Final Results

RNS Number : 2251T

Fulham Shore PLC (The)

21 July 2022

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 27 March 2022.

Highlights - Year ended 27 March 2022

• Revenue increased 105% to £82.7m (2021: £40.3m) with pandemic related trading restrictions implemented by the UK Government which were completely lifted in mid July 2021; these had been in place throughout most of the previous financial year

• Increasing number of customers served by the Group gathering momentum towards the end of the year

• Six new Franco Manca pizzeria and four new The Real Greek restaurants opened during the year ended 27 March 2022 in the UK (2021: two Franco Manca pizzeria and one The Real Greek restaurant)

• Entered into first Franco Manca franchise agreement for Greece, with two new Franco Manca pizzeria opened under franchise (2021: none)

• Total restaurants operated by the Group as at 27 March 2022 were 82 (2021:72) in the UK and 84 (2021:72) globally

• Headline EBITDA* of £20.3m (2021: £9.0m) and Adjusted Headline EBITDA* of £12.4m excluding IFRS 16 (2021: £1.9m)

• EBITDA* of £19.5m (2021: £8.7m) and Adjusted EBITDA* of £11.4m excluding IFRS 16 (2021: £1.6m)

• Headline operating profit of £9.0m (2021: loss of £2.2m)

• Impairment charge on property, plant and equipment of £0.6m (2021: £1.0m)

• Operating profit of £6.7m (2021: loss of £4.8m)

• Profit before tax of £3.9m (2021: loss of £7.5m)

• Strong financial position with net cash excluding lease liabilities recognised under IFRS 16 as at 27 March 2022 of £4.3m (2021: net debt £3.6m), an improvement of £7.9m

• Post year end highlights:

o Seven new Franco Manca pizzeria opened across the UK, taking total to 66 Franco Manca in the UK and 68 globally

o Four more Franca Manca are being fitted out in Chichester, Hove, Lincoln and Windsor

o One new The Real Greek opened and one closed due to a lack of return to pre-pandemic footfall in the retail leisure park, taking total to 23 The Real Greek in the UK

o Two new The Real Greek under construction in Solihull and Gloucester Quays

o 16 further sites are in solicitors' hands, extending the Group's strong opening pipeline

o Net cash (excluding lease liabilities recognised under IFRS 16) as at 19 July 2022 was £5.1m

o Group continues to trade in line with management expectations in Q1 of FY2023

The above numbers are for continuing operations.

* Definition of Headline EBITDA, Adjusted Headline EBITDA and EBITDA and Adjusted EBITDA can be found in the Financial Review.

David Page, Executive Chairman at The Fulham Shore commented:

"Fulham Shore delivered a very strong performance with revenue more than doubling against the prior year, reflecting the quality of our two restaurant businesses as well as the easing of pandemic-related trading restrictions.

The Group continued to make excellent strategic progress, investing in new restaurants across the UK and creating jobs. During the year we opened 10 new restaurants across Franco Manca and The Real Greek and signed an exciting franchise agreement for Franco Manca in Greece. We have continued this momentum in the current year to date and have an excellent pipeline of new sites as we continue to grow our two outstanding restaurant businesses.

Whilst the first quarter of the year has been characterised by increasing pressures on the UK consumer, our restaurants remain crowded with customers seeking a great experience, quality food, and importantly outstanding value. We will always aim to keep our prices low, driving high customer numbers per site and making for fun, atmospheric restaurants, as well as motivated employees. These key ingredients underpin the Board's confidence in our continued growth."

For further information, please contact:

The Fulham Shore PLC	www.fulhamshore.com
David Page / Nick Wong	Via Hudson Sandler
Singer Capital Markets (Nominated Adviser & Broker) Shaun Dobson / James Moat / Kailey Aliyar	+44 (0) 20 7496 3000
Hudson Sandler - Financial PR Alex Brennan / Lucy Wollam	fulhamshore@hudsonsandler.com Telephone: 020 7796 4133

CHAIRMAN'S STATEMENT

Introduction

Over the past two years since March 2020, COVID-19 has had an unprecedented impact on UK society and on the hospitality sector in particular.

We believe that we are one of the success stories emerging from this difficult period. Led by our experienced Board and senior management team, we were able to pivot our two businesses to respond to our customers' preferences and operate within government safety guidelines. We are now operating a greater number of restaurants than two years ago.

All our employees worked tirelessly during those two years to keep our businesses going and, whenever we were allowed to open, our customers chose to come back to us in great numbers.

We remained cash flow positive and viable during all the lockdown periods, and as can be seen from our consolidated cashflow statement, we have turned from a net debt position two years ago to a positive net cash position now.

The Group has emerged stronger than ever from the last two years of turmoil.

Financial year ended 27 March 2022

The year ended 27 March 2022 began with some government restrictions still in place but come mid July 2021 the Group's restaurants were allowed to trade as normal. Trading was impacted again in December 2021 and January 2022 by the government's working from home advice, however we benefited from support measures including lower VAT rates and business rates relief during the year. The Group's revenue for the year ended 27 March 2022 was £82.7m, up 105% from last year's £40.3m last year and up 20.6% from £68.6m for the year ended 29 March 2020.

The Group remained cash flow positive during the financial year. Net cash, excluding lease liabilities recognised under IFRS 16, as at 27 March 2022 was £4.3m. This was a positive swing of £7.9m during the financial year from a net debt position of £3.6m in March 2021 and an even bigger change, of some £13.8m, from the net debt position of £9.5m in March 2020.

Franco Manca traded encouragingly throughout the year and is now serving record numbers of well over 100,000 customers each week. More than 310,000 customers are registered to the Franco Manca loyalty app, an increase of almost 50% compared to the prior year.

The Real Greek performed even more strongly, helped by some fantastic new openings which increased the business' profile throughout the UK. These included two new restaurants in Manchester which opened within a few weeks of each other and quickly became amongst the Group's strongest performing Real Greek sites by revenue.

Fulham Shore's financial year to 27 March 2022 was underpinned by the steadily rising number of customers per week.

Current trading and outlook

As at 20 July 2022, the Group operated 89 restaurants. We aim to have around 100 locations by the spring of 2023, including the 18 new sites we plan to open in the current financial year to March 2023.

We are now regularly taking over £2m per week in net group revenues.

With help of the return of overseas tourists, the disparity between suburban and regional towns versus city centre locations has narrowed with some city centre locations returning to comparatively 'normalised' patterns. For instance, our St Paul's and Covent Garden Franco Manca sites are generating record weekly sales thanks to UK and overseas tourists, more than making up for any reduction in office staff customers at these locations.

In the three months since the beginning of our current financial year, we have continued to trade well at Headline EBITDA level, in line with management expectations.

Market overview

Analysts believe that the number of casual dining outlets across the UK restaurant market could have contracted by as much as 17% over the last two years.

The contraction of retail space has resulted in over 14% of the high street retail space being vacant. CVAs and closures that have ensued across the restaurant sector have enabled both of our businesses to obtain sites at favourable rent levels.

We are benefiting from this by taking over not only some former restaurants but also some former retail locations. The cost to convert the latter sites is higher as they don't have extract systems, toilets, utility supply capacity, etc., but they are sometimes the most prominent locations within towns and therefore the turnover they contribute to the Group is commensurately higher.

Of the seven new Franco Manca openings in the last few months, three sites were vacated by restaurant businesses, three by retail businesses and one by a bank. Of the last five new The Real Greek opened, all five sites were vacated by restaurant businesses. Each opening provides jobs not only to those in hospitality but also the UK building industry.

Medium term

The UK economy and consumer spending are predicted to enter a period of turbulence in the coming months. Recent market analysis has detailed a shift in consumer spending to experiences and social outings rather than clothing or big-ticket items. We keep our prices at, or sometimes below, a basket of our competitors' menus. We believe our customers approve of this particularly as household incomes become increasingly squeezed. As a result, with our low menu price points, we have not seen any shift in customer demand.

With the 17% reduced supply capacity of UK casual dining restaurant site numbers, we expect a continuing demand for successful restaurant operators. Our aim is to keep prices across both Franco Manca and The Real Greek at a level that presents both propositions as a viable financial alternative to eating at home, at least once a week.

We still source our quality ingredients from local suppliers where possible and we have motivated teams of incentivised staff despite a tight labour market.

Property

Landlords will continue to face an uphill task over the next few years and we believe rents will continue to decline under pressure from empty retail and restaurant space.

There continues to be un-let premises all around the UK in unprecedented numbers. As pointed out above by our list of recent openings, we and others will benefit from this. The vacant high street sites will be let at lower rents to smaller expanding chains and independents.

This will lead to a revitalisation of town centres - Kingston upon Thames and Peterborough are prime examples of where this is happening - helped by enlightened local planning and positive local council measures.

The normal balance of the supply and demand ratio for property sites alongside tenants may, however, not happen for some years.

Whilst some landlords are seeing demand for London West End areas increase, driven by the return of tourists and the cheap pound, others will have to wait a long time for even prime positions around the country to be taken up by good restaurant operators. We believe that this will take many years.

We have now reached agreement with all our UK based landlords regarding waivers or rent concessions over the last two years. Rent reviews that are coming due are almost all being agreed at nil increases.

As a result of static or reducing rental values, we are agreeing rates reductions on our existing and new properties.

All this should lead to maintaining or reducing the Group's property costs in percentage terms for our existing estate over the next few years. This will offset some of the impact of the energy cost inflation that we are experiencing.

The Group continues to be offered many new sites, former retail shops, former ground floor offices and former chain restaurants.

Given the improved trading and popularity of our two businesses we continue to adapt our expansion strategy for the next three years keeping in mind the number of suitable sites available and the cash generation of the Group. We are building a strong pipeline of new locations to support this opening programme.

Since the start of the new financial year to March 2023 we have opened Franco Manca in Canterbury, Kingston-Upon-Thames, Edinburgh Stockbridge, Peterborough and three in Manchester (Didsbury, King Street and Trafford Centre). We have opened one The Real Greek in Newcastle and closed the small Greek on the Street unit in Boxpark Croydon as footfall has still not recovered.

We now have 66 Franco Manca and 23 The Real Greek in the UK.

We are fitting out four new Franco Manca in Chichester, Hove, Lincoln and Windsor and two new The Real Greek restaurants in Solihull and Gloucester Quays.

From the firm foundation of our current estate, we have identified many more excellent locations in the UK for both Franco Manca and for The Real Greek.

To this end, and supported by the Group's current trading performance, a further 16 sites are in solicitors' hands.

These sites will continue our existing opening programme for this financial year and the next to March 2024, with a view to operating over 120 restaurants in the UK by the spring of 2025.

With steady expansion, this should bring our total estate to over 250 restaurants in the UK.

Franchising

Over the last few years, we have fielded many enquiries regarding opening our restaurants outside the UK.

The Board has previous experience of successful expansion outside the UK at PizzaExpress and Gourmet Burger Kitchen and has this year made investment in an experienced team to capitalise on the opportunity to establish our brands overseas.

During the financial year ended 27 March 2022, Franco Manca entered into a franchise agreement for expansion within Greece. The franchisee has plans for a minimum of six restaurants to be opened over the next three years with the first two pizzeria opened during the financial year.

The Group continues to explore a number of additional international territories where franchised restaurants could be opened, and is currently in discussions regarding territories in Europe, the Middle East, and Africa.

Dividend policy

Although we were considering putting in place a dividend policy, the impact of COVID-19 has meant that any plans for a dividend policy will be delayed until the full effects of the pandemic are over. No dividend is therefore being proposed by the Board for the year ended 27 March 2022.

Due to our strong cash generation, the Board intends to review the suitability of a dividend policy, as well as a small share buy back programme, during this financial year to March 2023.

Financing

The Group financial position continues to be healthy and its bankers, HSBC, continue to be supportive of the Group's opening programme. We have current undrawn facilities of around £15.9m. This is made up of a revolving credit facility of £17.0m, of which £1.85m is drawn and an overdraft facility of £0.75m.

During the financial year ended 27 March 2022, the Group repaid the remaining £9.3m UK Government backed CLBIL facility that supported the business during the height of lockdown uncertainty.

Net cash, excluding lease liabilities recognised under IFRS 16, as at 27 March 2022 was £4.3m (2021: net debt of £3.6m).

As at 19 July 2022, net cash (excluding lease liabilities recognised under IFRS 16) was £5.1m. Together with undrawn facilities, the Group has financial headroom of some £21m.

The Group intends to continue to fund its expansion programme primarily from operating cash flow and will utilise its existing bank facilities as and when required.

Current outlook

As we write this report the UK Government has been in disarray for a few weeks: the Prime Minister has resigned and there is increasing pressure on the UK consumer.

Our restaurants are still crowded with customers seeking a great experience and importantly value for money in the current inflationary climate.

We always aim to keep our prices low. This drives high customer numbers per site making for busy restaurants, a fun atmosphere for all, and motivated employees.

We continue to source our food ethically and where we can, locally. This combined with higher volumes in our restaurants and therefore for our suppliers has helped to mitigate some raw ingredients price rises. Together with menu inflation and successful rent reviews, the Company maintained its margin expectations for the full year.

We have invested our profits in new restaurants, creating jobs, food quality and spreading the word about our great food and prices at Franco Manca and The Real Greek.

Fulham Shore has the financial headroom to continue our controlled expansion programme with our cash balances and borrowing facilities.

We look forward with confidence to the continued growth of the Group.

FINANCIAL REVIEW

Fulham Shore's performance in the year ended 27 March 2022 is summarised in the table below:

	Year ended 27 March 2022	Year ended 28 March 2021	Change
For continuing operations	£m	£m	%

Revenue	82.7	40.3	105.2%

Headline EBITDA*	20.3	9.0	125.6%
Adjusted Headline EBITDA*	12.4	1.9	5526%
Headline operating profit/(loss)	9.0	(2.2)

EBITDA*	19.5	8.7	124.1%
Adjusted EBITDA*	11.4	1.6	612.5%
Operating profit/(loss)	6.7	(4.8)
Profit/(loss) before taxation	3.9	(7.5)
Profit/(loss) for the year	3.7	(6.3)

Basic earnings per share	0.6p	(1.1p)
Diluted earnings per share	0.6p	(1.1p)
Headline basic earnings per share	0.9p	(0.7p)
Headline diluted earnings per share	0.9p	(0.7p)

Cash flow from operating activities	24.5	9.7	152.6%
Development capital expenditure	7.8	1.7	358.8%
Net debt	80.1	74.6	7.4%
(Net cash)/Net debt (excluding lease liabilities)	(4.3)	3.6


Number of restaurants operated in the UK	No.	No.
Franco Manca	59	53	+11.3%
The Real Greek	23	19	+21.1%

	82	72	+13.9%

* Reconciliation of profit before taxation to Adjusted Headline EBITDA and Adjusted EBITDA for continuing operations:

	Year ended 27 March 2022	Year ended 28 March 2021
	£m	£m

Profit/(loss) before taxation	3.9	(7.5)
Finance costs	2.9	2.8
Depreciation and amortisation	11.3	11.1
Amortisation of brand	0.8	0.8
Exceptional costs:
- Impairment of property, plant and equipment	0.6	1.0
- Covid-19 related costs	-	0.5

EBITDA	19.5	8.7
Share based payments	0.1	0.1
Pre-opening costs	0.7	0.2

Headline EBITDA	20.3	9.0
Adjustment for rent expenses	(7.9)	(7.1)

Adjusted Headline EBITDA	12.4	1.9


EBITDA	19.5	8.7
Adjustment for rent expenses	(8.1)	(7.1)

Adjusted EBITDA	11.4	1.6

This year ended 27 March 2022 comprised 52 full weeks of trading (2021: 52 weeks).

Total Group revenue from continuing operations for the year ended 27 March 2022 increased by 105% to £82.7m from £40.3m last year. This increase was driven by the return to unrestricted trading since the middle of July 2021 versus UK Government's COVID-19 trading restrictions being in place through most of the previous financial year.

These restrictions impacted the Group in three ways:

· social distancing rules reduced the capacity available in each restaurant by as much as 40% throughout the first 16 weeks of the year ended 27 March 2022 and throughout the entire previous financial year;

· up until 12 April 2021, restaurants were ordered to stay closed to dine-in customers UK wide while some of the Group's restaurants offered takeaway, click and collect and delivery services, then until 17 May 2021, some restaurants with outdoor seating provided a restricted outdoor dining service;

· Working from home advice over December 2021 and January 2022 reduced dine in footfall.

The Group's revenues also benefited from the reduced VAT rate on food sales and certain soft drinks sales during the year ended 27 March 2022.

During the year, despite the impact of COVID-19 restrictions on the Group in the early part of the financial year, we opened six new Franco Manca pizzeria and four new The Real Greek restaurant across the UK. This takes the total restaurants operated by the Group in the UK to 82 (2021: 72) at year end.

Group Headline EBITDA and Adjusted Headline EBITDA (as defined and reconciled above) continue to be key measures for the Group as well as industry analysts as they are indicative of ongoing EBITDA of the businesses. Headline EBITDA for the year was £20.3m (2021: £9.0m), an increase of 125.6% while Adjusted Headline EBITDA for the year was £12.4m (2021: £1.9m), an increase of 552.6% on the prior year. As the impact of the lockdowns was felt at the beginning of the financial year, the Group's effective cost saving measures in both variable and fixed costs reduced the cost base of the Group.

During the year ended 27 March 2022, the Group benefited from £2.4m (2021: £10.3m) of other income which included various UK Government coronavirus support and grants. Of this amount, our staff who were furloughed or flexi furloughed benefited from £0.8m (2021: £8.5m) from the Coronavirus Job Retention Scheme while the remaining grants were applied against fixed costs of the businesses. In addition, the Group benefited from business rates holiday on restaurant properties. The Group is also very grateful for the continued support of many of our landlords who offered rent concessions during the affected periods.

Group depreciation and amortisation, excluding amortisation of the Franco Manca brand, increased 1.9% to £11.4m (2021: £11.1m) following the number of new restaurants opened during the year and the previous year. The Group incurred one off costs in the year of £0.6m (2021: £1.0m) from impairment charges for one restaurant (2021: 5) which was previously impacted by COVID-19 during the year and has not recovered at the same rate as other Group restaurants since the return to normal trading. The Group's four restaurants, that were subject of impairment charges in the previous financial year, located in Debenhams department stores prior to the COVID-19 pandemic are still trading but under short term leases or tenancies at will while negotiations with the ultimate landlords continue for a longer-term solution. In the year ended 27 March 2022, the Group did not incur any exceptional costs (2021: £0.5m) relating to the temporary closure of the restaurants. These one off costs, have been offset by the positive Headline EBITDA, leading to an increase in adjusted operating profit to £6.7m (2021: loss of £4.8m).

With our new openings, we have invested £0.7m (2021: £0.2m) in pre-opening costs. Finance costs have increased to £2.9m (2021: £2.8m). The Group's gross bank debt decreased to £1.9m (2021: £15.9m) with net debt reduced during the year. Overall this has resulted in a profit before taxation of £3.9m (2021: loss £7.5m).

The Group's tax charge was £0.2m (2021: credit of £1.2m). The tax charge for the year was particularly low primarily due to the tax deductibility of the exercise of share options in the year as well as the recognition of the deferred tax asset on IFRS16 leases. The Group's profit after tax was £3.7m (2021: loss £6.3m).

Our basic and diluted earnings per share from continuing operations was 0.6p (2021: basic and diluted loss 1.1p) whilst Headline basic and diluted earnings per share was 0.9p (2021: basic and diluted loss per share 0.7p).

Cost inflation

During the year, weakness of Sterling against both the Euro and the US Dollar from uncertainty over Brexit, the post COVID-19 demand growth and supply crunch from the war in Ukraine and closed borders in China has continued to drive food cost inflation. Where possible, we have benefited from additional volume discounts due to our opening programme and changes in suppliers which have helped to mitigate some of the cost pressures.

We also saw a 5.6% (2021: 6.2%) increase in the Government's National Living Wage at the beginning of the financial year for employees over 25 years old. Both of our businesses have chosen to treat all staff members the same irrespective of age and therefore pay at least the National Living Wage to all employees. This positions the Group as an industry employer of choice during a challenging time for the UK hospitality industry's labour market.

The Group's other two material cost items are rent and utility costs. Rental inflation of our estate at rent review has subsided as a result of the COVID-19 impact on the commercial rental market. New leases entered by the Group have seen improved rental deals as well as longer rent frees and significant landlord contributions. During the year the Group benefited from landlord contributions totalling over £1.2m on new sites acquired. Utility cost inflation continues to be volatile as the wholesale cost of energy has been impacted by the movement of global economic adjustments and the war in Ukraine. The majority of restaurants in the Group benefit from fixed price contracts until October 2022.

During the last few months, the Group has seen significant inflation in building materials for its fitting out projects due primarily to a combination of commodity prices and supply issues. However as more of the Group's projects are existing restaurants, the reduced requirement for building materials mitigates part of this inflation. Overall average fit out costs have increased by approximately 12% compared to a year ago.

Cash flows and balance sheets

The Group's cash flow from operating activities has increased by £14.8m to £24.5m primarily as a result of a return to normal trading during the year following the impact of COVID-19 restrictions in the UK.

We invested £7.8m (2021: £1.7m), before right of use asset additions, in development capital. This was primarily in new restaurants but also included investments in outdoor dining spaces for both businesses, and investment in IT systems including further development of the Franco Manca loyalty app. As at 27 March 2022 there were 290,000 users (2021: 209,000) signed up to Franco Manca loyalty scheme, an increase of 39%. This has now grown to over 310,000 users today.

In addition, we recognised £19.7m (2021: £6.2m) right-of-use assets in relation to the 13 (2021: 3) short term leasehold properties acquired during the year for new restaurant openings. At the same time, equal and opposite additional lease liabilities were recognised on the balance sheet for £19.7m (2021: £6.2m).

Following the repayment of the Company's facility under the government backed Coronavirus Large Business Interruption Loan Scheme, on 3 November 2021, the Company completed an amendment and restatement of its revolving credit facility agreement for an increase in the amount available under its debt facility with HSBC Bank plc from £14.25m to £17.0m. Under the new arrangements, the term of the Company's revolving credit facility was also extended by 32 months from March 2022 to November 2024. The Company banking facilities with HSBC now total £17.75m including the existing £0.75m overdraft facility.

During the year ended 27 March 2022, the Company received funds on exercise of outstanding share options of £0.5m (2021: £0.5m).

During the years ended 27 March 2022 and 28 March 2021, the Group has negotiated with its landlords in order to secure support from them during the various lockdowns. Many of these landlords have been supportive and the majority of concession deals have been completed during this period. As at 27 March 2022, short term lease liabilities included £0.4m historic deferred rents (2021: £2.8m).

Resultant net cash from our activities excluding lease liabilities recognised under IFRS 16 as at 27 March 2022 was £4.3m (2021: net debt £3.6m). Since the year end, as at 19 July 2022, the Group's net cash (excluding lease liabilities recognised under IFRS 16) position improved to £5.1m.

People

During the year, the Group's key operations were within the UK. As detailed above, the Group continued to benefit from the UK Government's Coronavirus Jobs Retention Scheme and the flexible furlough of some operational staff across the Group during the first quarter of financial year when the restaurants were either temporarily closed or restricted from trading fully.

With the Group's opening programme, the Group continued to create more new jobs in its new restaurants. Although staff recruitment continues to be challenging, the impact on the Group's openings has not been as great since most of the openings are outside London and the Southeast where the impact has been more pronounced. We continue to invest in our staff through training, incentives and personal development as well as investing in a stronger people and human resource team.

During the year ended 27 March 2022, both businesses introduced a service charge on dine in bills on reopening at the beginning of the financial year. This enabled staff to participate in the service charge through a tronc scheme in each business.

Principal risks and uncertainties

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

COVID-19

The macro economic impact of the COVID-19 pandemic is uncertain, and continues to evolve, with potential disruption to financial markets including currencies, interest rates, borrowing costs and the availability of debt financing. However, the Group's financial risk management strategies seek to reduce our potential exposure in relation to these risks. During the year, the Group, as described above, extended the maturity date of the RCF facility by 32 months to November 2024.

In addition, through prudent management of costs and cashflow, the Group has built up a cash balance which further increases available financial headroom for the Group. Overall the headroom will provide a good buffer if another lockdown is introduced by the UK Government. The impact of further lockdowns or different restrictions may affect the carrying values of goodwill and/or property, plant and equipment including right of use assets. However the Group, through its learnings over the last two years, and investment in personal protective equipment, additional training and innovative systems, is prepared to respond to changing situations quickly.

Development programme

The Group's development programme is dependent on securing the requisite number of new properties at sensible rents. Despite the impact on the restaurant sector from COVID-19 and a general trend downwards on rents, the UK restaurant property market remains competitive at the right locations and rents. 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. To help mitigate potential delays as a result of more complex customs border controls post Brexit and a reduced number of road haulage drivers, the Group has increased stock levels, where possible, to allow for longer transit times and has changed some of its ingredients to UK grown ingredients.

Inflation

The impact of inflation on cost increases across food, drink and utilities can be significant. To mitigate these issues, the Group undertake alternative supplier selection, securing longer term contracts to fix pricing or purchasing negotiations taking into account benefits from volume growth arising from significant number of new openings. Utility contracts have been fixed for the majority of the Group's restaurants to October 2022.

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 combination of Brexit, new additional immigration controls and the displacement of the workforce as a result of COVID-19 has made recruitment harder. To mitigate these issues the Group has invested in its human resources team and has implemented new innovative incentive schemes designed to retain key individuals as well as enhanced training programmes.

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 Group's existing restaurant brands, value offer and constant strive towards delivering the best product and service will help the business to mitigate competitive risk.

Landlords

The Group operated four restaurants within the Debenhams estate. These restaurants are now operating on a tenancy at will or short term lease basis while negotiations with ultimate landlords continue. Therefore these individually may be at risk from closure if negotiations are not successful. The Group is actively looking for alternative locations in the vicinity of the existing restaurant.

Cyber security

The Group has been operating an online "click and collect" service, an online loyalty programme and various customer relationship management tools which rely 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.

Revenues from delivery

The Group revenues from delivery have grown during the various lockdowns. There is a risk of temporary interruption to the third party delivery service provider. The Group utilities two independent delivery platforms to mitigate downtime risk.

Allergens

The Group relies on its team members following allergen policies and procedures to ensure our customers do not suffer from inaccurate or insufficient information concerning allergens. To mitigate this risk, all restaurants are provided detailed allergen information for all foods and drink served and all staff undertake allergen training across all businesses.

Regulatory compliance

The Group is growing and the UK Government is increasing the number of areas requiring additional regulatory compliance including GDPR, ESOS and food labelling. This may increase the Group's expenditure to ensure compliance and the Group may experience a failure to comply thus leading to significant fines. The Group reviews regulatory changes on a regular basis.

Risks are formally reviewed by the Board regularly and appropriate processes are 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 complex 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 trade receivables, trade payables, accruals that arise directly from the Group's operations and property leases. 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.

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

for the year ended 27 March 2022

		Year ended 27 March 2022	Year ended 28 March 2021
	Notes	£'000	£'000

Revenue	1	82,702	40,285
Cost of sales		(51,093)	(25,227)

Gross profit		31,609	15,058

Administrative expenses		(25,039)	(27,479)
Other income	2	2,401	10,270

Headline operating profit/(loss)		8,971	(2,151)
Share based payments	18	(80)	(91)
Pre-opening costs	2	(733)	(212)
Amortisation of brand	7	(821)	(821)
Exceptional costs: - Impairment of property, plant and equipment	8	(602)	(1,013)
- COVID-19 related costs	2	-	(483)

Operating profit/(loss)	2	6,735	(4,771)
Finance income		2	10
Finance costs	4	(2,863)	(2,754)

Profit/(loss) before taxation		3,874	(7,515)

Income tax (expense)/ income	5	(211)	1,209

Profit/(loss) and total comprehensive income/(expense) for the year attributable to owners of the company		3,663	(6,306)



Earnings per share
Basic	6	0.6p	(1.1p)
Diluted	6	0.6p	(1.1p)

CONSOLIDATED AND COMPANY BALANCE SHEETS

27 March 2022

		Group		Parent company
	Notes	27 March 2022 £'000	28 March 2021 £'000	27 March 2022 £'000	28 March 2021 £'000
Non-current assets
Intangible assets	7	23,233	24,127	-	-
Property, plant and equipment	8	110,499	94,958	101	122
Investments	9	66	-	44,494	44,430
Trade and other receivables	11	672	935	4,164	9,456
Deferred tax assets	16	806	942	244	478

		135,276	120,962	49,003	54,486

Current assets
Inventories	10	2,399	1,976	-	-
Trade and other receivables	11	4,308	2,721	397	53
Cash and cash equivalents	12	6,141	12,270	63	5,797

		12,848	16,967	460	5,850

Total assets		148,124	137,929	49,463	60,336

Current liabilities
Trade and other payables	13	(20,707)	(14,177)	(2,775)	(1,994)
Borrowings	14	(6,527)	(11,639)	-	(3,730)
Income tax payable		(368)	(10)	-	-

		(27,602)	(25,826)	(2,775)	(5,724)

Net current (liabilities)/assets		(14,754)	(8,859)	(2,315)	126

Non-current liabilities
Borrowings	14	(79,702)	(75,198)	(5,821)	(12,355)
Deferred tax liabilities	16	(1,455)	(1,448)	-	-

		(81,157)	(76,646)	(5,821)	(12,355)

Total liabilities		(108,759)	(102,472)	(8,596)	(18,079)

Net assets		39,365	35,457	40,867	42,257

Equity
Share capital	17	6,348	6,191	6,348	6,191
Share premium		9,376	9,078	9,376	9,078
Merger relief reserve		30,459	30,459	30,459	30,459
Reverse acquisition reserve		(9,469)	(9,469)	-	-
Retained earnings		2,651	(802)	(5,316)	(3,471)

Total Equity		39,365	35,457	40,867	42,257

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

for the year ended 27 March 2022


	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

At 29 March 2020	5,736	6,911	30,459	(9,469)	5,123	38,760

Loss for the year	-	-	-	-	(6,306)	(6,306)

Total comprehensive income	-	-	-	-	(6,306)	(6,306)

Transactions with owners
Share based payments	-	-	-	-	91	91
Deferred tax on share based payments	-	-	-	-	290	290
Issue of share capital (net of costs)	360	1,728	-	-	-	2,088
Exercise of share options	95	439	-	-		534


Total transactions with owners	455	2,167	-	-	(5,925)	(3,303)


At 28 March 2021	6,191	9,078	30,459	(9,469)	(802)	35,457

Profit for the year	-	-	-	-	3,663	3,663

Total comprehensive income	-	-	-	-	3,663	3,663

Transactions with owners
Share based payments	-	-	-	-	80	80
Deferred tax on share based payments	-	-	-	-	(290)	(290)
Exercise of share options	157	298	-	-	-	455

Total transactions with owners	157	298	-	-	3,453	3,908


At 27 March 2022	6,348	9,376	30,459	(9,469)	2,651	39,365

COMPANY STATEMENT OF CHANGES IN EQUITY

for the year ended 27 March 2022

	Share Capital £'000	Share Premium £'000	Merger Relief Reserve £'000	Retained Earnings £'000	Total Equity £'000

At 29 March 2020	5,736	6,911	30,459	(2,904)	40,202

Loss for the year	-	-	-	(948)	(948)

Total comprehensive income for the year	-	-	-	(948)	(948)

Transactions with owners
Share based payments	-	-	-	91	91
Deferred tax on share based payments	-	-	-	290	290
Issue of share capital (net of costs)	360	1,728	-	-	2,088
Exercise of share options	95	439	-	-	534

Total transactions with owners	455	2,167	-	381	3,003


At 28 March 2021	6,191	9,078	30,459	(3,471)	42,257

Loss for the year	-	-	-	(1,635)	(1,635)

Total comprehensive income for the year	-	-	-	(1,635)	(1,635)

Transactions with owners
Share based payments	-	-	-	80	80
Deferred tax on share based payments	-	-	-	(290)	(290)
Exercise of share options	157	298	-	-	455

Total transactions with owners	157	298	-	(210)	245



At 27 March 2022	6,348	9,376	30,459	(5,316)	40,867

CONSOLIDATED AND COMPANY CASH FLOW STATEMENT

for the year ended 27 March 2022

		Group		Parent company
	Notes	Year ended 27 March 2022	Year ended 28 March 2021	Year ended 27 March 2022	Year ended 28 March 2021
		£'000	£'000	£'000	£'000

Net cash flow from/(used in) operating activities	19	24,453	9,705	(1,015)	(286)

Investing activities
Acquisition of property, plant and equipment		(7,799)	(1,679)	(7)	-
Acquisition of intangible assets		(2)	(28)	-	-
Acquisition of investments		(66)	-	-	-
Loan repaid by/(to) subsidiary undertakings		-	-	9,028	(1,850)

Net cash flow (used in)/from investing activities		(7,867)	(1,707)	9,021	(1,850)


Financing activities
Proceeds from issuance of new ordinary shares (net of expenses)		455	2,622	455	2,622
Capital received from bank borrowings		-	11,750	-	11,750
Capital repaid on bank borrowings		(14,000)	(7,440)	(14,000)	(7,440)
Principal element of lease payments		(6,309)	(1,972)	-	-
Interest received		2	10	242	478
Interest paid		(2,863)	(2,754)	(437)	(507)

Net cash flow (used in)/from financing activities		(22,715)	2,216	(13,740)	6,903

Net increase in cash and cash equivalents		(6,129)	10,214	(5,734)	4,767

Cash and cash equivalents at the beginning of the year	12	12,270	2,056	5,797	1,030

Cash and cash equivalents at the end of the year	12	6,141	12,270	63	5,797

ACCOUNTING POLICIES

GENERAL INFORMATION

The Fulham Shore PLC is a public company limited by shares 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 Kingdom. 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 27 March 2022 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 28 March 2021 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. The financial statements for the year ended 27 March 2022 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 20 July 2022.

The accounting year for the Group runs to a Sunday within seven days of 31 March each year which will be a 52 or 53 week period. The year ended 27 March 2022 was a 52 week period, with the comparative year to 28 March 2021 being a 52 week period.

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

The financial statements have been prepared under the historical cost convention and, in accordance with UK-adopted International Accounting Standards and applicable law.

The financial statements for the year ended 27 March 2022 are presented in Sterling which is also the functional currency of the Group. The functional currency is the 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.

NEW STANDARDS

There following new and amended accounting standards were effective for the year ended 27 March 2022:

Amendments to IFRS 9, IAS39, IFRS 7, IFRS 4 and IFRS 16 - Interest rate benchmark reform phase 2 (effective for annual periods beginning on or after 1 January 2021)

These amendments provide accounting relief when changes in the basis for determining contractual cash flows result directly from IBOR reform, and a series of exemptions from certain aspect of the hedge accounting requirements. It also provides relief for lease modification. These amendments have had no impact on the financial statements.

Amendment to IFRS 16 - Covid-19-related rent concessions beyond 30 June 2021 (effective for accounting periods commencing on or after 1 January 2021)

This amendment extends the time period over which the practical expedient introduced by earlier amendments is available for use to 30 June 2022. The amendment has had no impact on retained earnings in the financial earnings in the financial statement in the year.

NEW STANDARDS THAT ARE NOT YET EFFECTIVE

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

IFRS 3 (Amendment) Reference to the conceptual framework

IAS 16 (Amendment) Property, plant and equipment: proceeds before intended use

IAS 37 (Amendment) Cost of fulfilling a contract

IAS 1 (Amendment) Classification of liabilities as current or non-current

IAS 1 (Amendment) Disclosure of accounting policies

IAS 8 (Amendment) Definition of accounting estimates

IAS 12 (Amendment) Deferred tax related to assets and liabilities arising from a single transaction

IFRS 17 (Amendment) Insurance contracts

The Directors anticipate that the adoption of these amendments in Standards as appropriate in future years will have no material impact on the financial statements of the Group with the exception of IAS 12 (Amendment). This will impact the Group with recognition of deferred tax on IFRS 16 balances and clarity over treatment of new leases post transition. The Group estimate the deferred tax asset would increase to £1.5m from £0.5m as at 27 March 2022 if the standard were effective. The Group has decided not to early adopt the amendment.

GOING CONCERN

The consolidated financial statements have been prepared on a going concern basis. The Board has reviewed the risk analysis set out in the Financial Review, the Group's net current liabilities position as at 27 March 2022, the forecasts for the next financial year, other longer term plans, financial resources including undrawn but available short term and long term facilities described in note 14, the availability of future equity funding if required and operational cash flow where cash from revenues are received within 7 days.

At the end of financial year ended 27 March 2022, the Group was trading within its banking covenants and significantly within its debt facilities.

The Group's net current liabilities position at the year end has increased from the prior year as the Group's trading has returned to normal trading by the year end and cash balances built up in the previous financial year have been applied to the repayment of the Group's CLBIL loan. Net current liabilities can be covered by day to day operational cash flow, where revenues are normally received in cash within 7 days of recognition, short term overdraft facilities and utilising undrawn long term borrowing facilities. The main long term revolving credit facility was extended during the financial year and does not require repayment before November 2024,

COVID-19 and government action over the last two years have had a significant impact on trading. The forecasts used for going concern analysis has been prepared based on normal trading without COVID-19 restrictions similar seasonally to the year ended March 2020. The Directors have reviewed the rapidly evolving situation relating to COVID-19 and do not believe significant closures will be repeated. As detailed in the Financial Review, various mitigating actions were taken by the Board during the various national lockdowns which can be redeployed if there are any future lockdowns.

The Directors have reviewed the Group's net current liabilities position, forecasts, sensitivity to any further impact of COVID-19, availability of potential equity funding, other longer term plans and the financial resources and bank facilities in place that are available to deal with the business risks of the Company and the Group along with the significant covenant headroom. The Group had net funds, before lease liabilities recognised under IFRS 16, as at 19 July 2022 of £5.1m thus having headroom of some £21m available. Additionally, the Group's opening programme can be adjusted fluidly to take account of business risks and the wider economic risks. The Directors feel well placed to manage the business risks successfully within the present financial arrangements.

The Directors have a reasonable expectation that the Company and the Group have adequate resources to continue in operational existence for the foreseeable future, being a period of at least twelve months from the approval of these financial statements. Thus, they continue to adopt the going concern basis of accounting in preparing the annual 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 was the reverse of this. Accordingly the business combination was accounted for 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. Any costs directly attributable to the business combination are expensed to the Statement of Comprehensive Income. 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 identifiable 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 profit or loss and is not subsequently reversed. Goodwill is allocated to an associated operating segment made up of a group of cash generating units for the purpose of impairment testing. Each of these groups of cash generating units represents the Group's investment in a subsidiary which is equivalent to an operating segment of the Group. On disposal of a subsidiary the attributable amount of goodwill is included in the determination of the profit or loss on disposal.

Trademarks and licences

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 were based on management forecasts for the subsequent four years period. The estimated useful lives range from 4 to 20 years, amortised 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 were based on management forecasts for the subsequent 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 on a straight line basis 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.

Right-of-use assets arising from the Group's lease arrangements are depreciated over the earlier of the useful life or their reasonably certain lease term, as determined under the Group's leases policy.

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 which have separately identifiable cash flows, known as cash generating units, are grouped into their operating segment. If the recoverable amount of a group of cash generating units is less than the carrying amount of that group's assets, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the group of cash generating units and then to the other assets of the group pro-rata on the basis of the carrying amount of each asset in the group. 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.

IMPAIRMENT OF ASSETS (continued)

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, predominantly an individual restaurant for the purposes of property, plant and equipment, 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.

OTHER INVESTMENTS

Other investments comprising debt and equity instruments are recognised and derecognised on a trade date where a purchase or sale of an investment is under a contract whose terms require delivery of the investment within the timeframe. Other investments are initially measured at fair value, including transaction costs and subsequently remeasured as described below.

Debt securities that are held for collection of contractual cash flows where those cash flows represent solely payments of principal and interest are measured at amortised cost using the effective interest method, less any impairment. Debt securities that do not meet the criteria for amortised cost are measured at fair value through profit and loss.

Equity securities are classified and measured at fair value through other comprehensive income, there is no subsequent reclassification of fair value gains and losses to profit or loss following derecognition of the investment.

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.

FINANCIAL INSTRUMENTS

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

TRADE AND OTHER RECEIVABLES

Trade receivables represent amounts owed by customers where the right to payment is conditional only on the passage of time and are recorded at amortised cost. Other receivables represent amounts owed by third parties and intra group balances in the parent company where the right to payment is conditional on the passage of time and the occurrence of certain events. The carrying value of all trade and other receivables recorded at amortised cost is reduced by allowances for lifetime estimated credit losses other than expected credit losses on group balances which are based on expected 12 month credit losses. Estimated future credit losses are first recorded on the initial recognition of a receivable and are based on the ageing of the receivable balances, historical experience and forward looking considerations. Individual balances are written off when management deems them not to be collectible.

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 excess of the consideration received over the nominal value of the shares issued to the merger relief reserve.

REVERSE ACQUISITION RESERVE

Reverse acquisition 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 to be recognised as a separate component of equity.

RETAINED EARNINGS

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

NON-CONTROLLING INTERESTS

Non-controlling interests in the net assets of consolidated subsidiaries are identified separately from the Group's equity therein. Non-controlling interests consist of the amount of those interests at the date of the original business combination and the non-controlling shareholder's share of changes in equity since the date of the combination. Total comprehensive income is attributed to non-controlling interests even if this results in the non-controlling interests having a deficit balance.

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 profit or loss.

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.

TAXATION (continued)

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

When the Group leases an asset, a right of use asset is recognised for the leased item and a lease liability is recognised for any lease payments to be paid over the lease term at the lease commencement date. The right of use asset is initially measured at cost, being the present value of the lease payments paid or payable, plus any initial direct costs incurred in entering the lease and less any lease incentives received. Right of use assets are depreciated on a straight-line basis from the commencement date to the earlier of the end of the asset's useful life or the end of the lease term. The lease term is the non-cancellable period of the lease plus any periods for which the Group is reasonably certain to exercise any extension options. The useful life of the asset is determined in a manner consistent to that for owned property, plant and equipment. If right of use assets are considered to be impaired, the carrying value is reduced accordingly. Lease liabilities are initially measured at the value of the lease payments over the lease term that are not paid at the commencement date and are discounted for the portfolio of leases using the incremental borrowing rate of the Group as the rate implicit in individual leases is not readily ascertainable. After initial recognition, the lease liability is recorded at amortised cost using the effective interest method. It is remeasured when there is a change in future lease payments arising from a change in an index or rate or if the Group's assessment of the lease term changes; any changes in the lease liability as a result of these changes also results in a corresponding change in the recorded right of use asset.

The Group has elected not to recognise right of use assets and lease liabilities for short-term leases of machinery that have a lease term of 12 months or less and leases of low-value assets, including IT equipment. The Group recognises the lease payments associated with these leases as an expense on a straight-line basis over the lease term.

Covid-19 related rent concessions

The Group has applied COVID-19 related rent concessions - amendment to IFRS16 leases. The Group applies the simplified accounting treatment not to assess whether eligible rent concessions that are a direct consequence of the COVID-19 pandemic are lease modifications. The Group applies the practical expedient consistently to contracts with similar characteristics and in similar circumstances. For rent concession in leases to which the Group chooses not to apply the practical expedient, or that do not qualify for the practical expedient, the Group assesses whether there is a lease modification.

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

The Group's revenue is derived from the sale of food and drink in its restaurants, or as deliveries or takeaways. The performance obligation is fulfilled when control is transferred to the customer at the point of sale. All sales are settled at the point of sale and the group does not, therefore, have any contract assets or liabilities. Revenue is recognised net of VAT, discounts, returns and deferred revenue for the Group's loyalty scheme's unsatisfied performance obligations .

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.

EXCEPTIONAL COSTS

The Group discloses certain financial performance information excluding exceptional costs. This presentation allows a better understanding of the underlying trading performance to the users of the accounts. Exceptional costs are identified by virtue of the nature, magnitude and expected frequency of the event giving rise to them through consideration of quantitative and qualitative factors including where related costs or income are current disclosed. Examples of exceptional costs that meet the above definition and which have been presented as exceptional costs include, but are not restricted to: impairment of property, plant and equipment, changes in fair value of investment, costs of acquisition, one off COVID-19 related costs.

GOVERNMENT GRANTS

Grants from the government are recognised at their fair value where there is a reasonable assurance that the grant will be received and the group will comply with all attached conditions. Government grants relating to costs are deferred and recognised in the statement of comprehensive income over the period necessary to match them with the costs that they are intended to compensate.

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 ESTIMATES AND JUDGEMENTS

The preparation of financial statements in conformity with UK-adopted international accounting standards 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:

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

The Group tests goodwill for impairment on an annual basis or more frequently if there are indications that amounts may be impaired. For property, plant and equipment, including right of use assets and intangible assets, other than goodwill, the Group tests for impairment when there is an indication of impairment and for assets previously 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 (see notes 7 and 8). Such an analysis includes an estimation of the future anticipated results and cash flows, annual growth rates, whether short term or long term, future capital expenditures and the appropriate discount rates (see notes 7 and 8 for key assumptions). Changes in the estimates which underpin the Group's forecasts and selection of appropriate discount rate could have an impact on the value in use of the cash generating units and group of cash generating units being tested.

Previously impaired assets will be reversed should the original conditions for impairment change and there are strong indicators supporting the estimated future cash flows from its use and eventual disposal of the assets.

Finite lived intangible assets

Intangible assets include amounts spent by the Group acquiring brands and the costs of purchasing and/or developing computer software.

Where intangible assets are acquired through business combinations and no active market for the assets exists, the fair value of these assets is determined by discounting estimated future net cash flows generated by the asset. Estimates relating to the future cash flows and discount rates used may have a material effect on the reported amounts of finite lived intangible assets.

The useful life over which intangible assets are amortised depends on management's estimate of the period over which economic benefit will be derived from the asset. Reducing the useful life will increase the amortisation charge in the consolidated income statement. Useful lives are periodically reviewed to ensure that they remain appropriate. For a one year reduction in useful life of the brand, an additional £91,000 of amortisation would be charged to the income statement.

Property, plant and equipment

Property, plant and equipment represents 74.9% (2021: 68.8%) of the Group's total assets; estimates and assumptions made may have a material impact on their carrying value and related depreciation charge. The depreciation charge for an asset is derived using estimates of its expected useful life and expected residual value, which are reviewed periodically. Increasing an asset's expected life or residual value would result in a reduced depreciation charge in the consolidated income statement. Management determines the useful lives and residual values for assets, other than right of use assets, when they are acquired, based on experience with similar assets and taking into account other relevant factors such as any expected changes in technology. The useful life of equipment is assumed not to exceed the duration of restaurant property lease unless there is a reasonable expectation of renewal or ability for the equipment to be transferred for use in another restaurant.

Lease accounting

Lease accounting under IFRS 16 is significantly complex and necessitates the collation and processing of very large amounts of data and the increased use of management judgements and estimates to produce financial information. The most significant accounting judgements are disclosed below:

- The Group determines the lease term as the non-cancellable term of the lease, together with any periods covered by an option to extend the lease if it is reasonably certain to be exercised, or any periods covered by a break clause to terminate the lease, if it is reasonably certain not to be exercised.

- When the interest rate implicit in the lease is not readily determinable, the Group estimates the incremental borrowing rate ("IBR") based on a risk-free rate adjusted for the effect of the Group's theoretical credit risk. As the Group has external borrowings, judgement is required to compute an appropriate discount rate which was calculated based on UK bank borrowings and adjusted by an indicative credit premium that reflects the credit risk of the Group. This has resulted in a weighted average IBR of 4.3% (2021: 3.3%) applied to the leases.

Loyalty programme

The Group operates a loyalty programme in its Franco Manca business. The scheme enables members to earn stamps from each qualifying purchase from a Franco Manca restaurant. Rewards that can be used against future purchases are earnt on collection of a number of stamps. The Group recognises deferred revenue in an amount that reflects the scheme's unsatisfied performance obligations, valued at the stand-alone selling price of the future benefit to the member. The amount of revenue recognised and deferred is impacted by 'breakage'. On an annual basis the Group estimate the number of rewards that will never be consumed ('breakage'). Significant estimation uncertainty exists in projecting members' future consumption activity.

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 OF ALTERNATIVE PERFORMANCE MEASURES

The Group uses alternative performance measures which are designed to show the normalised underlying trading performance for the period, including an adjustment to take account of property costs on an accruals basis, as below:

OPERATING PROFIT/(LOSS)

Operating (loss)/profit is defined as (loss)/profit before taxation, finance income and finance costs.

HEADLINE OPERATING PROFIT/(LOSS)

Headline operating (loss)/profit is defined as operating profit before amortisation of brand, impairment of property, plant and equipment, impairment of goodwill and intangible assets, impairment and changes in fair value of investments, COVID-19 related 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/(LOSS) BEFORE TAXATION

Headline (loss)/profit before taxation is defined as (loss)/profit before taxation before amortisation of brand, impairment of property, plant and equipment, impairment of goodwill and intangible assets, impairment and changes in fair value of investments, COVID-19 related 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 recognised in the profit and loss account in the period in which they are incurred.

HEADLINE EBITDA

Headline EBITDA is defined as EBITDA before COVID-19 related costs and grants received against COVID-19 related costs, restructuring costs, costs of reverse acquisition, cost of acquisition, share based payments, loss on disposal of property, plant and equipment, impairment of property, plant and equipment and pre-opening costs.

ADJUSTED HEADLINE EBITDA

Adjusted Headline EBITDA is defined as Headline EBITDA less rent expense calculated on an accrual basis, which excludes the effect of IFRS 16.

EBITDA

EBITDA is defined as Headline EBITDA less share based payments and pre-opening costs.

ADJUSTED EBITDA

Adjusted EBITDA is defined as EBITDA less rent expense calculated on an accrual basis, which excludes the effect of IFRS 16.

HEADLINE EPS

Headline basic EPS and Headline diluted EPS are defined in note 6.

NET CASH/NET DEBT EXCLUDING LEASE LIABILITIES

Net cash or net debt excluding lease liabilities are defined in note 19 by removing lease liabilities recognised under IFRS16 from total net cash or net debt .

NOTES TO THE FINANCIAL STATEMENTS

for the year ended 27 March 2022

SEGMENT INFORMATION

For management purposes, the Group was organised into two operating divisions during the year ended 27 March 2022. These divisions, The Real Greek and Franco Manca, are the basis on which the Group reports its primary segment information as identified by the chief operating decision maker which is the Group's board of directors.

For the year ended 27 March 2022:

	The Real Greek segment £'000	Franco Manca segment £'000	Other unallocated £'000	Total £'000

Revenue from:
External customers	29,121	53,465	116	82,702


Headline EBITDA	7,635	14,157	(1,454)	20,338
Depreciation and amortisation	(3,285)	(8,055)	(27)	(11,367)

Headline operating profit/(loss)	4,350	6,102	(1,481)	8,971

Share based payments	(27)	(37)	(16)	(80)
Pre-opening costs	(346)	(387)	-	(733)
Amortisation of brand	-	(821)	-	(821)
Impairment of property plant and equipment	(602)	-	-	(602)

Operating profit/(loss)	3,375	4,857	(1,497)	6,735
Finance income	-	2	-	2
Finance costs	(855)	(1,649)	(359)	(2,863)

Segment profit/(loss) before taxation	2,520	3,210	(1,856)	3,874
Income tax				(211)

Profit for the year from continuing operations				3,663


Assets	43,753	103,091	1,279	148,124
Liabilities	(36,566)	(67,567)	(4,625)	(108,759)

Net assets	7,187	35,524	(3,346)	39,365


Capital additions to PPE	12,814	14,679	7	27,500

Capital additions to PPE excluding right of use assets	3,313	4,479	7	7,799

Within Franco Manca includes £88,000 (2021:£nil) of revenue generated from the company's franchisee operating in a geographic region outside of the UK.

1	SEGMENT INFORMATION (continued)

In addition to the revenues generated from external customers, The Real Greek segment also generated internal revenues from another segment, Franco Manca, to the value of £330,000 (2021: £542,000).

For the year ended 28 March 2021:

		The Real Greek segment £'000	Franco Manca segment £'000	Other unallocated £'000	Total £'000

Revenue from:
External customers		9,007	30,779	499	40,285


Headline EBITDA		1,578	8,091	(670)	8,999
Depreciation and amortisation		(3,190)	(7,932)	(28)	(11,150)

Headline operating (loss)/profit		(1,612)	159	(698)	(2,151)

Share based payments		(19)	(64)	(8)	(91)
Pre-opening costs		(31)	(181)	-	(212)
Amortisation of brand		-	(821)	-	(821)
Impairment of property plant and equipment		(321)	(692)	-	(1,013)
COVID-19 related costs		(57)	(27)	(399)	(483)

Operating loss		(2,040)	(1,626)	(1,105)	(4,771)
Finance income		6	4	-	10
Finance costs		(694)	(1,607)	(453)	(2,754)

Segment loss before taxation		(2,728)	(3,229)	(1,558)	(7,515)
Income tax income					1,209

Loss for the year from continuing operations					(6,306)


Assets		33,574	97,905	6,450	137,929
Liabilities		(25,172)	(59,306)	(17,994)	(102,472)

Net assets		8,402	38,599	(11,544)	35,457


Capital additions to PPE	1,382		6,464	-	7,846

Capital additions to PPE excluding right of use assets		456	1,223	-	1,679

Within revenue from external customers, there was Eat Out To Help Out income of: £1,195,000.

1	SEGMENT INFORMATION (continued)

Head office and PLC costs are not related to the Group's two business segments and are therefore included in other unallocated and are not part of a business segment. The Group's two business segments primarily operate in one geographical area which is the United Kingdom.

2	OPERATING PROFIT/(LOSS)
		Year ended 27 March 2022	Year ended 28 March 2021
		£'000	£'000

	Operating profit/(loss) is stated after charging/(crediting):
	Staff costs (note 3)	29,625	12,767
	Coronovirus Job Retention Scheme related costs (note 3)	804	9,521
	Other income:
	Coronavirus Job Retention Scheme grants (note 3)	(755)	(8,479)
	Other government grants	(1,522)	(1,791)
	Insurance claims	(124)	-
	Share based payments	80	91
	Depreciation of property, plant and equipment
	Owned assets Leased assets	4,423 6,869	4,883 6,171
	Amortisation of intangible assets:
	Trademarks, licenses and franchises	75	97
	Brand	821	821
	Operating lease rentals of short term leases	241	188
	Inventories - amounts charged as an expense	14,690	6,509
	Auditor's remuneration:
	for statutory audit services	151	149
	for other assurance services	9	8
	for transactional services	-	9
	Pre-opening costs	733	212
	Exceptional costs:
	impairment of property, plant and equipment	602	1,013
	COVID-19 related costs	-	483

COVID-19 related costs of £nil (2021: £483,000) include the one off cost of temporarily closing restaurants following UK government instructions (such as stock wastage and other costs), one off property related costs and certain provisions made against expected credit losses arising from the impact of the COVID-19 pandemic.

3	EMPLOYEES
		Year ended 27 March 2022	Year ended 28 March 2021
		No.	No.

	The average monthly number of persons (including Directors) employed by the Group during the year was:
	Administration and management	35	29
	Restaurants	1,610	1,069

		1,645	1,098


	The average monthly number of persons (including Directors) employed by the Company during the year was:
	Administration and management	8	7

	Year ended 27 March 2022	Year ended 28 March 2021
	£'000	£'000
Staff costs for above persons
Salaries and fees	27,066	11,619
Defined contribution pension costs	472	218
Social security costs	2,087	930

	29,625	12,767

Share based payments	80	91

	29,705	12,858
Furlough related costs and grants
Furlough salaries and fees	804	8,783
Furlough defined contribution pension costs	-	591
Furlough social security costs	-	147
Coronavirus Job Retention Scheme grants	(755)	(8,479)

	49	1,042

	29,754	13,900

During the first quarter of the year ended 27 March 2022 some staff were on flexi-furlough whilst during the year ended 28 March 2021, the majority of staff were on either furlough or flexi-furlough. The Group received grants from the UK Government under the Coronavirus Job Retention Scheme to enable such staff to be placed on furlough rather than made redundant as a result of the UK Government putting the UK under lockdown in the fight against the COVID-19 pandemic. Costs of employees on furlough have been recognised in Administrative Expenses while Coronavirus Job Retentions Scheme grants have been recognised within Other Income.

3	EMPLOYEES (continued)

DIRECTORS' REMUNERATION

The remuneration of Directors, who are the key management personnel of the Group and Company, is set out in aggregate and on a paid basis below.

	Year ended 27 March 2022	Year ended 28 March 2021
	£'000	£'000

Salaries, fees and other short term employee benefits	1,252	608
Defined contribution pension costs	23	22
Social security costs	231	105

	1,506	735

In light of the impact of COVID-19 and the majority of staff on furlough or flexi-furlough during the year ended 28 March 2021 and during the year ended 27 March 2022, from 1 April 2021 up until 30 June 2021, the Directors each waived 20% of their basic salaries totalling £38k (2021: £147k) during the same period staff were receiving furlough or flexi-furlough.

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

The highest paid director during the year received £385,000 (2021: £184,000) as well as gains of £198,000 (2021: £39,000) from the exercise of share options during the year.

Four Directors received pension contributions during the year (2021: Four).

During the year five directors (2021: four) exercised share options for a total of 17,137,829 (2021: 9,440,470) ordinary shares of the Company. The aggregate gains made on the exercise of options during the year was £2,057,000 (2021: £600,000).

FINANCE COSTS

	Year ended 27 March 2022	Year ended 28 March 2021
	£'000	£'000

Interest expenses on bank loans and overdrafts	362	457
Interest on lease liabilities	2,501	2,297

	2,863	2,754

INCOME TAX EXPENSE

	Year ended 27 March 2022	Year ended 28 March 2021
	£'000	£'000
Income tax expense on continuing operations
Based on the result for the year:
UK corporation tax at 19% (2021: 19%)	627	-
Adjustment in respect of prior periods	(269)	(127)

Total current taxation	358	(127)

Deferred taxation:
Origination and reversal of temporary timing differences
Current year	(147)	(1,082)

Total deferred tax	(147)	(1,082)


Total tax expense/(credit) on profit/(loss) on continuing operations	211	(1,209)

Further information on the movement on deferred taxation is given in note 16.

5	INCOME TAX EXPENSE (continued)

Factors affecting tax charge for year:	Year ended 27 March 2022	Year ended 28 March 2021
	£'000	£'000

Profit/(loss) before taxation from continuing operations	3,874	(7,515)

Taxation at UK corporation tax rate of 19% (2021: 19%)	736	(1,428)
Expenses not deductible for tax purposes	3	89
Depreciation/impairment on non-qualifying fixed assets	353	225
Tax effect from right of use asset accounting	(652)	228
Share based payments	(506)	(197)
Movement on unrecognised deferred tax	546	-
Adjustment to tax charge in respect of previous periods	(269)	(126)

Total income tax (credit)/expense in the income statement	211	(1,209)

Factors that may affect deferred tax charges are disclosed in note 16 including a breakdown of the adjustment to previously recognised deferred tax.

The UK corporation tax rate is currently 19% but will increase to 25% from 1 April 2023. The rate increase has been substantively enacted and therefore the deferred taxation balances have been recognised at the rate they are expected to reverse at.

6 EARNINGS PER SHARE

	Year ended 27 March 2022	Year ended 28 March 2021
	£'000	£'000

Profit/(loss) for the purposes of basic and diluted earnings per share:	3,663	(6,306)

Share based payments	80	91
Deferred tax on share based payments	(81)	(214)
Pre-opening costs	733	212
Amortisation of brand	821	821
Deferred tax on amortisation of brand	(137)	(137)
Loss on disposal	64	3
Exceptional costs
- impairment of property, plant and equipment	602	1,013
- COVID-19 related costs (net)	-	483

Headline profit/(loss)for the year for the purposes of headline basic and diluted earnings per share:	5,745	(4,034)


	Year ended 27 March 2022	Year ended 28 March 2021
	No. '000	No. '000

Weighted average number of ordinary shares in issue for the purposes of basic earnings per share	626,794	596,214
Effect of dilutive potential ordinary shares from share options	12,386	23,225

Weighted average number of ordinary shares in issue for the purposes of diluted earnings per share	639,180	619,439

6	EARNINGS PER SHARE (continued)

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

	Year ended 27 March 2022	Year ended 28 March 2021
Earnings per share:

Basic and diluted	0.6p	(1.1p)
Diluted	0.6p	(1.1p)


Headline basic and diluted	0.9p	(0.7p)
Headline diluted	0.9p	(0.7p)

During a period where the Group or Company makes a loss, accounting standards require that 'dilutive' shares for the Group be excluded in the earnings per share calculation, because they will reduce the reported loss per share; consequently, diluted earnings per share are the same as basic earnings per share for the year ended 28 March 2021.

7	INTANGIBLE ASSETS

Group	Trademarks, License and franchises £'000	Software £'000	Brand £'000	Goodwill £'000	Total £'000
Cost
29 March 2020	63	342	8,211	20,705	29,321

Additions	5	23	-	-	28

28 March 2021	68	365	8,211	20,705	29,349

Additions	2	-	-	-	2

27 March 2022	70	365	8,211	20,705	29,351


Accumulated amortisation
29 March 2020	42	157	4,105	-	4,304

Charge in the year	8	89	821	-	918

28 March 2021	50	246	4,926	-	5,222

Charge in the year	5	70	821	-	896

27 March 2022	55	316	5,747	-	6,118

Net book value
27 March 2022	15	49	2,464	20,705	23,233

28 March 2021	18	119	3,285	20,705	24,127

The amortisation charges for trademarks, license and franchises and software for the year are recognised within administrative expenses. The amortisation charges for brand for the year are presented after Headline Operating Profit/(loss).

As at 27 March 2022 brand intangible asset which relates to Franco Manca has a remaining amortisation period of 3 years (2021: 4 years).

Goodwill of £1,774,000 relates to The Real Greek and is attributable to its cash generating unit.

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 unit held within Franco Manca 2 UK Limited.

7	INTANGIBLE ASSETS (continued)

For the purposes of impairment testing, the Directors consider each of Franco Manca and The Real Greek, operating segments of the Group, as the lowest level within the Group at which the goodwill is monitored for internal management purposes. Each of these segments is made up of a group of separate restaurants which are cash generating units (CGUs) in their own right.

The recoverable amount for each segment and group of CGUs was determined using a value in use calculation based upon management forecasts for the trading results for that segment. Value in use calculations are based on:

· cash flow forecasts derived from the most recent financial forecasts for the 2023 and financial year for the sites open at the end of March 2022;

· extrapolated cash flow forecasts over the following twenty four years, an appropriate timeframe for branded restaurant businesses, using forecast growth rates based on the long term industry growth rate of 2%;

· less estimated annual capital expenditure required to maintain the existing restaurants' look and feel in each segment based on historic refurbishment programmes and investments in IT systems;

· a pre-tax discount rate of 9.0% (2021: 10.25%) which is the rate believed by the Directors to reflect the risks associated with the group of CGUs using a WACC model, and comparison to other available restaurant businesses.

The estimated recoverable amount of The Real Greek and Franco Manca segments exceed their carrying values by £74,970,000 and £134,800,000 respectively. There are no reasonably plausible scenarios in which a change in the assumptions would lead to an impairment loss being recognised for the year ended 27 March 2022.

Similarly, following the impact of COVID-19 on trading during the year, it would be unlikely for all restaurants in each CGU to close temporarily to trading for the significant amount of time that would lead to an impairment loss being recognised.

8	PROPERTY, PLANT AND EQUIPMENT

Group	Leasehold improvements £'000	Right of use assets £'000	Plant and equipment £'000	Furniture, fixtures and fittings £'000	Assets under construction £'000	Total £'000
Cost
29 March 2020	39,721	73,559	7,755	3,367	387	124,789

Additions	1,043	5,329	355	162	119	7,008
Remeasurements	-	838	-	-	-	838
Reclassification	46	-	-	26	(72)	-
Disposals	(3)	(2,111)	(3)	-	-	(2,117)

28 March 2021	40,807	77,615	8,107	3,555	434	130,518

Additions	4,008	18,712	1,433	867	1,491	26,511
Remeasurements	-	989	-	-	-	989
Reclassification	222	-	15	22	(259)	-
Disposals	(7)	-	-	(63)	-	(70)

27 March 2022	45,030	97,316	9,555	4,381	1,666	157,948


Accumulated depreciation and impairment
29 March 2020	11,880	6,025	4,661	1,617	-	24,183

Charge in the year	3,145	6,171	1,242	496	-	11,054
Impairment	1,013	-	-	-	-	1,013
Disposals	(1)	(687)	(2)	-	-	(690)

28 March 2021	16,037	11,509	5,901	2,113	-	35,560

Charge in the year	2,805	6,869	1,119	499	-	11,292
Impairment	162	440	-	-	-	602
Disposals	-	-	-	(5)	-	(5)

27 March 2022	19,004	18,818	7,020	2,607	-	47,449

Net book value
27 March 2022	26,026	78,498	2,535	1,774	1,666	110,499

28 March 2021	24,770	66,106	2,206	1,442	434	94,958

Right of use assets comprises assets relating to property leases.

8	PROPERTY, PLANT AND EQUIPMENT (continued)

An impairment review of property, plant and equipment is carried out when there is indication of impairment. For the purposes of impairment testing of property, plant and equipment, the Directors consider each restaurant unit as a separate cash generating unit (CGU). The recoverable amount for each CGU was determined using a value in use calculation based upon management forecasts for the trading results for those restaurants. Value in use calculations are based on:

· cash flow forecasts derived from the most recent board approved financial forecasts for the 2023 financial year for the site being tested at the end of March 2022;

· extrapolated cash flow forecasts over the remaining unexpired length of the lease years using forecast growth rates based on the long term industry growth rate of 2%;

· incorporate any expected trading or cash flow impact from COVID-19;

· less estimated annual capital expenditure required to maintain the existing restaurants' look and feel in each segment based on historic refurbishment programmes;

· a pre-tax discount rate to cash flow projections of 9.0% (2021: 10.25%) which is the rate believed by the Directors to reflect the risks associated with the CGU using a WACC model with comparison to other available restaurant businesses.

The Group has also conducted a sensitivity analysis on the impairment test of the CGU carrying value including reducing sales level by reducing the long term growth rate by 1 % and there is no reasonably expected change that would give rise to an impairment charge other than the CGUs listed below and one CGU that had previously had an impairment charge, where the overall impairment charge would increase by £348,000.

The following impairment charges have been recognised in the Statement of Comprehensive Income as exceptional costs - impairment of property, plant and equipment.

	27 March 2022 £'000	27 March 2022 £'000	28 March 2021 £'000	28 March 2021 £'000
	Impairment charge	Recoverable amount	Impairment charge	Recoverable amount
For continuing operations
Franco Manca restaurant 1	-	-	240	-
Franco Manca restaurant 2	-	-	252	-
Franco Manca restaurant 3	-	-	56	130
Franco Manca restaurant 4	-	-	144	83

Total for Franco Manca operating segment	-	-	692	213

The Real Greek restaurant 1	-	-	321	-
The Real Greek restaurant 2	602	528	-	-

Total for The Real Greek operating segment	602	528	321	-

Total for the Group	602	528	1,013	213


8	PROPERTY, PLANT AND EQUIPMENT (continued)

The recoverable amounts shown above include the right of use assets recognised under IFRS 16 relating to the relevant CGU.

During the year ended 27 March 2022, the Group impaired the property plant and equipment in relation to nil (2021: one) property trading as Franco Manca and one (2021: nil) property trading as The Real Greek, which are trading financially below management expectations. In the prior year ended 28 March 2021, three restaurants trading as Franco Manca and one as The Real Greek were impaired following the closure of Debenhams where these sites were located as concessions. These sites continue to trade under short term leases or tenancies at will.

Parent Company	Leasehold improvements £'000	Plant and equipment £'000	Furniture, fixtures and fittings £'000	Total £'000
Cost
29 March 2020 and 28 March 2021	206	66	26	298

Additions	-	7	-	7

27 March 2022	206	73	26	305


Accumulated depreciation
29 March 2020	80	54	13	147

Charge in the year	21	5	3	29

28 March 2021	101	59	16	176

Charge in the year	21	4	3	28

27 March 2022	122	63	19	204

Net book value
27 March 2022	84	10	7	101

28 March 2021	105	7	10	122

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

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

INVESTMENTS

	27 March 2022 £'000	28 March 2021 £'000
Group

Unlisted shares	66	-
Change in fair value	-	-
Loans at cost	-	-
Impairment of investments and loans	-	-

Carrying amount	66	-

Investments are recognised and derecognised on a trade date where a purchase or sale of an investment is under a contract whose terms require delivery of the investment within the timeframe established by the market concerned, and are initially measured at fair value, including transaction costs and subsequently measured.

During the year ended 27 March 2022, the Group made an additional investment of £66,000 (2021: £nil) to Made of Dough Limited as part of a rights issue. The Group as at 27 March 2022 holds 24% (2021: 24%) of the equity of Made of Dough Limited. Although the investment is for more than 20% of the investee and includes one board representation, the structure of the investee board, the shareholder agreement and the start up nature of the business operations has led the Group to conclude that the Group does not have significant influence over its operations and therefore it is not an associate.

Other investments classified as financial assets are stated at amortised cost using the effective interest method, less any impairment.

	27 March 2022 £'000	28 March 2021 £'000
Parent Company

Cost and net book value
Opening position	44,430	44,347

Investment in subsidiaries	64	83

Closing position	44,494	44,430

INVESTMENTS (continued)

As at 27 March 2022, 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
10DAS Limited	Ordinary	100%	Dormant
Café Pitfield Limited	Ordinary	100%	Dormant
CHG Brands Limited*	Ordinary	100%	Dormant
FM6 Limited*	Ordinary	100%	Restaurant property
FM98 LTD Limited*	Ordinary	100%	Operation of restaurants
FM111 Limited*	Ordinary	100%	Restaurant property
FM Catherine The Great Limited*	Ordinary	100%	Restaurant property
FM High Holborn Limited	Ordinary	100%	Restaurant property
FM London Bridge Limited	Ordinary	100%	Restaurant property
Franco Manca Chelmsford Limited	Ordinary	100%	Restaurant property
Franco Manca Holdings Limited	Ordinary	100%	Dormant
Franco Manca International Limited*	Ordinary	100%	Restaurant franchising
Franco Manca Peterborough Limited	Ordinary	100%	Restaurant property
Franco Manca 1 UK Limited	Ordinary	100%	Restaurant property
Franco Manca 2 UK Limited*	Ordinary	100%	Operation of restaurants
Kefi Limited	Ordinary	100%	Dormant
Souvlaki & Bar Limited*	Ordinary	100%	Restaurant property
The Real Greek Bracknell Limited	Ordinary	100%	Restaurant property
The Real Greek Food Company Limited*	Ordinary	100%	Operation of restaurants
The Real Greek International Limited*	Ordinary	100%	Dormant
The Real Greek (Norwich) Limited*	Ordinary	100%	Dormant
The Real Greek Wine Company Limited*	Ordinary	100%	Restaurant property

* Held by subsidiary undertaking

10	INVENTORIES
		Group		Parent company
		27 March 2022 £'000	28 March 2021 £'000	27 March 2022 £'000	28 March 2021 £'000

	Raw materials	827	532	-	-
	Consumables	1,572	1,444	-	-

		2,399	1,976	-	-

Inventories are charged to cost of sales in the consolidated comprehensive statement of income. Amounts recognised as an expense during the period ended 27 March 2022 £14,690,000 (2021: £6,509,000).

11	TRADE AND OTHER RECEIVABLES
		Group		Parent company
		27 March 2022 £'000	28 March 2021 £'000	27 March 2022 £'000	28 March 2021 £'000

	Included within non-current assets:
	Amounts receivable from subsidiaries	-	-	4,164	9,456
	Other receivables	672	935	-	-

		672	935	4,164	9,456


	Included within current assets:
	Trade receivables	2,603	1,009	247	-
	Other receivables	293	491	-	-
	Prepayments and accrued income	1,412	1,221	150	53

		4,308	2,721	397	53

		4,980	3,656	4,561	9,509

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

Amounts receivable from subsidiaries in the Company included within non-current assets are unsecured and earn interest at 3.5% above LIBOR.

Receivables are denominated in sterling.

The Group and Company hold no collateral against these receivables at the balance sheet date. The Directors consider that the carrying amount of receivables are recoverable in full and approximates to their fair value. As the risk of a credit loss is low there is no material ECL adjustment required.

12	CASH AND CASH EQUIVALENTS
		Group		Parent company
		27 March 2022 £'000	28 March 2021 £'000	27 March 2022 £'000	28 March 2021 £'000

	Cash at bank and in hand	6,141	12,270	63	5,797

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
		27 March 2022 £'000	28 March 2021 £'000	27 March 2022 £'000	28 March 2021 £'000

	Included in current liabilities:
	Trade payables	8,577	5,670	109	60
	Other taxation and social security payable	891	765	82	96
	Other payables	1,622	971	38	95
	Accruals	9,617	6,771	2,546	1,743

		20,707	14,177	2,775	1,994

Trade payables are 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
		27 March 2022 £'000	28 March 2021 £'000	27 March 2022 £'000	28 March 2021 £'000

	Short term borrowings:
	Bank loans	-	3,730	-	3,730
	Lease liabilities	6,527	7,909	-	-

		6,527	11,639	-	3,730

	Long term borrowings:
	Bank loans	1,850	12,120	1,850	12,120
	Lease liabilities	77,852	63,078	-	-
	Amounts owed to subsidiary undertakings	-	-	3,971	235

		79,702	75,198	5,821	12,355


		86,229	86,837	5,821	16,085

As at 27 March 2022, the Group's committed Sterling borrowing facilities comprise a revolving credit facility of £ 17,000,000 (2021: £14,250,000), a Coronavirus Large Business Interruption Loan facility ("CLBIL") of £Nil (2021: £10,750,000), expiring between one and five years and a bank overdraft facility, repayable on demand, of £750,000 (2021: £750,000) from HSBC Bank PLC ("HSBC") which are secured by a mortgage debenture in favour of HSBC representing fixed or floating charges over all assets of the Group. The Group benefited from covenant waivers from HSBC during the year ended 27 March 2022.

The interest rate applicable on the revolving credit facility is up to 2 .60 % above SONIA. The interest rate applicable on the bank overdraft is 2.1% over base rate. The overdraft facility was undrawn as at 27 March 2022.

Amounts owed to subsidiary undertakings are amounts borrowed from The Real Greek Food Company Limited, a subsidiary of the Company and are repayable on 27 March 2022. The interest rate applicable on the amounts owed to subsidiary undertakings is 3.5%.

14	BORROWINGS (continued)

The maturity profile of the Group's lease liabilities as at 27 March 2022 was as follows:

	27 March 2022 £'000	28 March 2021 £'000

Within one year	9,153	10,039
In more than one year but less than two years	8,906	7,051
In more than two years but less than three years	8,903	6,861
In more than three years but less than four years	8,694	6,807
In more than four years but less than five years	8,166	6,552
In more than five years	63,024	51,439

	106,846	88,749
Effect of unearned interest	(22,467)	(17,762)

Lease liabilities	84,379	70,987

There are no committed lease liabilities not yet commenced at 27 March 2022.

Interest expense on borrowings for the year is disclosed in Note 4 finance costs whilst capital payments for the year is disclosed in Note 19.

15	CAPITAL AND FINANCIAL MANAGEMENT

The Group is exposed to financial risks which could affect the Group's future financial performance.

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

The Group finances its operations through equity, borrowings and cash generated from operations. For borrowings other than lease liabilities, the Group's policy is to borrow centrally using a mixture of long-term and short-term borrowing facilities to meet anticipated funding requirements. These borrowings, together with cash generated from operations, are loaned internally or contributed as equity to certain subsidiaries.

15	CAPITAL AND FINANCIAL MANAGEMENT (continued)

Financial assets and liabilities

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

	Group		Parent company
	27 March 2022 £'000	28 March 2021 £'000	27 March 2022 £'000	28 March 2021 £'000

Non-current financial assets

Amounts owed by subsidiary undertakings	-	-	4,164	9,456
Other receivables	672	935	-	-

Current financial assets
Cash at bank and in hand	6,141	12,270	63	5,797
Trade and other receivables*	2,896	1,500	247	-

	9,709	14,705	4,474	15,253


Current financial liabilities
At amortised cost - borrowings	6,527	11,639	-	3,730
At amortised cost - payables**	19,816	13,412	2,693	1,898

Non-current financial liabilities
At amortised cost - borrowings	79,702	75,198	1,850	12,120
At amortised cost - payables	-	-	3,971	235

	106,045	100,249	8,514	17,983

* 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	CAPITAL AND FINANCIAL MANAGEMENT (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 year ended 27 March 2022	Less than 1 year £'000	Between 1 and 5 years £'000	More than 5 years £'000	Total £'000

Cash at bank and in hand	6,141	-	-	6,141
Trade and other receivables	2,896	153	519	3,568
Bank loans and overdrafts	-	(1,850)	-	(1,850)
Lease liabilities	(532)	(4,187)	(102,127)	(106,846)
Trade and other payables	(19,816)	-	-	(19,816)

	(11,311)	(5,884)	(101,608)	(118,803)

For the year ended 28 March 2021	Less than 1 year £'000	Between 1 and 5 years £'000	More than 5 years £'000	Total £'000

Cash at bank and in hand	12,270	-	-	12,270
Trade and other receivables	1,500	117	818	2,435
Bank loans and overdrafts	(3,730)	(12,120)	-	(15,850)
Lease liabilities	(2,930)	(3,271)	(82,548)	(88,749)
Trade and other payables	(13,412)	-	-	(13,412)

	(6,302)	(15,274)	(81,730)	(103,306)

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

15	CAPITAL AND FINANCIAL MANAGEMENT (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 year ended 27 March 2022	Less than 1 year £'000	Between 1 and 5 years £'000	Total £'000

Cash at bank and in hand	63	-	63
Trade and other receivables	247	4,164	4,411
Bank loans and overdrafts	-	(1,850)	(1,850)
Trade and other payables	(2,693)	(3,971)	(6,664)

	(2,383)	(1,657)	(4,040)

For the year ended 28 March 2021	Less than 1 year £'000	Between 1 and 5 years £'000	Total £'000

Cash at bank and in hand	5,797	-	5,797
Trade and other receivables	-	9,456	9,456
Bank loans and overdrafts	(3,730)	(12,120)	(15,850)
Trade and other payables	(1,898)	(235)	(2,133)

	169	(2,899)	(2,730)

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 £17,250,000 (2021: £14,250,000), a committed long term Coronavirus Large Business Interruption Loan facility of £Nil (2021: £10,750,000) and short term bank overdraft facilities available to manage its liquidity as at 27 March 2022 of £750,000 (2021: £750,000).

15	CAPITAL AND FINANCIAL MANAGEMENT (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
	27 March 2022 £'000	28 March 2021 £'000	27 March 2022 £'000	28 March 2021 £'000
Floating rate
Cash at bank and in hand	6,141	12,270	63	5,797
Bank loans	(1,850)	(15,850)	(1,850)	(15,850)

	4,291	(3,580)	(1,787)	(10,053)

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

Weighted average interest rates paid for bank loans during the year ended 27 March 2022 were 2.0% and year ended 28 March 2021 were 2.2% and the weighted average interest rates paid for bank overdrafts during the year ended 27 March 2022 and 2021 were 2.5%.

The Group has performed a sensitivity analysis based on a 0.5% variance in SONIA element of floating interest rates. The annualised impact of an increase in SONIA by 0.5% applied to the balance of floating rate bank loans at the year end would result in increased finance costs of £42,084 (2021: £79,250).

Foreign Exchange Risks

During the years ended 27 March 2022 and 28 March 2021, 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.

15	CAPITAL AND FINANCIAL MANAGEMENT (continued)

Credit Risks

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

	Group		Parent company
	27 March 2022 £'000	28 March 2021 £'000	27 March 2022 £'000	28 March 2021 £'000

Cash at bank and in hand	6,141	12,270	63	5,797
Trade receivables and other receivables	3,568	2,435	4,164	9,456

	9,709	14,705	4,227	15,253

The Group has made a number of deposits and estimates that there are no further credit loss likely in relation to these deposits made. In the year ended 28 March 2021 the Group recognised an impairment of £69,000) in relation to other investment held by the Group. The carrying amounts of the other financial assets above are considered to be recoverable in full and approximate to their fair value. They are neither past due nor impaired and the expected credit loss is not considered to be material.

The majority of the Group's cash balances have been held in current accounts savings accounts at HSBC Bank PLC during the years ended 27 March 2022 and 28 March 2021 and did not earn any significant interest. The Group estimates that there is no material expected credit loss.

The majority of the Group's trade receivables are due for settlement within 7 days and largely comprise amounts receivable from credit and debit card clearing houses and online food delivery companies. As the Group has no material credit facilities granted to customers no credit losses have been estimated.

The Group's other receivables predominantly comprises of deposits held by landlords and suppliers and the Group estimates that there is no material expected credit loss on these.

The Company's trade and other receivables are made up of loans to its subsidiary undertaking, Franco Manca 2 UK Limited. The Company has undertaken procedures to determine whether there has been a significant increase in credit risk. Where these procedures identify a significant increase in credit risk, the loss allowance is measured based on the risk of a default occurring over the expected life of the instrument. The Company estimates that there is no increase in credit risk identified given the nature of the balances held.

Fair Values of Financial Assets and Financial Liabilities

The fair value amounts of the Group's and Company's financial assets and liabilities as at 27 March 2022 and 28 March 2021 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
	27 March 2022 £'000	28 March 2021 £'000		27 March 2022 £'000	28 March 2021 £'000

As at 28 March 2021	(506)	(1,879)		478	3

Tax on share based payments	(290)	290		(290)	290

Transfer from/(to) reserves	(290)	290		(290)	290

Movement in accelerated capital allowances	(294)	285		-	-
Tax on share based payments	81	214		56	185
Tax on losses	(429)	429		-	-
Tax on intangible assets	136	137		-	-
Tax on leases	653	18

Transfer from profit and loss	147	1,083		56	185

Net deferred tax (liability)/asset	(649)	(506)		244	478

During the year ended 27 March 2022, the Group and Company transferred £290,000 deferred tax charge to reserves (2021: £290,000 from reserves) in relation to deferred tax on share based payments.

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

	Group		Parent company
	27 March 2022 £'000	28 March 2021 £'000		27 March 2022 £'000	28 March 2021 £'000

Deferred tax assets
Share options	304	513		244	478
Leases	502	-		-	=
Tax losses	-	429		-	-

Deferred taxation assets	806	942		244	478

Deferred tax liabilities
Accelerated capital allowances	(1,044)	(750)		-	-
Intangible assets	(411)	(547)		-	-
Leases	-	(151)		-	-

Deferred taxation liabilities	(1,455)	(1,448)		-	-

16	DEFERRED TAXATION (continued)

The Company has losses of £1,984,000 (2021: £981 ,000) which, subject to agreement with HM Revenue & Customs, are available to offset against the respective Company's future profits. A deferred taxation asset in respect of these losses of £496,000 (2021: £186,000) 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 2022 £'000	28 March 2021 £'000		27 March 2022 £'000	28 March 2021 £'000

	Allotted, issued called up and fully paid:
	634,820,577 (2021: 619,057,651) ordinary shares of 1p each		6,348	6,191		6,348	6,191

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

During the year ended 27 March 2022, the Company issued the following ordinary shares following the exercise of certain share options in the Company:

Amount paid per share	Type of shares	Nominal value per ordinary share £	Number of ordinary shares No.
£0.01	Ordinary	0.01	11,131,070
£0.06	Ordinary	0.01	3,332,842
£0.1015	Ordinary	0.01	1,130,000
£0.1775	Ordinary	0.01	169,014

			15,762,926

18	SHARE BASED PAYMENTS

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

The Group operated four share plans during the year:

· 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 to 10 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. For the SIP, the vesting period ranges from 1 day to 3 years with an expiration date 10 years from the date of grant. For the initial grant under the SIP, the shares are not forfeited if the employee leaves the Group before vesting. On all schemes, there are no other material vesting conditions.

The charge recorded in the financial statements of the Group in respect of share-based payments is £80,000 (2021: £91,000).

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 27 March 2022 are as follows:

	Year ended 27 March 2022 No. '000	Year ended 28 March 2021 No. '000

At the beginning of the year	53,295	64,851

Granted during the year	400	-
Exercised during the year	(21,113)	(9,441)
Lapsed during the year	(2,375)	(2,115)

At the end of the year	30,207	53,295

18	SHARE BASED PAYMENTS (continued)

Weighted average exercise price	Year ended 27 March 2022 £	Year ended 28 March 2021 £

At the beginning of the year	0.10	0.10
Granted during the year	0.16	-
Exercised during the year	(0.07)	(0.06)
Lapsed during the year	(0.15)	(0.14)

At the end of the year	0.12	0.10

Outstanding and exercisable share options to acquire ordinary shares of 1 pence each as at 27 March 2022 under various Group share plans are as follows:

For the year ended 27 March 2022
		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
	Unapproved
	£0.1015	72	0.1015	75	72	0.1015	75
	£0.11	22,097	0.1100	37	22,097	0.1100	37
	£0.1125	1,175	0.1125	88	-	-	-
	£0.16	95	0.1600	109	-	-	-
	£0.17625	585	0.1763	63	585	0.1763	63
	£0.1775	81	0.1775	59	81	0.1775	59
	£0.1825	921	0.1825	51	921	0.1825	51


		25,026	0.1147	41	23,756	0.1146	38

	CSOP
	£0.1015	388	0.1015	75	388	0.1015	75
	£0.1125	1,725	0.1125	88	-	-	-
	£0.16	305	0.1600	109	-	-	-
	£0.17625	815	0.1763	63	815	0.1763	63
	£0.1775	369	0.1775	59	369	0.1775	59
	£0.1825	1,579	0.1825	51	1,579	0.1825	51

		5,181	0.1505	71	3,151	0.1703	58

18	SHARE BASED PAYMENTS (continued)

For the year ended 28 March 2021
		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
	£0.06	3,332	0.0600	7	3,332	0.0600	7

		3,332	0.0600	7	3,332	0.0600	7

	Unapproved
	£0.06	13,805	0.0600	43	13,805	0.0600	43
	£0.1015	1,492	0.1015	87	-	-	-
	£0.11	23,373	0.1100	49	23,373	0.1100	49
	£0.1125	1,595	0.1125	100	-	-	-
	£0.17625	785	0.1763	75	785	0.1763	75
	£0.1775	162	0.1775	71	162	0.1775	71
	£0.1825	1,421	0.1825	63	1,421	0.1825	63


		42,633	0.0975	52	39,546	0.0967	48

	CSOP
	£0.1015	1,518	0.1015	87	-	-	-
	£0.1125	2,180	0.1125	100	-	-	-
	£0.17625	915	0.1763	75	915	0.1763	75
	£0.1775	538	0.1775	71	538	0.1775	71
	£0.1825	2,179	0.1825	63	2,179	0.1825	63

		7,330	0.1438	81	3,632	0.1802	67

During the year ended 27 March 2022, the market price of ordinary shares in the Company ranged from £0.144 (2021: £ 0.0475) to £0.1985 (2021: £0.1650). The share price as at 27 March 2022 was £0.155 (2021: £ 0.1525) . The average share price for options exercised during the year was £0.179 (2021: £0.12)

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

Following the exercise of the outstanding options within the EMI plan during the year ended 27 March 2022, this scheme will no longer operate moving forwards.

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.

18	SHARE BASED PAYMENTS (continued)

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 for the grants were as follows:

	Year ended 27 March 2022	Year ended 28 March 2021

Weighted average expected life	3 years	-
Weighted average exercise price	16 pence	-
Risk free rate	0.01%	-
Expected volatility	0.78%	-
Expected dividends	-	-

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 27 March 2022 are as follows:

	Year ended 27 March 2022 '000	Year ended 28 March 2021 '000
At the beginning of the year	579	591
Exercised during the year	(15)	(12)

At the beginning and end of the year	564	579

For the year ended 27 March 2022

		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	564	-	37	564	-	37

		564	-	37	564	-	37

18	SHARE BASED PAYMENTS (continued)

For the year ended 28 March 2021

		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	579	-	49	579	-	49

		579	-	49	579	-	49

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

NOTE TO CASH FLOW STATEMENTS

Reconciliation of net cash flows from operating activities

	Group		Parent company
	Year ended 27 March 2022	Year ended 28 March 2021	Year ended 27 March 2022	Year ended 28 March 2021
	£'000	£'000	£'000	£'000

Profit/(loss) for the year	3,663	(6,306)	(1,635)	(948)
Income tax expense/ (credit)	211	(1,209)	(57)	(185)

Profit/(loss) before tax	3,874	(7,515)	(1,692)	(1,133)
Finance income	(2)	(10)	(242)	(479)
Finance costs	2,863	2,754	437	507

Operating profit/(loss) for the year	6,735	(4,771)	(1,497)	(1,105)

Adjustments
Depreciation and amortisation	12,188	11,972	28	29
Impairment	602	1,013	-	-
Loss on disposal of fixed assets	65	3	-	-
Share based payments expense	80	91	16	8

Operating cash flows before movements in working capital	19,670	8,308	(1,453)	(1,068)

Increase in inventories	(423)	(70)	-	-
(Increase)/decrease in trade and other receivables	(1,324)	(233)	(343)	97
Increase/ in trade and other payables	6,530	1,700	781	685

Cash generated from/(used in) operations	24,453	9,705	(1,015)	(286)

Income taxes paid	-	-	-	-

Net cash flow from/(used in) operating activities	24,453	9,705	(1,015)	(286)

NOTE TO CASH FLOW STATEMENTS (continued)

Changes in net debt from financing activities

Group	Cash and Cash Equivalents	Bank loans due within 1 year	Bank loans due after 1 year	Total before lease liabilities	Lease liabilities due within 1 year	Lease liabilities due after 1 year	Total
	£'000	£'000	£'000	£'000	£'000	£'000	£'000

Net cash/(debt) as at 29 March 2020	2,056	-	(11,540)	(9,484)	(5,163)	(63,051)	(77,698)

Cash flows	10,214	-	(4,310)	5,904	1,972	-	7,876
Reallocation	-	(3,730)	3,730	-	(4,915)	4,915	-
Additions to lease liabilities	-	-	-	-	(141)	(5,188)	(5,329)
Remeasurements to lease liabilities	-	-	-	-	(131)	(707)	(838)
Reduction of lease liabilities	-	-	-	-	469	953	1,422

Net cash/(debt) as at 28 March 2021	12,270	(3,730)	(12,120)	(3,580)	(7,909)	(63,078)	(74,567)

Cash flows	(6,129)	-	14,000	7,871	6,309	-	14,180
Reallocation	-	3,730	(3,730)	-	(3,242)	3,242	-
Additions to lease liabilities	-	-	-	-	(1,662)	(17,050)	(18,712)
Remeasurements to lease liabilities	-	-	-	-	(23)	(966)	(989)

Net cash/(debt) as at 27 March 2022	6,141	-	(1,850)	4,291	(6,527)	(77,852)	(80,088)

Net cash/ (net debt) before lease liabilities recognised under IFRS 16 as at 27 March 2022 was net cash of £4,291,000 (2021: net debt of (£3,580,000)).

NOTE TO CASH FLOW STATEMENTS (continued)

Parent Company	Cash and Cash Equivalents	Bank loans due within 1 year	Bank loans due after 1 year	Total
	£'000	£'000	£'000	£'000

Net cash/(debt) as at 29 March 2020	1,030	-	(14,737)	(13,707)

Cash flows	4,767	-	(1,348)	3,419
Reallocation	-	(3,730)	3,730	-

Net cash/(debt) as at 28 March 2021	5,797	(3,730)	(12,355)	(10,288)

Cash flows	(5,734)	-	10,264	4,530
Reallocation	-	3,730	(3,730)	-

Net cash/(debt) as at 27 March 2022	63	-	(5,821)	(5,758)

LEASE COMMITMENTS

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

	Group		Parent company
	27 March 2022 £'000	28 March 2021 £'000	27 March 2022 £'000	28 March 2021 £'000
Land and buildings
within one year	-	100	-	-

	-	100	-	-

The commitment included above relates to annual lease commitments under short term leases that have not been included in borrowings and will be charged to the profit and loss. Within the terms of the leases for land and buildings are commitments for variable pay that are dependent on turnover. These have not been disclosed in the above table due to the variable nature of these payments.

CAPITAL COMMITMENTS

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

	Group		Parent company
	27 March 2022 £'000	28 March 2021 £'000	27 March 2022 £'000	28 March 2021 £'000

Committed new restaurant builds	4,343	902	-	-

22 RELATED PARTY DISCLOSURES

Remuneration of key management personnel

The remuneration of the directors, who are the key management personnel of the Group, is provided in the Report on Directors' Remuneration, and in note 3.

Transactions with Directors other than compensation

During the year ended 27 March 2022, DM Page, NAG Mankarious, N Wong and N Donaldson, directors of the Company, exercised options over 17,137,829 ordinary shares (2021: DM Page, NAG Mankarious, N Wong and N Donaldson exercised options over 9,440,470 ordinary shares). The aggregate gains made on the exercise of the options during the year was £2,056,539 (2021: £561,000).

Other related party transactions

During the year, the Group was invoiced £nil (2021: £58,000) for the services of NJ Donaldson by London Bridge Capital Partners LLP, a business in which NJ Donaldson is a partner. This arrangement ended on 31 December 2020 and from 1 January 2021, NJ Donaldson was remunerated directly by the Group

22	RELATED PARTY DISCLOSURES (continued)

During the year the Group invoiced £43,500 (2021: £71,000) in rent relating to a property leased to Meatailer Limited, a company in which DM Page and NAG Mankarious are directors and shareholders and NJ Donaldson and NCW Wong are shareholders. The balance outstanding as at 27 March 2022 owed by Meatailer Limited was £Nil (2021: £Nil). During the year Meatailer Limited invoiced the Group and Company £nil (2021: £48,000) for a volume rebate received by the Group that was attributable to Meatailer Limited on a joint purchasing deal earned from a third party supplier. The balance outstanding as at 27 March 2022 owed to Meatailer was £Nil (2021: £Nil).

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 27 March 2022	Year ended 28 March 2021
	£'000	£'000

The Real Greek Food Company Limited	688	623
Franco Manca 2 UK Limited	920	1,302

	1,608	1,925

22	RELATED PARTY DISCLOSURES (continued)

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

Amounts loaned/(repaid)	Parent company
	Year ended 27 March 2022	Year ended 28 March 2021
	£'000	£'000

10DAS Limited	-	2
The Real Greek Food Company Limited	(3,736)	2,959
Franco Manca 2 UK Limited	(5,292)	(1,111)

	(9,028)	1,850

Amounts outstanding at year end	Parent company
	27 March 2022 £'000	28 March 2021 £'000

10DAS Limited	(14)	(14)
The Real Greek Food Company Limited	(3,957)	(221)
Franco Manca 2 UK Limited	4,164	9,456

	193	9,221

The Company was a legal guarantor and a party to an agreement in which 10DAS Limited during the year, a subsidiary company, entered into a lease of a restaurant space. The total potential aggregate minimum lease payments that has been called under this guarantee at the end of the year were £Nil (2021: £Nil).

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