TIDMCOM
RNS Number : 5025Q
Comptoir Group PLC
28 June 2022
28 June 2022
Comptoir Group plc
("Comptoir", the "Company" or the "Group")
Shareholder Action
The Board of Comptoir Group plc (the "Board") announces that it
has received a letter from Tony Kitous in his capacity as Founder
and Creative Director of the Company (the "Letter"), who is the
holder of 58,412,503 ordinary shares of 1 pence each in the capital
of the Company ("Ordinary Shares"), representing 47.6 per cent of
the issued ordinary share capital in the Company.
The Letter states that he would like to see Richard Kleiner
("Chairman") and Chaker Hanna ("Chief Executive Officer") resign as
directors of the Company. In the event that neither resigns, Mr
Kitous stated within the Letter he would be voting against the
re-election of the Chairman at the annual general meeting on 30
June 2022 (the "AGM"). His proxy form giving effect to the content
of the Letter has now been received by the Company. Furthermore, Mr
Kitous has voted against resolutions to be proposed at the AGM
giving the directors the authority to allot shares in the Company.
Thereafter, Mr Kitous has suggested that he would requisition a
general meeting to request the removal of the Chief Executive
Officer as a director of the Company. Mr Kitous also proposes the
appointment of a new Non-Executive Chair and Non-Executive Director
of the Company.
Mr Kleiner, Mr Hanna and Mr Toon (Finance Director) (being the
"Independent Directors") have, over recent months, sought to
actively engage with Mr Kitous in order to resolve matters and are
disappointed that Mr Kitous has declined to respond to requests
particularly from the Chief Executive Officer.
The Independent Directors believe the comments and proposals by
Mr Kitous within his Letter are being made to promote his own
financial gain and the actions proposed are to the detriment of all
independent shareholders (being all other shareholders, save for
Tony Kitous ("Independent Shareholders")). Furthermore, the
Independent Directors believe that by proposing the resignation of
Mr Kleiner and Mr Hanna and threatening to vote both directors off
the board, Mr Kitous is acting in direct conflict with the spirit
of his relationship agreement with the Company (put in place at the
Company's admission to trading on AIM in 2016 ("IPO") at the
request of the Company's nominated adviser), which seeks to protect
Independent Shareholders' interests. In addition, by voting against
both resolutions in respect of giving the directors authority to
allot shares in the Company, Mr Kitous, by adopting such actions,
is limiting the Company's stated growth strategy.
The Independent Directors believe that it is appropriate to
highlight to shareholders that, during 2022, Mr Kitous has offered
limited input into day to day operational and financial decisions
within the Company. This has been best demonstrated by a lack of
physical attendance at, and input into, board and senior management
meetings over the past six months (being a period of record
financial performance for the business, as set out later in this
announcement). Further, while the Company has employed Mr Kitous as
a director of the Company since its IPO, the Independent Directors
believe Mr Kitous, without the guidance of the Independent
Directors, does not possess the required business and commercial
judgement to successfully run, nor to appoint nominee directors to
run, the Company.
The Independent Directors are disappointed that as a director of
the Company, Mr Kitous is choosing to put his own financial
interests and personal profile ahead of Independent Shareholders of
the Company. The Independent Directors believe that if Mr Kitous is
successful in removing Mr Kleiner and Mr Hanna from the board, he
may lose the support of the senior team and seek to use the net
cash of the Company for his own personal gain and, over time, could
seek to de-list the Company from AIM without prior consultation
with Independent Shareholders or appropriate fair value
consideration being paid to Independent Shareholders. As such the
Independent Directors of the Company believe that Independent
Shareholders are at risk of losing part or all of their investment
within the Company if Mr Kitous succeeds in the removal of the
Chairman and Chief Executive Officer.
The Independent Directors do not believe that it is in the best
interests of Independent Shareholders for Mr Kleiner or Mr Hanna to
resign at the present time.
Background and trading update
In the Letter, Mr Kitous acknowledges Messrs Kleiner and Hanna
have contributed positively to the Company business over the last
eight years and twelve years respectively. Through their
leadership, the Company has emerged from the COVID pandemic in a
strong position, both financially and operationally.
For the year ended 31 December 2021, the Company reported
revenue of GBP20.7 million adjusted EBITDA of GBP3.0 million
(pre-IFRS16) and profit before tax of GBP1.6 million, being the
highest in the Company's history. The Company also reported
positive operating cash flow from operations of GBP4.7 million,
leading to cash and cash equivalents at the period end of GBP9.9
million and net cash of GBP7.1 million. The operating cash flow of
the Company in 2021 was the highest in the business's 12-year
history, despite the financial year being significantly disrupted
by the impact of COVID and lockdown measures.
The Company expects to report unaudited revenue of no less than
GBP14 million for the six months ending 30 June 2022 ("H1 2022"),
adjusted EBITDA of GBP1.6 million (pre-IFRS16) and unaudited profit
before tax of no less than GBP0.8 million and net cash and cash
equivalents of no less than GBP7.5 million. This financial result
would represent another record period of financial performance for
the Company. The Company has historically had a second half
weighting to its financial performance; as such the Independent
Directors believe the overall prospects for the Company in 2022 and
beyond remain strong.
The Independent Directors acknowledge that the share price is
currently affected by the fact that the Company is a "microcap"
stock and faces the usual liquidity issues that are common with
such shares. Mr Hanna has been mandated by the board of directors
to focus on investor relations, and the Independent Directors
believe the share price of the Company will, with time, reflect the
financial results of the Company. The share price of the Company
year to date has risen approximately 60 per cent. Furthermore, the
Chairman and Canaccord Genuity Limited have engaged with Mr Hanna,
who has confirmed he has no intentions of leaving the business and
is committed to developing the business over the long term.
The current leadership team has invested significantly in the
look and feel of the Company's restaurants, having recently
refurbished six restaurants. With regard to staff training and
customer service, the Company has a very strong training programme
in place headed by its Training, Learning & Development Manager
(for "Front of House") and its Deputy Executive Chef (for "Back of
House"). The Company has also invested in external training
providers and online courses and has developed a Centre of
Excellence training venue at the Gloucester Road site and also
invested in a full development kitchen at its CPU facility.
As discussed historically with shareholders, the Board has
consistently reviewed the Company's strategy regarding expansion
over the last few years and repeatedly concluded that in light of
the significantly challenging operating market caused first by
Brexit and then Covid, the time was not right to open new sites,
and instead to focus on protecting and strengthening the existing
business. In light of recent improving trading conditions, the
current leadership team is proactively considering expansion
strategies, including but not limited to opening new sites. The
Independent Directors note in particular the opening of: Shawa in
Westfield (last September); new franchises in Stansted Airport
(last Friday); and Doha (this coming September). The Board and
operations team frequently discuss new site acquisitions and
reference to expanding the portfolio of sites was included in the
full year results of the Company published on 30 May 2022. In
addition, by voting against both resolutions in respect of giving
the directors authority to allot shares in the Company, Mr Kitous,
by adopting such actions, is limiting the Company's stated growth
strategy.
The Independent Directors believe the current directors are
therefore best placed to continue executing the Company's growth
strategy with the full support of the senior team and do not
believe the resignation of the Chief Executive Officer and Chairman
would be in the best interests of the Company or its shareholders
as a whole, would expose the Company to significant financial and
operational risk and would be extremely damaging and destabilising
to the Company at this stage of its growth.
As set out earlier, Mr Kitous has offered limited input into the
day to day operational and financial decisions of the Company over
the past six months. Further, while the Company has employed Mr
Kitous as a director of the Company since its IPO, the Independent
Directors believe Mr Kitous, without the guidance of the
Independent Directors, does not possess the required business and
commercial judgement to successfully run, nor to appoint nominee
directors to run, the Company.
The Independent Directors believe that Mr Kitous is seeking to
control the Company for his own personal profile and financial
needs by replacing key members of the Board (including the Chief
Executive Officer) with candidates of his choosing. The Independent
Directors note that one proposed director is a long-term friend and
business associate of Mr Kitous, having done business together
previously. The Independent Directors understand that this
individual has been in discussions with Mr Kitous on the proposed
structure of the Company, as early as January of this year.
Accordingly, there is some doubt as to the degree of his
independence. The Independent Directors therefore believe that the
proposals by Mr Kitous to nominate the Proposed Persons as
directors are for his own financial gain and to obtain control of
the Company.
The Independent Directors are open and fully supportive of
further appointments to the board of directors. The Independent
Directors however believe that a proper recruitment process should
take place to identify suitable candidates who enhance the
experience, skill set and corporate governance of the board, as
opposed to nominees of Mr Kitous.
Any further announcements will be made as required in due
course.
This announcement contains inside information for the purposes
of Article 7 of EU Regulation 596/2014 (which forms part of
domestic UK law pursuant to the European Union (Withdrawal) Act
2018).
The Independent Directors of the Company accept responsibility
for the content of this announcement.
For further information, please contact:
Comptoir Group plc Tel: +44 (0)20 7486 1111
Chaker Hanna, CEO
Michael Toon, CFO
Canaccord Genuity Limited (NOMAD Tel: +44 (0)20 7523 8000
and Broker)
Max Hartley
Bobbie Hilliam
Georgina McCooke
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END
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