TIDMFUL

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 GBP82.7m (2021: GBP40.3m) 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 GBP20.3m (2021: GBP9.0m) and Adjusted Headline EBITDA* of GBP12.4m excluding IFRS 16 (2021: GBP1.9m)

-- EBITDA* of GBP19.5m (2021: GBP8.7m) and Adjusted EBITDA* of GBP11.4m excluding IFRS 16 (2021: GBP1.6m)

   --           Headline operating profit of GBP9.0m (2021: loss of GBP2.2m) 
   --           Impairment charge on property, plant and equipment of GBP0.6m (2021: GBP1.0m) 
   --           Operating profit of GBP6.7m (2021: loss of GBP4.8m) 
   --           Profit before tax of GBP3.9m (2021: loss of GBP7.5m) 

-- Strong financial position with net cash excluding lease liabilities recognised under IFRS 16 as at 27 March 2022 of GBP4.3m (2021: net debt GBP3.6m), an improvement of GBP7.9m

   --           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 GBP5.1m

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           fulhamshore@hudsonsandler.com 
   Alex Brennan / Lucy Wollam              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 GBP82.7m, up 105% from last year's GBP40.3m last year and up 20.6% from GBP68.6m 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 GBP4.3m. This was a positive swing of GBP7.9m during the financial year from a net debt position of GBP3.6m in March 2021 and an even bigger change, of some GBP13.8m, from the net debt position of GBP9.5m 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 GBP2m 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 GBP15.9m. This is made up of a revolving credit facility of GBP17.0m, of which GBP1.85m is drawn and an overdraft facility of GBP0.75m.

During the financial year ended 27 March 2022, the Group repaid the remaining GBP9.3m 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 GBP4.3m (2021: net debt of GBP3.6m).

As at 19 July 2022, net cash (excluding lease liabilities recognised under IFRS 16) was GBP5.1m. Together with undrawn facilities, the Group has financial headroom of some GBP21m.

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        Year 
                                            ended       ended 
                                         27 March    28 March     Change 
                                             2022        2021 
 For continuing operations                   GBPm        GBPm          % 
 
 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               No.         No. 
  in the UK 
  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        Year 
                                        ended       ended 
                                     27 March    28 March 
                                         2022        2021 
                                         GBPm        GBPm 
 
 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 GBP82.7m from GBP40.3m 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 GBP20.3m (2021: GBP9.0m), an increase of 125.6% while Adjusted Headline EBITDA for the year was GBP12.4m (2021: GBP1.9m), 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 GBP2.4m (2021: GBP10.3m) 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 GBP0.8m (2021: GBP8.5m) 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 GBP11.4m (2021: GBP11.1m) following the number of new restaurants opened during the year and the previous year. The Group incurred one off costs in the year of GBP0.6m (2021: GBP1.0m) 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: GBP0.5m) 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 GBP6.7m (2021: loss of GBP4.8m).

With our new openings, we have invested GBP0.7m (2021: GBP0.2m) in pre-opening costs. Finance costs have increased to GBP2.9m (2021: GBP2.8m). The Group's gross bank debt decreased to GBP1.9m (2021: GBP15.9m) with net debt reduced during the year. Overall this has resulted in a profit before taxation of GBP3.9m (2021: loss GBP7.5m).

The Group's tax charge was GBP0.2m (2021: credit of GBP1.2m). 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 GBP3.7m (2021: loss GBP6.3m).

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 GBP1.2m 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 GBP14.8m to GBP24.5m 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 GBP7.8m (2021: GBP1.7m), 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 GBP19.7m (2021: GBP6.2m) 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 GBP19.7m (2021: GBP6.2m).

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 GBP14.25m to GBP17.0m. 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 GBP17.75m including the existing GBP0.75m overdraft facility.

During the year ended 27 March 2022, the Company received funds on exercise of outstanding share options of GBP0.5m (2021: GBP0.5m).

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 GBP0.4m historic deferred rents (2021: GBP2.8m).

Resultant net cash from our activities excluding lease liabilities recognised under IFRS 16 as at 27 March 2022 was GBP4.3m (2021: net debt GBP3.6m). Since the year end, as at 19 July 2022, the Group's net cash (excluding lease liabilities recognised under IFRS 16) position improved to GBP5.1m.

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        Year 
                                                            ended       ended 
                                                         27 March    28 March 
                                                             2022        2021 
                                                Notes     GBP'000     GBP'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    28 March   27 March   28 March 
                                                   2022        2021       2022       2021 
                                                GBP'000     GBP'000    GBP'000    GBP'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 
                                                                Reverse                   Equity 
                                                     Merger        Acq-                   Share- 
                              Share       Share      Relief    uisition     Retained    holders' 
                            Capital     Premium     Reserve     Reserve     Earnings       Funds 
                            GBP'000     GBP'000     GBP'000     GBP'000      GBP'000     GBP'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

 
                                                             Merger 
                                       Share       Share     Relief     Retained       Total 
                                     Capital     Premium    Reserve     Earnings      Equity 
                                     GBP'000     GBP'000    GBP'000      GBP'000     GBP'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        Year         Year        Year 
                                                    ended       ended        ended       ended 
                                                 27 March    28 March     27 March    28 March 
                                                     2022        2021         2022        2021 
                                                  GBP'000     GBP'000      GBP'000     GBP'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 (GBP'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 GBP1.5m from GBP0.5m 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 GBP5.1m thus having headroom of some GBP21m 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 GBP91,000 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

 
 1   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     Franco 
                                     Greek      Manca           Other 
                                   segment    segment     unallocated       Total 
                                   GBP'000    GBP'000         GBP'000     GBP'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 GBP88,000 (2021:GBPnil) 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 GBP330,000 (2021: GBP542,000).

For the year ended 28 March 2021:

 
                                     The Real     Franco 
                                        Greek      Manca           Other 
                                      segment    segment     unallocated       Total 
                                      GBP'000    GBP'000         GBP'000     GBP'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: GBP1,195,000.

 
 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        Year 
                                                                           ended       ended 
                                                                        27 March    28 March 
                                                                            2022        2021 
                                                                         GBP'000     GBP'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                                                       4,423       4,883 
     Leased assets                                                         6,869       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 GBPnil (2021: GBP483,000) 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        Year 
                                                                                                     ended       ended 
                                                                                                  27 March    28 March 
                                                                                                      2022        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        Year 
                                                       ended       ended 
                                                    27 March    28 March 
                                                        2022        2021 
                                                     GBP'000     GBP'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        Year 
                                                               ended       ended 
                                                            27 March    28 March 
                                                                2022        2021 
                                                             GBP'000     GBP'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 GBP38k (2021: GBP147k) 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 GBP385,000 (2021: GBP184,000) as well as gains of GBP198,000 (2021: GBP39,000) 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 GBP2,057,000 (2021: GBP600,000).

 
 4   FINANCE COSTS 
 
 
                                          Year        Year 
                                         ended       ended 
                                      27 March    28 March 
                                          2022        2021 
                                       GBP'000     GBP'000 
 
  Interest expenses on bank loans 
   and overdrafts                          362         457 
  Interest on lease liabilities          2,501       2,297 
 
                                         2,863       2,754 
 
 
 
 5   INCOME TAX EXPENSE 
 
 
                                                      Year        Year 
                                                     ended       ended 
                                                  27 March    28 March 
                                                      2022        2021 
                                                   GBP'000     GBP'000 
  Income tax expense on continuing 
   operations 
  Based on the result for the year: 
  UK corporation tax at 19% (2021:                     627           - 
   19%) 
  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        Year 
                                                       ended       ended 
                                                    27 March    28 March 
                                                        2022        2021 
                                                     GBP'000     GBP'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        Year 
                                                       ended       ended 
                                                    27 March    28 March 
                                                        2022        2021 
                                                     GBP'000     GBP'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        Year 
                                                       ended       ended 
                                                    27 March    28 March 
                                                        2022        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         Year 
                                     ended        ended 
                                  27 March     28 March 
                                      2022         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     Software       Brand     Goodwill       Total 
                                  GBP'000      GBP'000     GBP'000      GBP'000     GBP'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 GBP1,774,000 relates to The Real Greek and is attributable to its cash generating unit.

Goodwill of GBP18,931,000 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 GBP74,970,000 and GBP134,800,000 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                                                                     Furniture, 
                                                Right                        fixtures           Assets 
                            Leasehold          of use       Plant and             and            under 
                         improvements          assets       equipment        fittings     construction           Total 
                              GBP'000         GBP'000         GBP'000         GBP'000          GBP'000         GBP'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 GBP348,000.

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

 
                                27 March      27 March     28 March      28 March 
                                    2022          2022         2021          2021 
                                 GBP'000       GBP'000      GBP'000       GBP'000 
                              Impairment   Recoverable   Impairment   Recoverable 
                                  charge        amount       charge        amount 
 For continuing operations 
 Franco Manca restaurant               -             -          240             - 
  1 
 Franco Manca restaurant               -             -          252             - 
  2 
 Franco Manca restaurant 
  3                                    -             -           56           130 
 Franco Manca restaurant 
  4                                    -             -          144            83 
 
 Total for Franco Manca 
  operating segment                    -             -          692           213 
 
 The Real Greek restaurant             -             -          321             - 
  1 
 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                                                     Furniture, 
                                                                      fixtures 
                                          Leasehold     Plant and          and 
                                       improvements     equipment     fittings       Total 
                                            GBP'000       GBP'000      GBP'000     GBP'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.

 
 9   INVESTMENTS 
 
 
                                           27 March   28 March 
                                               2022       2021 
                                            GBP'000    GBP'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 GBP66,000 (2021: GBPnil) 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   28 March 
                                     2022       2021 
                                  GBP'000    GBP'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 
 
 
 
 9   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      Proportion           Nature of business 
                                          of              of 
                                     Holding    shares held, 
                                                   ownership 
                                                    interest 
                                                         and 
                                                voting power 
 
   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           Ordinary            100%          Restaurant property 
    Limited* 
   FM High Holborn Limited          Ordinary            100%          Restaurant property 
   FM London Bridge Limited         Ordinary            100%          Restaurant property 
   Franco Manca Chelmsford          Ordinary            100%          Restaurant property 
    Limited 
   Franco Manca Holdings            Ordinary            100%                      Dormant 
    Limited 
   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         Ordinary            100%          Restaurant property 
    Limited 
   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   28 March   27 March        28 March 
                             2022       2021       2022            2021 
                          GBP'000    GBP'000    GBP'000         GBP'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 GBP14,690,000 (2021: GBP6,509,000).

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

 
          TRADE AND OTHER PAYABLES 
 
 
  13 
                                                                      Group        Parent company 
                                                        27 March   28 March   27 March   28 March 
                                                            2022       2021       2022       2021 
                                                         GBP'000    GBP'000    GBP'000    GBP'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.

 
          BORROWINGS 
 
 
  14 
                                                                   Group        Parent company 
                                                     27 March   28 March   27 March   28 March 
                                                         2022       2021       2022       2021 
                                                      GBP'000    GBP'000    GBP'000    GBP'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 GBP 17,000,000 (2021: GBP14,250,000), a Coronavirus Large Business Interruption Loan facility ("CLBIL") of GBPNil (2021: GBP10,750,000), expiring between one and five years and a bank overdraft facility, repayable on demand, of GBP750,000 (2021: GBP750,000) 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   28 March 
                                                            2022       2021 
                                                         GBP'000    GBP'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   28 March   27 March   28 March 
                                                     2022       2021       2022       2021 
                                                  GBP'000    GBP'000    GBP'000    GBP'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 
                                                      Between        More 
                                        Less than       1 and        than 
                                           1 year     5 years     5 years       Total 
                                          GBP'000     GBP'000     GBP'000     GBP'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 
                                                      Between        More 
                                        Less than       1 and        than 
                                           1 year     5 years     5 years       Total 
                                          GBP'000     GBP'000     GBP'000     GBP'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 
                                                      Between 
                                        Less than       1 and 
                                           1 year     5 years       Total 
                                          GBP'000     GBP'000     GBP'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 
                                                      Between 
                                        Less than       1 and 
                                           1 year     5 years       Total 
                                          GBP'000     GBP'000     GBP'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 GBP17,250,000 (2021: GBP14,250,000), a committed long term Coronavirus Large Business Interruption Loan facility of GBPNil (2021: GBP10,750,000) and short term bank overdraft facilities available to manage its liquidity as at 27 March 2022 of GBP750,000 (2021: GBP750,000).

 
 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   28 March   27 March   28 March 
                                      2022       2021       2022       2021 
                                   GBP'000    GBP'000    GBP'000    GBP'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 GBP42,084 (2021: GBP79,250).

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   28 March   27 March   28 March 
                                                     2022       2021       2022       2021 
                                                  GBP'000    GBP'000    GBP'000    GBP'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 GBP69,000) 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        28 March   27 March        28 March 
                                                2022            2021       2022            2021 
                                             GBP'000         GBP'000    GBP'000         GBP'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 GBP290,000 deferred tax charge to reserves (2021: GBP290,000 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        28 March   27 March        28 March 
                                            2022            2021       2022            2021 
                                         GBP'000         GBP'000    GBP'000         GBP'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 GBP1,984,000 (2021: GBP981 ,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 GBP496,000 (2021: GBP186,000) 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        28 March   27 March        28 March 
                                                                         2022            2021       2022            2021 
                                                                      GBP'000         GBP'000    GBP'000         GBP'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:

 
                                           Nominal         Number 
                                 Type    value per    of ordinary 
                                   of     ordinary         shares 
   Amount paid per share       shares        share            No. 
                                               GBP 
 GBP0.01                     Ordinary         0.01     11,131,070 
 GBP0.06                     Ordinary         0.01      3,332,842 
 GBP0.1015                   Ordinary         0.01      1,130,000 
 GBP0.1775                   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 GBP80,000 (2021: GBP91,000).

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        Year 
                                      ended       ended 
                                   27 March    28 March 
                                       2022        2021 
                                        No.         No. 
                                       '000        '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         Year 
                                          ended        ended 
                                       27 March     28 March 
                                           2022         2021 
                                            GBP          GBP 
 
  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                                  Weighted                               Weighted 
   exercise                  Weighted        average                Weighted        average 
   prices         Number      average      remaining     Number      average      remaining 
                      of     exercise    contractual         of     exercise    contractual 
                  shares        price           life     shares        price           life 
                    '000          GBP         months       '000          GBP         months 
  Unapproved 
  GBP0.1015           72       0.1015             75         72       0.1015             75 
  GBP0.11         22,097       0.1100             37     22,097       0.1100             37 
  GBP0.1125        1,175       0.1125             88          -            -              - 
  GBP0.16             95       0.1600            109          -            -              - 
  GBP0.17625         585       0.1763             63        585       0.1763             63 
  GBP0.1775           81       0.1775             59         81       0.1775             59 
  GBP0.1825          921       0.1825             51        921       0.1825             51 
 
 
                  25,026       0.1147             41     23,756       0.1146             38 
 
  CSOP 
  GBP0.1015          388       0.1015             75        388       0.1015             75 
  GBP0.1125        1,725       0.1125             88          -            -              - 
  GBP0.16            305       0.1600            109          -            -              - 
  GBP0.17625         815       0.1763             63        815       0.1763             63 
  GBP0.1775          369       0.1775             59        369       0.1775             59 
  GBP0.1825        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                                  Weighted                               Weighted 
   exercise                  Weighted        average                Weighted        average 
   prices         Number      average      remaining     Number      average      remaining 
                      of     exercise    contractual         of     exercise    contractual 
                  shares        price           life     shares        price           life 
                    '000          GBP         months       '000          GBP         months 
  EMI 
  GBP0.06          3,332       0.0600              7      3,332       0.0600              7 
 
                   3,332       0.0600              7      3,332       0.0600              7 
 
  Unapproved 
  GBP0.06         13,805       0.0600             43     13,805       0.0600             43 
  GBP0.1015        1,492       0.1015             87          -            -              - 
  GBP0.11         23,373       0.1100             49     23,373       0.1100             49 
  GBP0.1125        1,595       0.1125            100          -            -              - 
  GBP0.17625         785       0.1763             75        785       0.1763             75 
  GBP0.1775          162       0.1775             71        162       0.1775             71 
  GBP0.1825        1,421       0.1825             63      1,421       0.1825             63 
 
 
                  42,633       0.0975             52     39,546       0.0967             48 
 
  CSOP 
  GBP0.1015        1,518       0.1015             87          -            -              - 
  GBP0.1125        2,180       0.1125            100          -            -              - 
  GBP0.17625         915       0.1763             75        915       0.1763             75 
  GBP0.1775          538       0.1775             71        538       0.1775             71 
  GBP0.1825        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 GBP0.144 (2021: GBP 0.0475) to GBP0.1985 (2021: GBP0.1650). The share price as at 27 March 2022 was GBP0.155 (2021: GBP 0.1525) . The average share price for options exercised during the year was GBP0.179 (2021: GBP0.12)

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        Year 
                                         ended       ended 
                                      27 March    28 March 
                                          2022        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        Year 
                                              ended       ended 
                                           27 March    28 March 
                                               2022        2021 
                                               '000        '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                                  Weighted                               Weighted 
   exercise                  Weighted        average                Weighted        average 
   prices         Number      average      remaining     Number      average      remaining 
                      of     exercise    contractual         of     exercise    contractual 
                  shares        price           life     shares        price           life 
                    '000          GBP         months       '000          GBP         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                                  Weighted                               Weighted 
   exercise                  Weighted        average                Weighted        average 
   prices         Number      average      remaining     Number      average      remaining 
                      of     exercise    contractual         of     exercise    contractual 
                  shares        price           life     shares        price           life 
                    '000          GBP         months       '000          GBP         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.

 
 19   NOTE TO CASH FLOW STATEMENTS 
 

Reconciliation of net cash flows from operating activities

 
                                                       Group            Parent company 
                                            Year        Year        Year        Year 
                                           ended       ended       ended       ended 
                                        27 March    28 March    27 March    28 March 
                                            2022        2021        2022        2021 
                                         GBP'000     GBP'000     GBP'000     GBP'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) 
 
 
 
 
 19   NOTE TO CASH FLOW STATEMENTS (continued) 
 

Changes in net debt from financing activities

 
 Group                                       Bank            Bank                          Lease          Lease 
                             Cash           loans           loans           Total    liabilities    liabilities 
                              and             due             due          before            due            due 
                             Cash          within           after           lease         within          after 
                      Equivalents          1 year          1 year     liabilities         1 year         1 year        Total 
                          GBP'000         GBP'000         GBP'000         GBP'000        GBP'000        GBP'000      GBP'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 GBP4,291,000 (2021: net debt of (GBP3,580,000)).

 
 19   NOTE TO CASH FLOW STATEMENTS (continued) 
 
 
  Parent Company                          Bank         Bank 
                              Cash       loans        loans 
                               and         due          due 
                              Cash      within        after 
                       Equivalents      1 year       1 year        Total 
                           GBP'000     GBP'000      GBP'000      GBP'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 
 
 
   20 
 
 

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

 
                                      Group        Parent company 
                        27 March   28 March   27 March   28 March 
                            2022       2021       2022       2021 
                         GBP'000    GBP'000    GBP'000    GBP'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 
 
 
   21 
 
 

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

 
                                                   Group        Parent company 
                                     27 March   28 March   27 March   28 March 
                                         2022       2021       2022       2021 
                                      GBP'000    GBP'000    GBP'000    GBP'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 GBP2,056,539 (2021: GBP561,000).

Other related party transactions

During the year, the Group was invoiced GBPnil (2021: GBP58,000) 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 GBP43,500 (2021: GBP71,000) 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 GBPNil (2021: GBPNil). During the year Meatailer Limited invoiced the Group and Company GBPnil (2021: GBP48,000) 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 GBPNil (2021: GBPNil).

During the year ended 27 March 2022, the Group made an additional investment of GBP66,000 (2021: GBPnil) 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.

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        Year 
                                                  ended       ended 
                                               27 March    28 March 
                                                   2022        2021 
                                                GBP'000     GBP'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        Year 
                                                  ended       ended 
                                               27 March    28 March 
                                                   2022        2021 
                                                GBP'000     GBP'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   28 March 
                                          2022       2021 
                                       GBP'000    GBP'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 GBPNil (2021: GBPNil).

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END

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July 21, 2022 02:00 ET (06:00 GMT)

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