at the tax rates that are expected to apply in the year when the liability is settled or the asset realised, based on tax rates that have been enacted or substantively enacted by the balance sheet date. Tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they either relate to income taxes levied by the same taxation authority on either the same taxable entity or on different taxable entities which intend to settle the current tax assets and liabilities on a net basis.

Tax is charged or credited to the income statement, except when it relates to items charged or credited directly to equity, in which case the tax is also recognised directly in equity.

LEASES

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership of the asset to the lessee. All other leases are classified as operating leases.

Assets held under finance leases are recognised as assets of the Group at their fair value at the inception of the lease or, if lower, at the present value of the minimum lease payments as determined at the inception of the lease. The corresponding liability to the lessor is included in the balance sheet as a finance lease obligation. Lease payments are apportioned between finance charges and reduction of the lease obligation so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are recognised in the income statement.

Rentals payable under operating leases are charged to the income statement on a straight line basis or other systematic basis if representative of the time pattern of the user's benefit over the term of the relevant lease. Benefits received and receivable as an incentive to enter into an operating lease are also spread on a straight line basis over the lease term.

PROVISIONS

Provisions are recognised when the Group has a present obligation as a result of a past event and it is probable that the Group will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation. Provisions are measured at the Directors' best estimate of the expenditure required to settle the obligation at the balance sheet date and are discounted to present value where the effect is material.

RETIREMENT BENEFITS

The amount charged to the income statement in respect of pension costs is the contributions payable to money purchase schemes in the year. Differences between contributions payable in the year and contributions actually paid are shown as either accruals or prepayments in the balance sheet.

REVENUE RECOGNITION

Revenue represents the fair value of the consideration received or receivable, net of Value Added Tax, for goods sold and services provided to customers outside the Group after deducting discounts. Revenue is recognised when the significant risks and rewards of ownership are transferred.

INTEREST INCOME

Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset's net carrying amount.

SHARE BASED PAYMENTS

The Group issues equity-settled share-based payments to certain employees. Equity-settled share-based payments are measured at fair value (excluding the effect of non market-based vesting conditions) at the date of grant. The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight-line basis over the vesting period, based on the Company's estimate of the shares that will eventually vest and adjusted for the effect of non market-based vesting conditions.

Fair value is measured using a Black-Scholes valuation model. The expected life used in the model has been adjusted, based on management's best estimate, for the effects of non-transferability, exercise restrictions and behavioural considerations.

ACCOUNTING PERIOD

The consolidated group accounts have been prepared for the year to 26 March 2017 with the comparative year to 27 March 2016.

The Company accounts have been prepared for the same periods as the Group.

ACCOUNTING ESTIMATES

The preparation of financial statements in conformity with IFRS requires management to make judgements, estimates and assumptions that affect the application of the Group's accounting policies, described above, with respect to the carrying amounts of assets and liabilities at the date of the financial statements, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting year. These judgements, estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, including current and expected economic conditions. Although these judgements, estimates and associated assumptions are based on management's best knowledge of current events and circumstances, the actual results may differ. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the year in which the estimate is revised and in any future years affected.

The judgements, estimates and assumptions which are of most significance to the Group are detailed below:

Valuation of acquired businesses - Acquisition and intangible assets

The Group applied the principles of IFRS 3's acquisition accounting in respect of the acquisition of Franco Manca Holdings Limited during the year ended 27 March 2016. The key judgements involved were the identification and valuation of intangible assets which required the estimation of future cash flows arising from a royal relief model and the selection of a suitable discount rate and the determination that the difference between the fair value of the consideration effectively given and the aggregate of the fair values of the separable net assets acquired effectively represents the cost of acquiring the cash generating units in Franco Manca.

Assessment of the recoverable amounts in respect of assets tested for impairment

The Group tests property, plant and equipment and intangible assets, including goodwill, for impairment on an annual basis or more frequently if there are indications that amounts may be impaired. The impairment analysis for such assets is principally based upon discounted estimated future cash flows from the use and eventual disposal of the assets. Such an analysis includes an estimation of the future anticipated results and cash flows, annual growth rates and the appropriate discount rates.

Valuation of share based payments

The charge for share based payments is calculated in accordance with the methodology described in note 18. The model requires highly subjective assumptions to be made including the future volatility of the Company's share price, expected dividend yield and risk-free interest rates.

OPERATING SEGMENTS

The Group considers itself to have two key operating segments, being the management and operation of The Real Greek restaurants and the management and operation of Franco Manca restaurants. The Group operates in only one geographical segment, being the United Kingdom.

DEFINITIONS

OPERATING PROFIT

Operating profit is defined as profit before taxation, finance income and finance costs.

HEADLINE OPERATING PROFIT

Headline operating profit is defined as operating profit before amortisation of brand, impairment of property, plant and equipment, impairment of goodwill and intangible assets, onerous lease costs, restructuring costs, costs of reverse acquisition, cost of acquisition, share based payments, loss on disposal of property, plant and equipment and pre-opening costs.

HEADLINE PROFIT BEFORE TAXATION

Headline profit before taxation is defined as profit/loss before taxation before amortisation of brand, impairment of property, plant and equipment, impairment of goodwill and intangible assets, onerous lease costs, restructuring costs, costs of reverse acquisition, costs of acquisition, share based payments, loss on disposal of property, plant and equipment and pre-opening costs.

PRE-OPENING COSTS

The restaurant pre-opening costs represent costs incurred up to the date of opening a new restaurant that are written off to the profit and loss account in the period in which they are incurred.

EBITDA

EBITDA is defined as operating profit before depreciation and amortisation.

HEADLINE EBITDA

Headline EBITDA is defined as EBITDA before amortisation of brand, impairment of property, plant and equipment, impairment of goodwill and intangible assets, onerous lease costs, restructuring costs, costs of reverse acquisition, cost of acquisition, share based payments, loss on disposal of property, plant and equipment and pre-opening costs.

HEADLINE EPS

Headline EPS is defined in note 6.

THE FULHAM SHORE PLC

NOTES TO THE FINANCIAL STATEMENTS

for the year ended 26 March 2017

1

SEGMENT INFORMATION

For management purposes, the Group was organised into two operating divisions during the year ended 26 March 2017. These divisions, The Real Greek and Franco Manca, are the basis on which the Group reports its primary segment information. All other segments include the Bukowski Grill franchise and the Fulham Shore head office

For the year ended 26 March 2017:

	The Real  Greek  £'000	Franco  Manca  £'000	All other  Segments  £'000	Total   £'000
External revenue	13,675	26,766	833	41,274
Headline EBITDA	2,284	5,415	(581)	7,118
Depreciation and amortisation	(649)	(1,707)	(92)	(2,448)
Headline operating profit	1,635	3,708	(673)	4,670
Operating profit	1,049	1,100	(871)	1,278
Finance income	1	-	-	1
Finance costs	-	(1)	(134)	(135)
Segment profit/(loss) before taxation	1,050	1,099	(1,005)	1,144
Income tax expense				(175)
Profit for the year				969
Assets	7,979	48,914	4,065	60,958
Liabilities	(4,073)	(10,872)	(7,365)	(22,310)
Net assets	3,906	38,042	(3,300)	38,648
Capital expenditure	2,185	10,716	246	13,147

1	SEGMENT INFORMATION (continued)

For the year ended 27 March 2016:

	The Real  Greek  £'000	Franco  Manca  £'000	All other  Segments  £'000	Total   £'000
External revenue	11,699	17,494	58	29,251
Headline EBITDA	1,892	4,014	(674)	5,232
Depreciation and amortisation	(521)	(1,414)	(17)	(1,952)
Headline operating profit	1,371	2,600	(691)	3,280
Operating profit	1,082	477	(1,052)	507
Finance income	3	-	1	4
Finance costs	(2)	(8)	(78)	(88)
Segment profit/(loss) before taxation	1,083	469	(1,129)	423
Income tax expense				(347)
Profit for the year				76
Assets	6,072	39,616	3,340	49,028
Liabilities	(2,241)	(5,806)	(4,286)	(12,332)
Net assets	3,831	33,810	(946)	36,696
Capital expenditure	753	5,978	485	7,216

The Group's two business segments primarily operate in one geographical area which is the United Kingdom.

2	OPERATING PROFIT
		Year  ended  26 March  2017	Year  ended  27 March  2016
		£'000	£'000
	Operating profit is stated after charging:
	Staff costs (note 3)	14,786	10,362
	Depreciation of property, plant and equipment	2,432	1,516
	Amortisation of intangible assets	837	1,256
	Operating lease rentals:
	Land and buildings	3,936	1,313
	Inventories - amounts charged as an expense	8,196	6,047
	Auditor's remuneration:
	- for statutory audit services	75	77
	- for other assurance services	7	-
	- for tax services	27	28
	- for transactional services	5	85
	Share based payments	631	639
	Pre-opening costs	1,914	908
	Exceptional costs -acquisition costs	26	405

3	EMPLOYEES
		Year  ended  26 March  2017	Year  ended  27 March  2016
		No.	No.
	The average monthly number of persons (including Directors) employed by the group during the period was:
	Administration and management	23	15
	Restaurants	800	555
		823	570

3	EMPLOYEES (continued)

		Year  ended  26 March  2017	Year  ended  27 March  2016
		£'000	£'000
	Staff costs for above persons
	Salaries and fees	13,808	9,612
	Social security costs	912	710
	Share based payments	631	639
	Defined contribution pension costs	73	40
		15,424	11,001

DIRECTORS' REMUNERATION

The remuneration of Directors, who are the key management personnel of the company, is set out in aggregate below.

		Year  ended  26 March  2017	Year  ended  27 March  2016
		£'000	£'000
	Salaries, fees and other short term employee benefits	899	659
	Social security costs	59	157
	Share based payments	473	452
		1,431	1,268

NJ Donaldson exercised 1,115,972 share options in the period ended 26 March 2017 (2016: Nil) realising a gain of £184,000 (2016: £Nil). No directors received any pension benefits (2016: £Nil).

Included above are fees paid to related parties for the provision of directors' services which are further described in note 22.

The Directors are the only employees of the Company. The Directors' remuneration above is the only staff costs for the Company.

4

FINANCE COSTS

		Year  ended  26 March  2017	Year  ended  27 March  2016
		£'000	£'000
	Interest expenses on bank loans and overdrafts	135	88
		135	88

5

INCOME TAX EXPENSE

		Year  ended  26 March  2017	Year  ended  27 March  2016
		£'000	£'000
	Based on the result for the period:
	UK corporation tax at 20% (2016: 20%)	474	588
	Adjustment in respect of prior periods	(302)	(51)
	Total current taxation	172	537
	Deferred taxation:
	Origination and reversal of temporary timing differences	3	(190)
	Total deferred tax	3	(190)
	Total tax expense on profit on ordinary activities	175	347

5	INCOME TAX EXPENSE (continued)

	Factors affecting tax charge for year:	Year  ended  26 March  2017	Year  ended  27 March  2016
		£'000	£'000
	Profit before taxation	1,144	423
	Taxation at UK corporation tax rate of 20% (2016: 20%)	229	85
	Expenses not deductible for tax purposes	14	29
	Depreciation on non-qualifying fixed assets	345	237
	Share based payments not previously recognised	(87)	49
	Tax losses utilised not previously recognised	-	(2)
	Adjustment to previously recognised provision	(23)	-
	Adjustment to tax charge in respect of previous periods	(303)	(51)
	Total income tax expense in the income statement	175	347

Factors that may affect tax charges are disclosed in note 16.

6          EARNINGS PER SHARE

		Year  ended  26 March  2017	Year  ended  27 March  2016
		£'000	£'000
	Profit for the purposes of basic and diluted earnings per share:	947	56
	Share based payments	631	639
	Deferred tax on share based payments	(236)	(135)
	Pre-opening costs	1,915	908
	Amortisation of brand	821	821
	Deferred tax on amortisation of brand	(137)	(137)
	Exceptional costs - cost of acquisition	26	405
	Headline profit for the period for the purposes of headline basic and diluted earnings per share:	3,967	2,557
		Year  ended  26 March  2017	Year  ended  27 March  2016
		No. '000	No. '000
	Weighted average number of ordinary shares in issue for the purposes of basic earnings per share	570,371	554,811
	Effect of dilutive potential ordinary shares from share options	30,855	29,553
	Weighted average number of ordinary shares in issue for the purposes of diluted earnings per share	601,226	584,364

Further details of the share options that could potentially dilute basic earnings per share in the future are provided in note 18.

		Year  ended  26 March  2017	Year  ended  27 March  2016
	Earnings per share:
	Basic	0.2p	0.0p
	Diluted	0.2p	0.0p
	Headline Basic	0.7p	0.5p
	Headline Diluted	0.7p	0.4p

7	INTANGIBLE ASSETS

Group	Trademarks,  License and  franchises  £'000	Software  £'000	Brand  £'000	Goodwill  £'000	Total  £'000
Cost
29 March 2015	1,709	-	-	1,774	3,483
Additions due to business combination	30	-	8,211	17,858	26,099
27 March 2016	1,739	-	8,211	19,632	29,582
Additions	-	76	-	-	76
Reclassification	(1,681)	-	-	1,073	(608)
26 March 2017	58	76	8,211	20,705	29,050
Accumulated amortisation
29 March 2015	191	-	-	-	191
Charge in the year	435	-	821	-	1,256
27 March 2016	626	-	821	-	1,447
Charge in the year	5	11	821	-	837
Reclassification	(608)	-	-	-	(608)
26 March 2017	23	11	1,642	-	1,676
Net book value
26 March 2017	35	65	6,569	20,705	27,374
27 March 2016	1,113	-	7,390	19,632	28,135

The amortisation charges for trademarks, license and franchises for the year are recognised within administrative expenses.

Goodwill of £107,000 relates to the original acquisition of The Real Greek Food Company Limited ("The Real Greek") by Kefi Limited.

Goodwill of £1,667,000 relates to the reverse acquisition of The Fulham Shore PLC by Kefi Limited. The goodwill is attributable to the value of the listing of The Fulham Shore PLC.

Goodwill of £18,931,000 relates to the acquisition of Franco Manca Holdings Limited ("Franco Manca Holdings"). The goodwill is attributable to the cash generating units held within Franco Manca 2 UK Limited. Included in this goodwill is £1,073,000 which was reclassified from franchise intangible following the reacquisition of the rights when Franco Manca Holdings was acquired. This should have been eliminated at the date of the acquisition in the prior year. The Directors do not consider the adjustment to be material and have therefore recognised it in the current year.

7	INTANGIBLE ASSETS (continued)

For the purposes of impairment testing the Directors consider each acquired business or operating segment as separate cash generating units (CGUs). The recoverable amount for each CGU was determined using a value in use calculation based upon management forecasts for the trading results for those entities. Value in use calculations are based on cash flow forecasts derived from the most recent financial budgets and then extrapolated over ten years. Ten years is believed to be reasonable due to the possibility of further investment in each CGU and the related brands. The discount rate applied to cash flow projections is 12% (2016: 12%) which is the rate believed by the Directors to reflect the risks associated with the CGU.

The Group has also conducted a sensitivity analysis on the impairment test of the CGU carrying value including reducing sales level and changing discount rates and there is no reasonably expected change would give rise to an impairment charge.

8	PROPERTY, PLANT AND EQUIPMENT

Group	Leasehold  improvements  £'000	Plant and  equipment  £'000	Furniture,  fixtures  and  fittings  £'000	Assets  under  construction  £'000	Total  £'000
Cost
29 March 2015	4,601	457	414	470	5,942
On acquisition	4,635	476	154	900	6,165
Additions	4,534	957	228	1,496	7,215
Reclassification	1,065	207	22	(1,294)	-
Disposals	-	-	-	(29)	(29)
27 March 2016	14,835	2,097	818	1,543	19,293
Additions	9,020	2,111	768	1,248	13,147
Reclassification	1,452	24	5	(1,481)	-
Disposals	(146)	(9)	-	-	(155)
26 March 2017	25,161	4,223	1,591	1,310	32,285
Accumulated depreciation
29 March 2015	738	190	116	-	1,044
Charge in the year	1,043	358	115	-	1,516
27 March 2016	1,781	548	231	-	2,560
Charge in the year	1,587	649	196	-	2,432
Disposals	(12)	(1)	-	-	(13)
26 March 2017	3,356	1,196	427	-	4,979
Net book value
26 March 2017	21,805	3,027	1,164	1,310	27,306
27 March 2016	13,054	1,549	587	1,543	16,733

8	PROPERTY, PLANT AND EQUIPMENT (continued)

Parent Company		Leasehold  improvements  £'000	Plant and  equipment  £'000	Furniture,  fixtures  and  fittings  £'000	Total  £'000
Cost
29 March 2015		3	28	8	39
Additions		-	1	2	3
Reclassification
27 March 2016		3	29	10	42
Additions		202	19	15	236
26 March 2017		205	48	25	278
Accumulated depreciation
29 March 2015		2	16	2	20
Charge in the year		1	9	1	11
27 March 2016		3	25	3	31
Charge in the year		13	5	2	20
26 March 2017		16	30	5	51
Net book value
26 March 2017		189	18	20	227
27 March 2016		-	4	7	11

All depreciation charges have been recognised in administrative expenses in the income statement.

All non-current assets are located in the United Kingdom.

9	INVESTMENTS IN SUBSIDIARIES
			26 March  2017  £'000	27 March  2016  £'000
	Parent Company
	Cost and net book value
	Opening position		42,579	14,261
	Investment in subsidiaries		432	28,318
	Closing position		43,011	42,579

As at 26 March 2017, the Company had the following subsidiary undertakings which are all registered at 1st Floor, 50-51 Berwick Street, London W1F 8SJ:

	Name of subsidiary	Class of  Holding	Proportion  of shares held,  ownership  interest and  voting power	Nature of business
	Incorporated in England and Wales
	FM98 LTD Limited*	Ordinary	100%	Operation of restaurants
	10DAS Limited	Ordinary	100%	Operation of restaurants
	Café Pitfield Limited	Ordinary	100%	Dormant
	Kefi Limited	Ordinary	99%	Dormant
	The Real Greek Food Company Limited*	Ordinary	99%	Operation of restaurants
	The Real Greek Wine Company Limited*	Ordinary	99%	Dormant
	Souvlaki & Bar Limited*	Ordinary	99%	Dormant
	CHG Brands Limited*	Ordinary	99%	Dormant
	The Real Greek International Limited*	Ordinary	99%	Dormant
	Franco Manca Holdings Limited	Ordinary	99%	Dormant
	Franco Manca 2 UK Limited*	Ordinary	99%	Operation of restaurants
	FM6 Limited*	Ordinary	99%	Restaurant property
	FM111 Limited*	Ordinary	99%	Restaurant property
	Franco Manca International Limited*	Ordinary	99%	Dormant

* Held by subsidiary undertaking

10	INVENTORIES
		Group		Parent company
		26  March 2017  £'000	27  March  2016  £'000	26  March 2017 £'000	27  March  2016  £'000
	Raw materials and consumables	1,052	687	-	-

Inventories are charged to cost of sales in the consolidated comprehensive statement of income.

11	TRADE AND OTHER RECEIVABLES
		Group		Parent company
		26  March 2017 £'000	27  March  2016  £'000	26  March 2017 £'000	27  March  2016  £'000
	Included within non-current assets:
	Amounts receivable from subsidiaries	-	-	7,974	4,324
	Other receivables	947	934	-	-
		947	934	7,974	4,324
	Included within current assets:
	Trade receivables	847	474	53	-
	Other receivables	179	111	-	-
	Other taxation and social security costs	-	-	11	21
	Prepayments and accrued income	1,576	863	120	98
		2,602	1,448	184	119
		3,549	2,382	8,158	4,443

Other receivables due after more than one year relate to rent deposits.

Receivables are denominated in sterling. The Board believes that the balances are recoverable in full and therefore no impairments are required.

The Group and Company hold no collateral against these receivables at the balance sheet date. The Directors consider that the carrying amount of receivables approximates to their fair value.

12	CASH AND CASH EQUIVALENTS
		Group		Parent company
		26 March  2017  £'000	27 March  2016  £'000	26 March  2017  £'000	27 March  2016  £'000
	Cash at bank and in hand	271	197	-	-
	Cash and cash equivalents as presented in the balance sheet	271	197	-	-
	Bank overdraft	(180)	(570)	(12)	(200)
		91	(373)	(12)	(200)

Bank balances comprise cash held by the company on a short term basis with maturity of three months or less. The carrying amount of these assets approximates to their fair value.

13		TRADE AND OTHER PAYABLES
			Group		Parent company
			26 March  2017  £'000	27 March  2016  £'000	26 March  2017  £'000	27 March  2016  £'000
		Included in current liabilities:
		Trade payables	7,375	2,555	266	115
		Other taxation and social security payable	1,012	716	30	21
		Other payables	95	155	28	150
		Accruals and deferred income	4,850	2,739	687	446
			13,332	6,165	1,011	732

Trade payables were all denominated in sterling and comprise amounts outstanding for trade purchases and ongoing costs and are non-interest bearing.

The Directors consider that the carrying amount of trade payables approximate to their fair value.

14		BORROWINGS
			Group		Parent company
			26 March  2017  £'000	27 March  2016  £'000	26 March  2017  £'000	27 March  2016  £'000
		Short term borrowings:
		Bank overdraft	180	570	12	200
		Long term borrowings:
		Bank loans	6,000	2,910	6,000	2,910
		Amounts owed to subsidiary undertakings	-	-	2,190	1,093
			6,000	2,910	8,190	4,003
			6,180	3,480	8,202	4,203

As at 26 March 2017, the Group's committed Sterling borrowing facilities comprises a revolving credit facility of £6,000,000 (2016: £6,000,000) expiring between two and five years and a bank overdraft facility from HSBC Bank PLC which is secured by a mortgage debenture in favour of HSBC Bank PLC representing fixed or floating charges over all assets of the Group. The interest rate applicable on this bank loan is 2.50% above LIBOR.

The bank overdraft is repayable on demand with interest being charged at 2.5% over base rate and is secured by a debenture giving fixed and floating charges over all assets of the Group.

Amounts owed to subsidiary undertakings are amounts borrowed from The Real Greek Food Company Limited, a subsidiary of the Company and are repayable on 26 March 2019. The interest rate applicable on the amounts owed to subsidiary undertakings is 3.5%.

15	FINANCIAL INSTRUMENTS

The Group is exposed to the risks that arise from its use of financial instruments. The Group's finance function provides a centralised service to all Group businesses for funding, foreign exchange and interest rates management. Derivative instruments may be transacted solely for risk management purposes. The management consider that the key financial risk factors of the business are liquidity risks, market risk, foreign exchange risk and credit risk.

This note describes the objectives, policies and processes of the Group for managing those risks and the methods used to measure them.

Financial Assets and Liabilities

The Group and Company had the following financial assets and liabilities:

			Group		Parent company
			26 March  2017  £'000	27 March  2016  £'000	26 March  2017  £'000	27 March  2016  £'000
		Non-current financial assets
		Amounts owed by subsidiary undertakings	-	-	7,974	4,324
		Other receivables	947	934	-	-
		Current financial assets
		Cash at bank and in hand	271	197	-	-
		Trade and other receivables*	1,026	585	53	-
			2,244	1,716	8,027	4,324
		Current financial liabilities
		At amortised cost - borrowings	180	570	12	200
		At amortised cost - payables**	12,268	5,346	981	711
		Non-current financial liabilities
		At amortised cost - borrowings	6,000	2,910	6,000	2,910
		At amortised cost - payables	-	-	2,190	1,093
			18,448	8,826	9,183	4,914

* excludes other taxation and social security receivable and prepayments included in trade and other receivables in note 11.

** excludes other taxation and social security and deferred income included in trade and other payables in note 13.

15	FINANCIAL INSTRUMENTS (continued)

The maturity analysis table below analyses the Group's financial assets and liabilities into relevant maturity groupings based on the remaining period at the balance sheet to the contractual maturity date. The amounts disclosed in the table are contractual undiscounted cash flows.

	For the period ended 26 March 2017	Less than  1 year  £'000	Between  1 and  5 years  £'000	More  than  5 years  £'000	Total  £'000
	Cash at bank and in hand	271	-	-	271
	Trade and other receivables	1,026	47	900	1,973
	Bank loans and overdrafts	(180)	(6,000)	-	(6,180)
	Trade and other payables	(12,268)	-	-	(12,268)
		(11,151)	(5,953)	900	(16,204)

	For the period ended 27 March 2016	Less than  1 year  £'000	Between  1 and  5 years  £'000	More  than  5 years  £'000	Total  £'000
	Cash at bank and in hand	197	-	-	197
	Trade and other receivables	585	217	717	1,519
	Bank loans	(570)	(2,910)	-	(3,480)
	Trade and other payables	(5,346)	-	-	(5,346)
		(5,134)	(2,693)	717	(7,110)

The financial instruments recognised on the balance sheets and shown above are all loans and receivables and financial liabilities at amortised cost.

15	FINANCIAL INSTRUMENTS (continued)

The maturity analysis table below analyses the Company's financial assets and liabilities into relevant maturity groupings based on the remaining period at the balance sheet to the contractual maturity date. The amounts disclosed in the table are contractual undiscounted cash flows.

	For the period ended 26 March 2017	Less than  1 year  £'000	Between  1 and  5 years  £'000	Total  £'000
	Trade and other receivables	53	7,974	8,027
	Bank loans and overdrafts	(12)	(6,000)	(6,012)
	Trade and other payables	(983)	(2,190)	(3,173)
		(942)	(216)	(1,158)

	For the period ended 27 March 2016	Less than  1 year  £'000	Between  1 and  5 years  £'000	Total  £'000
	Trade and other receivables	-	4,324	4,324
	Bank loans and overdrafts	(200)	(2,910)	(3,110)
	Trade and other payables	(711)	(1,093)	(1,804)
		(911)	321	(590)

The financial instruments recognised on the balance sheets and shown above are all loans and receivables and financial liabilities at amortised cost.

Liquidity Risks

The Group and Company had a committed long term revolving credit facility of £6,000,000 (2016: £6,000,000) and short term bank overdraft facilities available to manage its liquidity as at 26 March 2017 of £500,000 (2016: £500,000). Both facilities were extended following the year end as described in note 24.

15	FINANCIAL INSTRUMENTS (continued)

Market Risks

The Group's market risk exposure arises mainly from its floating interest rate interest bearing borrowings. Only the following financial assets and liabilities were interest bearing:

			Group		Parent company
			26 March  2017  £'000	27 March  2016  £'000	26 March  2017  £'000	27 March  2016  £'000
	Floating rate
	Cash at bank and in hand		271	197	-	-
	Bank overdraft		(180)	(570)	(12)	(200)
	Bank loans		(6,000)	(2,910)	(6,000)	(2,910)
			(5,909)	(3,283)	(6,012)	(3,110)

Trade and other receivables and trade and other payables are all non-interest bearing.

Weighted average interest rates paid for bank loans during the period ended 26 March 2017 were 1.9% and period ended 27 March 2016 were 2.0% and the weighted average interest rates paid for bank overdrafts during the period ended 26 March 2017 were 2.5% and period ended 27 March 2016 were 2.5%.

The Group has derived a sensitivity analysis based on a 0.5% variance in LIBOR element of floating interest rates. The annualised impact of an increase in LIBOR by 0.5% applied to the balance of floating rate bank loans at the period end would be £30,000 (2016: £14,000).

Foreign Exchange Risks

During the periods ended 26 March 2017 and 27 March 2016, the Group did not receive or pay significant amounts denominated in foreign currencies. As purchasing from foreign franchised territories that is not denominated or agreed in Sterling increase to a significant level, the Group will implement a foreign exchange management policy.

Credit Risks

The Group's exposure to credit risk arises mainly from as follows:

			Group		Parent company
			26 March  2017  £'000	27 March  2016  £'000	26 March  2017  £'000	27 March  2016  £'000
		Cash at bank and in hand	271	197	-	-
		Trade receivables and other receivables	1,026	585	8,027	4,221
			1,297	782	8,027	4,221

15	FINANCIAL INSTRUMENTS (continued)

The majority of the Group's cash balances have been held in current accounts at HSBC Bank PLC during the periods ended 26 March 2017 and 27 March 2016 and did not earn any significant interest.

The majority of the Group's trade receivables are due for maturity within 7 days and largely comprise amounts receivable from credit and debit card clearing houses.

Fair Values of Financial Assets and Financial Liabilities

The fair value amounts of the Group's financial assets and liabilities as at 26 March 2017 and 27 March 2016 did not materially vary from the carrying value amounts.

16	DEFERRED TAXATION

Analysis of movements in net deferred tax balance during the period:

		Group		Parent company
		26 March  2017  £'000	27 March  2016  £'000	26 March  2017  £'000	27 March  2016  £'000
	Opening position	(1,163)	(277)	825	193
	Arising on acquisition	-	(1,619)	-	-
	Transfer to reserves	307	543	258	517
	Movement in accelerated capital   allowances	(487)	(184)	-	-
	Tax on share based payments	212	151	155	115
	Tax on intangible assets	271	223	-	-
	Transfer (to)/from profit and loss	(3)	190	155	115
	Net deferred tax (liability)/asset	(859)	(1,163)	1,238	825

The Group's deferred taxation liability disclosed above relates to the following:

		Group		Parent company
		26 March  2017  £'000	27 March  2016  £'000		26 March  2017  £'000	27 March  2016  £'000
	Deferred tax assets
	Share options	1,406	894		1,238	825
	Deferred taxation assets	1,406	894		1,238	825
	Deferred tax liabilities
	Accelerated capital allowances	1,178	691		-	-
	Intangible assets	1,087	1,366		-	-
	Deferred taxation liabilities	2,265	2,057		-	-

16	DEFERRED TAXATION (continued)

The Company has losses of £283,000 (2016: £283,000) which, subject to agreement with HM Revenue & Customs, are available to offset against the Company's future profits. A deferred taxation asset in respect of these losses of £57,000 (2016: £57,000) has not been recognised in the financial statements. Although the directors are confident that the Company will achieve future profitability in line with current expectations, the timing of such profits is uncertain and therefore the directors have not recognised the entire deferred tax asset. The Directors have recognised deferred tax assets in relation to the share based payment charge recognised in the year as such deferred tax asset may be used against future group tax relief.

17	SHARE CAPITAL
		Group		Parent company
		27 March  2017  £'000	27 March  2016  £'000	26 March  2017  £'000	27 March  2016  £'000
	Allotted, issued called up and fully paid:
	571,385,237 (2016: 569,153,293) ordinary shares of 1p each	5,714	5,692	5,714	5,692

The Company has one class of ordinary share which carries no rights to fixed income.

On 21 April 2015, 43,181,818 Ordinary Shares of £0.01 were issued by the Company and were allotted for cash at £0.11 per Ordinary Share, credited as fully paid and a further 193,457,975 Ordinary Shares of £0.01 were issued by the Company at £0.11 per Ordinary Share as consideration to acquire 99% of the issued share capital of Franco Manca Holdings Limited.

On 5 August 2016, 1,115,972 Ordinary Shares of £0.01 were issued by the Company and were allotted for cash at £0.02 per Ordinary Share, credited as fully paid, on the exercise of share warrants in the Company.

On 14 October 2016, 1,115,972 Ordinary Shares of £0.01 were issued by the Company and were allotted for cash at £0.02 per Ordinary Share, credited as fully paid, on the exercise of unapproved share options in the Company.

18	SHARE BASED PAYMENTS

The Group currently uses a number of equity settled share plans to incentivise to its Directors and employees.

The Group operates four share plans:

·      The Fulham Shore Enterprise Management Incentive ("EMI") Share Option Plan;

·      The Fulham Shore Unapproved Share Option Plan ("Unapproved Plan");

·      The Fulham Shore Company Share Option Plan ("CSOP"); and

·      The Fulham Shore Share Incentive Plan ("SIP")

The Group's Share Plans provide for a grant price equal to the market price of the Company shares on the date of grant. The vesting period on all Share Plans except the SIP is 3 years with an expiration date 7 years from the date of grant. Furthermore, share options are forfeited if the employee leaves the Group before the options vest unless forfeiture is waived at the discretion of the Remuneration Committee, if established, or the Board. For the SIP, the vesting period ranges from 1 day to 3 years with an expiration date 10 years from the date of grant.

The charge recorded in the financial statements of the Group in respect of share-based payments is £631,000 (2016: £639,000).

The Fulham Shore EMI, Unapproved Plan and CSOP

Outstanding share options under The Fulham Shore EMI, The Fulham Shore Unapproved Share Option Plan and The Fulham Shore CSOP to acquire ordinary shares of 1 pence each as at 26 March 2017 are as follows:

		Year  ended  26 March  2017  '000	Year  ended  27 March  2016  '000
	At the beginning of the year	55,625	29,927
	Granted during the year	7,200	25,698
	Exercised during the year	(1,116)	-
	Lapsed during the year	(1,101)	-
	At the end of the year	60,608	55,625

18	SHARE BASED PAYMENTS (continued)

	Weighted average exercise price	Year  ended  26 March  2017  £	Year  ended  27 March  2016  £
	At the beginning of the year	0.08	0.05
	Granted during the year	0.18	0.11
	Exercised during the year	(0.02)	-
	Lapsed during the year	(0.11)	-
	At the end of the year	0.09	0.08

Outstanding and exercisable share options to acquire ordinary shares of 1 pence each as at 26 March 2017 under various Group share plans are as follows:

For the year ended 26 March 2017
		Options outstanding			Options exercisable
	Range of exercise prices	Number  of  shares  '000	Weighted  average  exercise  price  £	Weighted  average  remaining  contractual  life  months	Number  of  shares  '000	Weighted  average  exercise  price  £	Weighted  average  remaining  contractual  life  months
	EMI
	£0.02	2,232	0.0200	35	2,232	0.0200	35
	£0.05	2,779	0.0500	47	2,779	0.0500	47
	£0.06	9,440	0.0600	55	-	-	-
		14,451	0.0519	50	5,011	0.0366	42
	Unapproved
	£0.05	554	0.0500	47	554	0.0500	47
	£0.06	13,805	0.0600	55	-	-	-
	£0.11	24,673	0.1100	61	-	-	-
	£0.1775	293	0.1775	119	-	-	-
	£0.1825	2,114	0.1825	111	-	-	-
		41,439	0.0967	62	554	0.0500	47
	CSOP
	£0.1775	907	0.1775	119	-	-	-
	£0.1825	3,811	0.1825	111	-	-	-
		4,718	0.1815	113	-	-	-

18	SHARE BASED PAYMENTS (continued)

For the year ended 27 March 2016
		Options outstanding			Options exercisable
	Range of exercise prices	Number  of  shares  '000	Weighted  average  exercise  price  £	Weighted  average  remaining  contractual  life  months	Number  of  shares  '000	Weighted  average  exercise  price  £	Weighted  average  remaining  contractual  life  months
	EMI
	£0.02	2,232	0.02	47	2,232	0.02	47
	£0.05	2,779	0.05	59	-	-	-
	£0.06	9,440	0.06	67	-	-	-
		14,451	0.05	62	2,232	0.02	47
	Unapproved
	£0.02	1,116	0.02	47	1,116	0.02	47
	£0.05	554	0.05	59	-	-	-
	£0.06	13,805	0.06	67	-	-	-
	£0.11	25,698	0.11	73	-	-	-
		41,173	0.09	70	1,116	0.02	47

During the year ended 26 March 2017, the market price of ordinary shares in the Company ranged from £0.1525 (2016: £0.11) to £0.2235 (2016: £0.2275). The share price as at 26 March 2017 was £0.1788 (2016: £0.1743).

The fair value of the options is estimated at the date of grant using a Black-Scholes valuation model.

Expected life of options used in the model is based on management's best estimate, for the effects of non-transferability, exercise restrictions and behavioural considerations.

Expected volatility was determined by calculating the historical 90 days volatility of the Group's share price over the previous 180 days. The inputs to the Black Scholes model were as follows:

		Year  ended  26 March  2017	Year  ended  27 March  2016
	Weighted average expected life	3 years	3 years
	Weighted average exercise price	17.75 to 18.25   pence	11  pence
	Risk free rate	0.50%	0.50%
	Expected volatility	32.1% to 40.0%	66.8%

18	SHARE BASED PAYMENTS (continued)

The Fulham Shore SIP

The Fulham Shore SIP was introduced during the year ended 27 March 2015. Outstanding ordinary shares of 1 pence each granted under The Fulham Shore SIP as at 26 March 2017 are as follows:

		Year  ended  26 March  2017  '000	Year  ended  27 March  2016  '000
	At the beginning of the year	591	-
	Granted during the year (Free Shares)	-	591
	At the end of the year	591	591

For the year ended 26 March 2017
		SIP shares outstanding			SIP shares exercisable
	Range of exercise prices	Number  of  shares  '000	Weighted  average  exercise  price  £	Weighted  average  remaining  contractual  life  months	Number  of  shares  '000	Weighted  average  exercise  price  £	Weighted  average  remaining  contractual  life  months
	Nil	591	-	97	591	-	97
		591	-	97	591	-	97

18	SHARE BASED PAYMENTS (continued)

For the year ended 27 March 2016
		SIP shares outstanding			SIP shares exercisable
	Range of exercise prices	Number  of  shares  '000	Weighted  average  exercise  price  £	Weighted  average  remaining  contractual  life  months	Number  of  shares  '000	Weighted  average  exercise  price  £	Weighted  average  remaining  contractual  life  months
	Nil	591	-	109	591	-	109
		591	-	109	591	-	109

The fair value of the SIP shares is estimated at the date of grant using a Black-Scholes valuation model.

Expected life of SIP shares used in the model is based on management's best estimate, for the effects of non-transferability, exercise restrictions and behavioural considerations.

Expected volatility was determined by calculating the historical 90 days volatility of the Group's share price over the previous 180 days. The inputs to the Black Scholes model were as follows:

		Year  ended  26 March  2017	Year  ended  27 March  2016
	Weighted average expected life	-	3 years
	Weighted average exercise price	-	Nil pence
	Risk free rate	-	0.50%
	Expected volatility	-	68.8%

Warrants

Outstanding share warrants in the Company to acquire ordinary shares of 1 pence each as at 26 March 2017 are as follows:

		26 March  2017  '000	27 March  2016  '000
	At the beginning of the year	1,116	1,116
	Exercised during the year	(1,116)	-
	At the end of the year	-	1,116

19

NOTE TO CASH FLOWS STATEMENTS

			Group		Parent
			Year  ended  26 March  2017	Year  ended  27 March  2016	Year  ended  26 March  2017	Year  ended  27 March  2016
			£'000	£'000	£'000	£'000
	Reconciliation of net cash flows from operating activities
	Profit/(loss) before taxation		1,144	423	(583)	(899)
	Adjustments
	Finance income		(1)	(4)	(261)	(1)
	Finance costs		135	88	209	77
	Depreciation and amortisation		3,269	2,772	20	11
	Loss on disposal of fixed assets		2	-	-	-
	Share based payments expense		631	639	199	191
	Cost of acquisition		26	405	-	-
	Operating cash flows before movements in working capital		5,206	4,323	(416)	(621)
	Increase in inventories		(365)	(213)	-	-
	(Increase)/decrease in trade and other receivables		(1,166)	131	19	135
	Increase in trade and other payables		6,866	27	188	542
	Cash generated from/(used in) operations		10,541	4,268	(209)	56
	Income taxes paid		(268)	(550)	-	-
	Net cash flow from operating activities		10,273	3,718	(209)	56

19	NOTE TO CASH FLOWS STATEMENTS (continued)

		Group		Parent
		Year  ended  26 March  2017	Year  ended  27 March  2016	Year  ended  26 March  2017	Year  ended  27 March  2016
		£'000	£'000	£'000	£'000
	Cash flow from acquisition of subsidiaries
	Consideration paid on acquisition	(350)	(6,184)	-	(6,184)
	Cash and cash equivalents acquired with subsidiaries	-	340	-	-
	Cost of acquisition of subsidiary	(26)	(405)	-	(405)
	Net cash flow from acquisition of subsidiaries	(376)	(6,249)	-	(6,589)

20	COMMITMENTS UNDER OPERATING LEASES

The Group had aggregate minimum lease payments under non-cancellable operating leases which fall due as follows:

		Group		Parent company
		26 March  2017  £'000	27 March  2016  £'000	26 March  2017  £'000	27 March  2016  £'000
	Land and buildings
	within one year	4,685	3,367	136	2
	in two to five years	17,779	12,535	397	-
	after five years	41,478	29,772	-	-
		63,942	45,674	533	2
	Others
	within one year	21	23	-	-
		21	23	-	-
		63,963	45,697	533	2

Included above are certain annual lease commitments relating to a subsidiary company that have been guaranteed by the parent company.

Operating lease payments for land and buildings represent rent payable by the Group for a restaurant property. Leases either negotiated as a new lease or acquired through lease assignment have an average term of 20 years and rentals are fixed for an average of 5 years.

21	CAPITAL COMMITMENTS

The Group capital expenditure contracted for but not provided in the financial statements as follows:

		Group		Parent company
		26 March  2017  £'000	27 March  2016  £'000	26 March  2017  £'000	27 March  2016  £'000
	Committed new restaurant builds	3,692	1,928	-	-

22         RELATED PARTY DISCLOSURES

Other related party transactions

During the period, the Group provided restaurant management or operation services to the following companies in which DM Page and NAG Mankarious are directors and shareholders:

	Amounts invoiced (including VAT)	Group		Parent company
		Year  ended  26 March  2017	Year  ended  27 March  2016	Year  ended  26 March  2017	Year  ended  27 March  2016
		£'000	£'000	£'000	£'000
	Bukowski Limited	(3)	29	-	-
	Wild Food Ideas Limited	12	19	-	-
		9	48	-	-

	Amounts outstanding at year end	Group		Parent company
		26 March  2017  £'000	27 March  2016  £'000	26 March  2017  £'000	27 March  2016  £'000
	Bukowski Limited	1	10	-	-
	Wild Food Ideas Limited	1	3	-	-
		2	13	-	-

22	RELATED PARTY DISCLOSURES (continued)

During the period, the Group was invoiced £98,000 (2016: £73,000) for the services of NJ Donaldson and a further £Nil (2016: £16,000) for corporate finance advisory services by London Bridge Capital Partners LLP, a company in which NJ Donaldson is a director, and the balance outstanding at 26 March 2017 was £33,000 (2016: £Nil).

During the period, the Group was invoiced £161,000 (2016: £14,000) for franchise fees and products by Bukowski Limited, a company in which NAG Mankarious is a director and DM Page and NAG Mankarious are shareholders. The balance outstanding at 26 March 2017 was £21,000 (2016: £14,000).

During the period, the Group was invoiced £643,000 (2016: £480,000) for restaurant management services by Room 307 Limited, a company in which NAG Mankarious and NCW Wong are directors and DM Page, NAG Mankarious and NCW Wong are shareholders. The balance outstanding at 26 March 2017 was £299,000 (2016: £45,000).

During the period the Group was invoiced £128,000 (2016: £77,000) for information technology services by Restaurants IT Limited, a company in which NCW Wong is a director and DM Page, NAG Mankarious and NCW Wong are shareholders. The balance outstanding at 26 March 2017 was £63,000 (2016: £19,000).

Transactions between the Company and its subsidiaries

Transactions between the Company and its subsidiaries, which are related parties, have been eliminated on consolidation. During the year, the Company provided restaurant management services to the following subsidiaries:

	Amounts invoiced (including VAT)			Parent company
				Year  ended  26 March  2017	Year  ended  27 March  2016
				£'000	£'000
	FM98 LTD Limited			-	90
	10DAS Limited			49	-
	The Real Greek Food Company Limited			624	450
	Franco Manca 2 UK Limited			794	421
				1,467	961

22	RELATED PARTY DISCLOSURES (continued)

During the year the Company also loaned amounts to the following subsidiaries:

	Amounts loaned/(repaid)			Parent company
				Year  ended  26 March  2017	Year  ended  27 March  2016
				£'000	£'000
	FM98 LTD Limited			-	(1,380)
	10DAS Limited			324	86
	The Real Greek Food Company Limited			(1,098)	(1,894)
	Franco Manca 2 UK Limited			3,326	4,605
				2,552	1,417

	Amounts outstanding at period end			Parent company
				26 March  2017  £'000	27 March  2016  £'000
	FM98 LTD Limited			-	-
	10DAS Limited			902	66
	The Real Greek Food Company Limited			(2,190)	(1,080)
	Franco Manca 2 UK Limited			7,072	4,155
				5,784	3,141

The Company is a legal guarantor and a party to an agreement in which 10DAS Limited, a subsidiary company, entered into a new lease to acquire a restaurant space. The total potential aggregate minimum lease payments under this guarantee at the end of the period were £1,587,000 (2016: £1,712,000). This commitment is included in the Group disclosure in note 20.

23         ACQUISITION OF FM111 LIMITED

On 25 July 2016, the Group acquired the entire issued share capital of FM111 Limited for a consideration of £350,000 in cash.

The fair values allocated to the assets and liabilities acquired as at the date of the acquisition are as follows:

		25 July  2016  £'000
Property, plant and equipment		350
Total identifiable net assets		350
Goodwill on acquisition		-
Total consideration		350

Cost of acquisition

The costs of acquiring FM111 Limited, totalling £26,000, have been recognised in the consolidated statement of comprehensive income.

Results of the accounting acquiree

The results of the accounting acquiree have been included in the consolidated statement of comprehensive income since the acquisition date and has not generated any revenue or profit or loss for the period. If the accounting acquiree had been a member of the Group from the beginning of the period, it would not have generated any revenue or profit or loss for the period.

24         SUBSEQUENT EVENTS

On 31 March 2017, the Group amended and restated its revolving credit facility agreement of £6,000,000 with HSBC Bank PLC by increasing the facilities to £14,250,000 and extending for a term of four years. On the same date, the Group's overdraft facility was increase to £750,000 and renewed for a year.

 

END

 

 

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