TIDMLGRS
RNS Number : 0979Z
Loungers PLC
16 September 2020
16 September 2020
Loungers plc
("Loungers")
Audited results for the 52 weeks ended 19 April 2020
Strong delivery of strategic and financial goals pre Covid-19
lockdown and material market out-performance post re-opening
Loungers ("the Group") is pleased to announce its audited
results for the 52 weeks ended 19 April 2020 ("FY20"). Loungers is
an operator of 167 café/bar/restaurants across England and Wales
under two distinct but complementary brands, Lounge and Cosy Club.
The Group's sites offer something for everyone regardless of age,
demographic or gender and the Group operates successfully in a
diverse range of different sites and locations across England and
Wales.
Finance Summary
IFRS 16 IAS 17
Year Year Change Year Year Change
ended ended ended ended
19 April 21 April 19 April 21 April
2020 2019 2020 2019
GBP000 GBP000 GBP000 GBP000
Revenue 166,502 152,999 +8.8% 166,502 152,999 +8.8%
Adjusted EBITDA (1) 28,767 28,541 +0.8% 18,813 20,582 -8.6%
-1.4 -2.2
Adjusted EBITDA margin (%) 17.3% 18.7% ppts 11.3% 13.5% ppts
Loss before tax (14,781) (6,700) (13,020) (4,989)
Adjusted profit / (loss) before
tax (2) 2,002 (6,238) 3,763 (4,527)
Adjusted diluted earnings
/ (losses) per share (p) 2.4 (35.4) 3.2 (28.0)
Net debt 139,895 254,750 34,956 165,612
Financial and Operational Highlights - pre Covid
-- Strong financial performance ahead of Covid-19 lockdown
-- Like for like ("LFL") sales growth of +4.5% and total sales
growth of 21.9% in the 44 weeks to 23 February 2020
-- 21 new sites opened
-- Continued investment in and evolution of both brands in respect of menu, design, and people
Financial and Operational Highlights - during Covid
-- Controlled lockdown ahead of the Government's announcement on 20 March 2020
-- GBP15m additional credit facility arranged and GBP8.1m (net)
new equity raised to provide liquidity in the event of a worst-case
scenario prolonged lockdown and to allow the roll-out to
restart
-- Phased re-opening of the estate with all sites trading by 7 August
Current Trading
-- Significant market out-performance since re-opening with net
LFL sales growth of +29.9% from 4 July to 13 September 2020
-- LFL sales benefit from the impact of Eat Out to Help Out and
the VAT reduction on food and non-alcoholic drinks
-- Excluding these positive impacts, LFL sales have been
positive over the 9 weeks from 13 July to 13 September 2020
-- Non-property net debt at 19 April 2020 of GBP35.0m improved
to GBP24.5m at 6 September (post adjustment to treat deferred
Covid-19 liabilities as if paid)
-- Two new sites have opened, and the Group cautiously plans to
open four further new sites by the end of the current financial
year
Nick Collins, Chief Executive Officer of Loungers said:
"I am delighted with the strength of our performance since
re-opening which highlights how strategically well-positioned we
are in both Lounge and Cosy Club.
"Our like for like sales of +30% over the last 10 weeks includes
the remarkable four weeks of the 'Eat Out to Help Out' scheme and
the government's support for our sector continues to be much
appreciated. More importantly, however, having fully re-opened our
underlying sales are in growth even without this support. We have
focused on providing amazing hospitality, whilst reassuring our
teams and customers the Lounges and Cosy Clubs are a safe
environment, and our customers have been quick to return. During
lockdown we were confident the flexibility of our all-day offer,
our suburban and market-town locations and our focus on hospitality
and community would ensure we emerged strongly. I believe these
results have confirmed that to be the case.
"Clearly we don't know what is around the corner. We anticipate
further interruption to trade on either a local or regional basis
in the short-term and have the balance sheet and liquidity to
withstand significant further Covid impacts. Covid has, however,
strengthened our belief in the potential scale of both brands in
the longer-term and the behavioural shifts being witnessed further
underline this. In the second half of the year we will cautiously
re-start the roll-out and we are excited about the property
opportunities available to us and getting back to opening 25 sites
a year in due course.
"I would like to thank our team across the UK for their
extraordinary contribution over the last six months. It has been an
immensely challenging period and their determination and hard-work
have allowed us to not just get through it, but to emerge a better
business ."
(1) Adjusted EBITDA is calculated as operating profit before
depreciation, pre-opening costs, exceptional costs, and share-based
payment charges.
(2) Adjusted profit / (loss) before tax is calculated as profit
/ loss before tax before exceptional costs.
For further information please contact:
Loungers plc Via Instinctif Partners
Nick Collins, Chief Executive Officer
Gregor Grant, Chief Financial Officer
GCA Altium Limited (Financial Adviser and Tel: +44 (0) 20
NOMAD) 7484 4040
Sam Fuller / Katherine Hobbs / Tim Richardson
Liberum Capital Limited (Joint Broker) Tel: +44 (0) 20
Andrew Godber / John Fishley 3100 2000
Peel Hunt LLP (Joint Broker) Tel: +44 (0)20 7418
Dan Webster / George Sellar 8900
Instinctif Partners (Financial Public Relations) Tel: +44 (0) 207
Justine Warren / Matthew Smallwood 457 2020
This announcement is released by Loungers and contains inside
information for the purposes of Article 7 of the Market Abuse
Regulations (EU) 596/2014 (MAR), and is disclosed in accordance
with the Company's obligations under Article 17 of MAR. This
announcement is being made on behalf of the Company by Nick
Collins, Chief Executive Officer of Loungers.
Notes to Editors
Loungers operates through its two complementary brands - Lounge
and Cosy Club - in the UK hospitality sector. A Lounge is a
neighbourhood café/bar combining elements of coffee shop culture,
the British pub and dining. There are 137 Lounges nationwide.
Lounges are principally located in secondary suburban high streets
and small town centres. The sites are characterised by informal,
unique interiors with an emphasis on a warm, comfortable
atmosphere, often described as a "home from home". Cosy Clubs are
more formal bars/restaurants offering reservations and table
service but share many similarities with the Lounges in terms of
their broad, all-day offering and their focus on hospitality and
culture. Cosy Clubs are typically located in city centres and large
market towns. Interiors tend to be larger and more theatrical than
for a Lounge, and heritage buildings or first-floor spaces are
often employed to create a sense of occasion. There are 30 Cosy
Clubs nationwide.
Chairman's Statement
Introduction
At the turn of the calendar year I imagined that my inaugural
Loungers plc Chairman's statement would be a relatively
straightforward affair. Whilst we are reporting on FY20, the
reality is that we are providing more detailed commentary on the
final weeks of FY20 and the subsequent months of the current
financial year, in regard to how the business has dealt with the
monumental challenge of Covid-19 in particular. Consequently, and
for good reason, my statement is a lengthy one.
Having successfully listed the business in April 2019, I think
it's fair to say we always expected FY20 would be a challenging
year as the business adjusted to life as a plc. Little did we know
that a far greater challenge lay ahead and, that by the end of the
financial year, we'd have a business that was generating no revenue
and we'd have no certainty as to when we would be permitted to
reopen.
There are many aspects of the events of the last few months that
will live with us for many years to come. The business has faced
enormous challenges and I am extremely proud of the roles the
Board, the executive/senior management team and the ops team have
played in dealing with these challenges head-on and making the
right calls at the right time.
Putting the impact of Covid aside, it was a historic year for
Loungers and, as a co-founder of the business, I am extremely proud
that Loungers is a plc. I am also thrilled that we currently have
480 employees who are now shareholders in the Company and very much
look forward to being able to see the success of Loungers shared
with an ever-increasing number of our people in future.
Strategic
The business continued to trade very strongly right up until the
week before lockdown and we remained on track to meet the
objectives we had set out at the time of the IPO.
We continued to deliver sector-leading like for like sales and
were expanding at a rate of 25 new sites a year. Pleasingly, we
opened some particularly profitable sites over the course of the
financial year with FY20 new openings looking like an especially
strong vintage.
We continued to evolve our offer in both brands, making a number
of improvements to our food menus and undertaking a significant and
exciting overhaul of our drinks offering. We also continued to see
margin improvement as we increasingly reaped the benefits of
greater scale.
Ultimately FY20 saw an 8.8% increase in net turnover to
GBP166.5m (FY19: GBP153.0m) and, whilst it is pleasing to register
another year of year-on-year growth, Covid-19 clearly stopped us in
our tracks in March, five weeks prior to our year end.
The Team
Having successfully listed the business against a challenging
backdrop in April 2019 (as Brexit negotiations to-ed and fro-ed),
the executive team immediately set about executing and delivering
the plan.
We genuinely believe that the Loungers team is operationally one
of the finest in the sector. Under Nick Collins' collaborative and
steadfast leadership, everyone has responded to the monumental
challenge brought about by Covid-19, clearly demonstrating the
talent and tenacity we have within our ranks.
I'd like to thank our teams at every level but would like to
reserve special praise for the immense effort put in by the small
group of head office staff who worked tirelessly throughout
lockdown, often in very difficult circumstances, to ensure the
business was in the very best possible position to rise to the
challenges of the last few months.
The Board
I am also delighted at how well the relationship between the
executive team and non-executive directors has developed and I'd
like to thank the non-executive directors for their guidance and
contribution over the last 16 months in bringing challenge, wisdom
and experience to the Loungers' table. When assembling the plc
Board, the executive team were keen to ensure that Board meetings
retained the same level of intensity and challenge that we'd been
accustomed to under private equity partnership and I am delighted
that we have achieved this as a public company.
I would also like to take this opportunity to thank the
non-executive directors for their dedication and commitment to the
business during the period of closure resulting from Covid-19.
COVID-19
Having temporarily closed the entire business and secure in the
knowledge that the livelihoods of our workforce would be protected
through the Coronavirus Job Retention Scheme, the executive team
worked closely with the Board to set about ensuring the business
had sufficient liquidity to survive a prolonged period of full
closure, well beyond 2020 should that be required. We agreed an
additional GBP15m revolving credit facility with our existing
lenders and raised a further GBP8.1m through the issue of equity.
We were grateful and extremely encouraged by the support from our
shareholders, which not only ensured the Placing was successful but
was ultimately over-subscribed.
With the liquidity of the business secured, the executive/senior
management team set about tackling a number of significant
challenges. The key areas of focus were on culture and
communication, rent negotiations and the reopening of 27 sites
during lockdown for takeout. We also started planning the reopening
of the business and considered what changes we would need to make
to menu, service style and site layouts.
This was a significant piece of work and required the team to be
very entrepreneurial and at times fleet of foot - our 'at-seat'
ordering capability being an excellent example of something that
has been an undeniable game-changer for the business and was
developed and implemented in just four weeks. With regards to
social distancing, we adopted a positive mindset and approached
what we needed to do with a mentality that we had decided to make
the changes ourselves and not because we had been forced to. I
genuinely believe that the team could not have done a more sterling
job and I believe that the decisions and changes we made, and
subsequently implemented, ensured the business was very much on the
front foot when we were permitted to reopen. I am also of the view
that the unprecedented challenges of lockdown resulted in an
acceleration of changes in the business that had been more mid to
long term objectives. As a result, we face the future in a much
stronger, and better equipped, position.
Over a seven-week period from early June, I made a conscious
effort to visit 103 of our sites personally, with our logistics
team who were busy removing furniture to go into storage and
delivering our bespoke social distancing partitions. This gave me
an opportunity to spend time with our operators, to catch up with
some of our teams as they returned to work ahead of reopening and
to oversee the implementation of our plan to ensure our sites felt
safe and reassuring but that, critically, they still retained our
unique look and feel and very much felt like a Lounge or Cosy Club.
It was a gruelling but hugely rewarding few weeks that left me
feeling very positively charged at how our operators and teams felt
about the way we had looked after them during lockdown and about
how excited they were to welcome back their customers. I was also
hugely encouraged at how good, and normal, our sites looked -
whilst adhering to Covid-19 social distancing requirements, which I
genuinely believe has been a major reason as to why we have
reopened so strongly. It was also really encouraging to see how
busy the vast majority of the high streets and locations we operate
from were ahead of us reopening and I felt cautiously optimistic
that we would trade significantly better than we have anticipated.
Consequently, I wasn't surprised that within a week of our initial
phase of reopening we opted to accelerate the reopening process,
which resulted in all 165 sites being reopen by 7(th) August.
Our approach to reopening has had a number of benefits. Most
notably, we have learnt and adapted to trading in a Covid-compliant
environment, which has enabled us to improve the overall customer
experience. We also fully benefitted from the Eat Out to Help Out
(EOTHO) initiative which has resulted in record sales for the
business during the month of August. We are also delighted to have
over 95% of our team back from furlough and doing what they do
best.
The Future
We are clearly still in unprecedented times and the coming weeks
and months are almost certainly going to be uncertain at best and
possibly challenging. That said I think we have every reason to be
optimistic and excited for the future. Trading since we reopened
has been remarkable and, whilst we have clearly benefited
enormously from the Government's EOTHO scheme, to date trading
outside of the EOTHO days has been - and continues to be - very
encouraging. Having reopened has given us significant competitive
advantage over those businesses that have been slower to do so.
With the undeniable change underway in the way people live, and
more specifically work, we believe we are extremely well-placed to
benefit. The suburban and small town locations of the vast majority
of our Lounge estate have remained strong and our large, airy Cosy
Club venues - coupled with an offer that is sufficiently
differentiated from our competitors - mean that both brands are in
a strong position to prosper. Our lack of exposure to central
London and travel hubs has meant that the strength of performance
across the business is both sustainable and consistent. This,
together with a reduction in the number of food and drink
operators, positions Loungers well to benefit from a significant
contraction in supply.
Following reopening, we are sufficiently confident and excited
to be resuming our roll-out - albeit we will do so cautiously and
it will take some months for us to get back up to a run-rate of 25
sites a year. However, we have some high quality sites within our
current pipeline and will be able to benefit from some exciting
opportunities against a backdrop of an extremely soft property
market.
Our opportunity remains exciting as we have barely reached 30%
of the potential scale in the UK of both brands and, in the case of
Lounge, our stated target of 400 sites feels increasingly
conservative. Our team has the drive, determination, and talent to
deliver our long-term objectives but, importantly, working through
the challenges of lockdown has further enhanced the entrepreneurial
flame inherent within the business. I genuinely believe this could
be 'our time' and the burning ambition within Loungers has never
been stronger.
Alex Reilley
Chairman
16 September 2020
Chief Executive's Statement
Introduction
It was impossible to imagine that a year which started with the
landmark IPO of the Group would end with all our sites closed due
to Covid-19.
For the large part of the year the Group continued to achieve
the strategic goals it had set out at the time of the IPO:
-- Market leading LFL sales growth across all site age cohorts, primarily driven by volume;
-- Margin improvement as we continued to benefit from
operational gearing and economies of scale;
-- Progressing towards a self-financing roll-out;
-- Continuation of the roll-out of Lounge and Cosy Club estates
at a rate of 25 sites a year, most importantly opening better sites
and benefitting from an increasingly tenant friendly property
market.;
-- Enhancing the customer offer and our hospitality through the
evolution of our menus and constantly challenging ourselves to
improve our culture and community-led proposition.
Prior to the impact of Covid-19 we were delighted with the
progress the business had made and that it had continued to
demonstrate how our unique all-day trading model with broad appeal
was winning in an evolving sector.
The enormous challenge of closing and subsequently re-opening
the estate is one we approached head-on and positively. Our
reaction to the challenge will ensure we emerge a better business.
We used the period of lockdown to evolve the offer and introduce
bold changes which might otherwise have taken significantly longer.
The estate was fully reopened by 7(th) August with our sites
reconfigured to provide social distancing and our teams fully
trained to reassure customers they are in safe hands. Most
importantly hospitality remains at the core of everything we
do.
We were confident the business would emerge strongly
post-lockdown and this has been evidenced by the strength of our
trading since re-opening, with like for like ("LFL") sales of
+29.9% on a net of VAT basis in the period from 4 July to 13
September. Our community focus in market towns and suburbs, with no
exposure to central London, tourism or business districts has meant
our customers have returned quickly to both Lounge and Cosy Club.
Our belief in the potential scale of both brands has been
strengthened, and we look forward to returning to rolling-out new
sites in due course.
The year pre-Covid-19
Evolution
Evolution in both brands continued, benefitting from our broad
menus and the fact that we are not wedded to any single cuisine.
Our vegan, gluten free and allergen-friendly menus continued to
develop and grow and remain a key differentiator. Alongside this,
we continued to add more resource to our menu development team,
focusing on ingredient rationalisation and quality. Over the course
of the year our dishes improved and continued to become more
consistent.
On the drinks side we saw considerable change in our draught
line-up, switching Stella, Becks Vier and Cruiser, for Moretti,
Amstel, and Punk IPA. As a result of this switch we saw higher
average spend and improved growth in our evening sales, a
previously stated goal.
Our Reset project in the Lounge kitchens continued, with
investment in a further 26 sites. This investment is resulting in
more efficient processes, improved ticket times, better information
and reduced staff turnover. Whilst this project was paused due to
Covid-19 we look forward to getting it back on track. The
combination of additional resource on the menu development side
alongside investment in the kitchens will result in quicker, more
consistent service for customers, improvement in our margins and
better working conditions for our teams.
Having unique, individual designs for each site ensures the look
and feel of the Lounges and Cosy Clubs continues to evolve. Over
the course of the year, evolution in terms of our back bars and
furniture has helped target evening sales. In addition, we carried
out splash and dash investments at seven sites, ensuring each site
within the estate is in prime condition and benefits from the
continued evolution of our design.
The roll-out, property and pipeline
During the year and prior to the Covid-19 closure we opened 16
Lounges and five Cosy Clubs and were on track to open 25 sites in
the financial year. Over the past five years, we have become
comfortable with opening sites at this rate and this is reflected
in the performance of our FY20 new site openings.
Through 2019 and into 2020 we benefitted from an increasingly
tenant friendly property market. As a result of this we secured
excellent sites in strong locations with great pitch, and this was
reflected in the performance of our new site openings. Loungers
typically converts A1 retail premises to A3 use and the increase in
retail CVAs has meant we are seeing more opportunities in those
targeted locations where we know we will perform strongly. Examples
of this are sites such as Fosso Lounge in Wells and Cobrizo Lounge
in Newbury.
Our new site openings also continued to demonstrate the
underlying potential scale of the Lounge and Cosy Club brands. Our
openings in Wells, Carmarthen and Chorley illustrate our ability to
trade successfully in towns with relatively small populations
across the country, whilst the opening of Cosy Club at Mermaid Quay
in Cardiff saw us operating two Cosy Clubs in the same city for the
first time.
As we went into lockdown our pipeline remained very strong with
contracts exchanged on eight sites which have not yet opened. These
include Lounges in Sittingbourne, Wolverhampton and Welwyn Garden
City and a Cosy Club in Chelmsford. We remain very confident in the
strength of the pipeline. Our rent to revenue ratio in the year was
5.3% and continues to be significantly lower than the sector
overall. Given the consistent discipline we have displayed in terms
of property deals we believe we are extremely well-placed to take
advantage of the current environment.
Since the year end, we have opened Cosy Club Brindleyplace,
Birmingham, and Ponto Lounge in Hull which opens today. Both were
sites where much of the capex cost had been incurred before the
estate was closed due to Covid-19. We have also taken the decision
to close two sites. Banco Lounge in Bristol was one of our earliest
sites and a combination of its small size and the additional costs
of doing business meant that it no longer met our returns criteria.
Its lease expires in March 2021 and will not be renewed. We have
also closed Allegro Lounge which has not performed as we had hoped
since opening in 2018. Whilst we are always willing to give each
site time to mature, Northfield has proven to be the wrong location
for a Lounge, and we will ensure we learn from that. We are not
considering any other sites for closure.
People
The culture within the business continues to be at the heart of
our success, and this has never been as important as during the
last few months. During the year under review, the continued
evolution of our team recruitment, training, development, and
communication has contributed hugely to our performance. I am
enormously grateful to our 4,500 employees who over the year
continued to ensure our customers keep coming back.
Towards the year end we restructured our Regional Operations
Structure, reducing further the Site to Operations team ratio. This
was done to ensure our sites continue to be intensively managed
alongside providing continued capacity across the UK to roll-out
new sites. As our geographic footprint grows alongside the number
in the operations team, so the impact of new openings is diluted,
allowing for smoother openings and less distraction for our
teams.
At a senior management level, we welcomed Tom Trenchard into the
team as Property Director and have added additional resource in the
food, training and development, purchasing, and systems teams. We
continue to look forward to ensure we have the right structure in
place, commensurate with our continued growth.
Covid-19 and the Closure period
Our priorities during lockdown centred around supporting and
communicating with our team, minimising cash burn and ensuring our
balance sheet strength was sufficient to withstand the impact of
Covid-19, continuing to engage with our customers and communities
during the difficult time, and preparing to re-open. We also took
advantage of the unique opportunity to think about and evolve the
business to ensure we were best positioned when it came to
re-opening.
Throughout the Covid-19 period we have focused on looking after
our team of 4,500 employees. Through regular communication we have
kept them informed and we are appreciative of the Government
support via the Coronavirus Job Retention Scheme. Over 99% of our
team were furloughed during lockdown with around 30 people working
throughout. The Board is enormously appreciative, both of those who
worked throughout the period, and those who were on furlough but
participated in the numerous forms of engagement which allowed us
to keep the culture in the business alive. In addition, we ensured
we continued to engage with our customers and their communities and
witnessed many fantastic charitable acts from our site teams as
they sought to contribute to beat the virus.
To minimise cash burn, as soon as lockdown was imposed, we
immediately stopped all non-essential capex and contracts,
challenged every recurring cost line in the business and negotiated
with our landlords and suppliers. The Board is appreciative of our
supply chain who were highly supportive during this period. Our
conversations with landlords regarding the waiver or deferral of
rent during the closure period are ongoing, but our collaborative
approach, engaging with each of our landlords, has proved
worthwhile. During lockdown we secured an additional GBP15m of
banking facilities and carried out an GBP8m equity placing. The
Board recognised the importance of demonstrating we had sufficient
funding to survive through any worst case Covid-19 lockdown
scenarios, and, critically, to get the roll-out back on track once
we reopened. We recognised that post-lockdown the property market
would be more tenant-friendly and present a fantastic opportunity
to further strengthen our pipeline. As a result of the increased
facilities and completion of the placing, the Group had liquidity
of GBP30m in place on 23 April and the strength to withstand a very
prolonged lockdown.
The pause in day to day operations during lockdown allowed us to
review various aspects of the business and ensure when we reopened,
we were well-positioned in respect of operating both in a Covid-19
environment, and more generally. Key activities during this period
were:
-- Undertaking a maintenance audit. This ensured any critical
works that would require closure once reopened, or splash and dash
style improvements that were previously planned, were carried out
during lockdown. This, alongside a thorough deep clean in every
site, ensured when our sites reopened it was in the best condition
they had ever been.
-- Reconfiguring the sites to suit trading with distancing
guidelines in place . Our approach here was to ensure any steps we
took were consistent not only with Government guidelines but also
with our uniquely obsessive focus on atmosphere and look and feel.
Whilst our covers have reduced by between 10% and 15% because of
this, the addition of bespoke timber partitioning and the very
detailed approval process for the new layouts have ensured the
sites are comfortable and recognisable to our customers.
-- Challenging the menus and ingredients . Menus in both Lounge
and Cosy Club were reduced for re-opening which has provided us
with an opportunity to understand how our customers will react to
slightly less choice. Alongside this a forensic approach to menu
engineering and ingredient lists has provided us with the
opportunity to further gain margin and labour efficiency over
time.
-- Introducing an order at table app . This was something we
were always cautious about, but in Lounges in particular, where the
service model otherwise involves ordering at the bar, it became a
requirement. App sales now represent 42% of sales in Lounges.
-- Trialling takeaway at 27 Lounges . Opening these sites for
takeaway allowed us an early opportunity to get the business and
supply chain back up and running and to learn a great deal about
operating in a socially distanced environment.
-- Re-writing our processes and procedures to ensure the safety
of our teams and customers . Our objective here was to ensure we
could engage with our customers and continue to provide great
hospitality, whilst demonstrating we were operating in a safe
environment.
Reopening
We adopted a phased approach to re-opening, gradually opening
the full estate between the 4(th) July and 7(th) August. This
allowed us to learn from the initial openings, and feed in any
changes required to subsequent openings. It also allowed us to
ensure every employee received a full day's training on the new
processes in place, and to reassure them that they were working in
a safe environment. Our sites look fantastic, our teams and
customers feel safe and the steps we took during lockdown have
ensured a slick re-opening.
Current Trading and Outlook
The Group has traded significantly ahead of our expectations.
Since re-opening our LFL net sales growth in the period from 4 July
to 13 September has been +29.9%. Excluding the positive impacts of
EOTHO and the VAT reduction, our underlying LFL sales have been
-1.1%, and over the nine weeks ending 13 September 2020 have been
positive. This represents a significant outperformance of the
market, materially exceeding the sector outperformance we have
experienced over the past five years.
Whilst the economic outlook remains uncertain, we take
confidence from our performance to date and remain optimistic with
regard to future trading. Our value for money, flexible offer, and
its broad appeal, alongside the locations in which we operate, mean
we continue to be well-placed. As a result of this confidence we
have decided to cautiously re-start the roll-out of new site
openings. Over the remainder of the current financial year we plan
to open six sites (of which Cosy Club Brindleyplace and Ponto
Lounge Hull are already open), from those sites where we are
already committed. We will also start re-building the pipeline such
that we are in a position to accelerate the roll-out towards our
pre-lockdown target of opening 25 sites a year.
Nick Collins
Chief Executive Officer
16 September 2020
Financial Review
Financial Performance
The financial results for FY20 reflect another year of
significant growth, albeit severely impacted in the latter weeks by
the impact of Covid-19. Revenue growth of 8.8% combines the impact
of 21 new site openings and a strong underlying LFL sales
performance (+4.5% in the 44 weeks to 23 February 2020). Adjusted
EBITDA grew by 0.8% to GBP28.8m (2019: GBP28.5m) under IFRS 16,
whilst under IAS 17 it fell by 8.6% reflecting the impact of IAS 17
rent costs during lockdown.
The impact of the Covid-19 lockdown, which commenced on 20 March
2020, and the introduction of IFRS 16 present two challenges to
interpreting our financial performance over the year under review,
the highlights of which are:
IFRS 16 IAS 17
Year Year Change Year Year Change
ended ended ended ended
19 April 21 April 19 April 21 April
2020 2019 2020 2019
GBP000 GBP000 GBP000 GBP000
Revenue 166,502 152,999 +8.8% 166,502 152,999 +8.8%
Adjusted EBITDA 28,767 28,541 +0.8% 18,813 20,582 -8.6%
-1.4 -2.2
Adjusted EBITDA margin (%) 17.3% 18.7% ppts 11.3% 13.5% ppts
Loss before tax (14,781) (6,700) (13,020) (4,989)
Adjusted profit / (loss) before
tax 2,002 (6,238) 3,763 (4,527)
Adjusted diluted earnings
/ (losses) per share (p) 2.4 (35.4) 3.2 (28.0)
Net debt 139,895 254,750 34,956 165,612
Throughout the Annual Report we use a range of financial and
non-financial measures to assess our performance. A number of the
financial measures, for example Adjusted EBITDA, Adjusted profit /
(loss) before tax and Adjusted diluted earnings / (losses) per
share are not defined under IFRS and accordingly they are termed
Alternative Performance Measures ("APMs"). The Group believes that
these APMs provide stakeholders with additional useful information
on the underlying trends, performance and position of the Group and
are consistent with how business performance is measured
internally. Adjusted EBITDA is also the measure used by the Group's
banks for the purposes of assessing covenant compliance.
Reconciliations of statutory numbers to adjusted numbers
reported above are included in note 11.
IFRS 16
IFRS 16 Accounting for Leases has been adopted for the first
time FY20 using the fully retrospective method. Accordingly, the
FY19 comparatives have been re-stated. The impact of IFRS 16 is
essentially twofold:
-- firstly, to create a lease liability for rental costs and
corresponding right of use asset in the balance sheet, and
-- secondly, to remove the rental charge from the income
statement and replace it with a depreciation charge in respect of
the right of use asset and a finance charge in respect of the
unwinding of the lease liability.
Accordingly, and relative to the previous lease accounting
standard IAS 17, IFRS 16 sees the Group report:
-- a higher level of adjusted EBITDA. EBITDA no longer includes the IAS 17 rent cost;
-- a higher level of adjusted operating profit. The depreciation
on the right of use asset is lower than the IAS 17 rent charge;
-- a higher level of loss before tax. The combined IFRS 16
charges for depreciation of the right of use asset and interest on
the lease liability exceed the IAS 17 rent charge. This reflects
the relative immaturity of the Group's lease portfolio as, whilst
over the life of a lease these costs will equal out, in the early
years the combination of a straight line depreciation charge and a
higher interest charge leads to a total IFRS 16 charge exceeding
the rent payable charge under IAS 17; and
-- a higher level of net debt. Reflecting the inclusion of the
capitalised lease liabilities within net debt.
Whilst the shape of the income statement may have changed with
the introduction of IFRS 16 the decision to adopt on a fully
retrospective basis does mean that the reported numbers for FY20
and FY19 are directly comparable. Further details on the adoption
of IFRS 16 are provided in note 3.
Covid-19 Impact
The Group reports internally on the basis of 13 four week
periods and in order to explain the impact of Covid-19 on the
Group's FY20 financial performance the table below presents
adjusted EBITDA (under IFRS 16) for the first 11 periods (the 44
weeks to 23 February 2020) and the final two periods (the 8 weeks
to 19 April 2020).
44 Weeks ended 8 Weeks ended 52 Weeks ended
23 February 19 April 2020 19 April 2020
2020
--------------- -------------- ---------------
GBP000 GBP000 GBP000
--------------- -------------- ---------------
Turnover 154,876 11,626 166,502
--------------- -------------- ---------------
LFL Sales 4.5% (61.4%) (6.4%)
--------------- -------------- ---------------
Cost of sales (89,404) (7,503) (96,907)
--------------- -------------- ---------------
Gross profit 65,472 4,123 69,595
--------------- -------------- ---------------
Gross profit % 42.3% 35.5% 41.8%
--------------- -------------- ---------------
Administrative expenses (36,334) (4,494) (40,828)
--------------- -------------- ---------------
Adjusted EBITDA 29,138 (371) 28,767
--------------- -------------- ---------------
Adjusted EBITDA
margin 18.8% (3.2%) 17.3%
--------------- -------------- ---------------
The impact of the lockdown on 20 March 2020 is stark. Whilst the
Group traded relatively normally in the three weeks ending 15 March
2020 (LFL sales were +2.0%) sales tailed off dramatically as we
moved through the days immediately prior to 20 March 2020. LFL
sales that were running at +4.5% for the first 44 weeks of the year
declined to -6.4% for the full year on the back of a severely
impacted week 48 and complete closure for weeks 49 to 52.
The impact on margins was equally pronounced, with the gross
profit margin declining from 42.3% after 44 weeks to 41.8% for the
full year and the adjusted EBITDA margin declining from 18.8% after
44 weeks to 17.3% for the full year. The Group moved very quickly
to adapt to a world of zero sales, with site teams being furloughed
from 22 March 2020 and head office staff from 31 March 2020, and
all non-essential spend halted. However, the final 5 weeks of the
year continued to be impacted by the costs of shutting down the
estate, fixed property costs and incremental staff costs, notably
holiday pay.
Over the first 44 weeks of the year the Group had performed very
well. The table below sets out the financial performance on an IFRS
16 adjusted EBITDA basis for the 44 weeks to 23 February 2020
versus the same 44 week period in the prior year.
Like for like sales growth of 4.5% supplemented the impact of
new site openings to deliver total revenue growth of 21.9%.
Continued focus on managing the cost base was reflected in an
improvement in the adjusted EBITDA margin from 18.7% to 18.8%, with
adjusted EBITDA increasing by 22.7% over the 44 week period.
44 Weeks ended 44 Weeks ended Year on Year
23 February 24 February Change
2020 2019
--------------- --------------- -------------
GBP000 GBP000
--------------- --------------- -------------
Turnover 154,876 127,101 +21.9%
--------------- --------------- -------------
Cost of sales (89,404) (74,071)
--------------- --------------- -------------
Gross profit 65,472 53,030
--------------- --------------- -------------
Gross profit % 42.3% 41.7% +0.6%
--------------- --------------- -------------
Administrative expenses (36,334) (29,280)
--------------- --------------- -------------
Adjusted EBITDA 29,138 23,750 +22.7%
--------------- --------------- -------------
Adjusted EBITDA
margin 18.8% 18.7% +0.1%
--------------- --------------- -------------
The major drivers behind the improvement in the IFRS 16 adjusted
EBITDA margin were as follows:
-- Improvement in gross margin of 0.6%, and
-- Operational leverage across central costs of 0.4%, offset by:
-- Increased utility and pension costs of 0.3%
-- Increased business rates costs of 0.2%, and
-- Incremental costs associated with being a publicly traded company of 0.3%
The improvement in gross margin reflected both the success of
the re-tendering of food and drink suppliers that was conducted
through the first half of 2019, with the implementation completed
in November 2019, and the continued focus on menu and range
development and control of site labour costs.
Exceptional Costs
The statutory operating loss of GBP6.7m is after charging
exceptional costs totalling GBP15.3m. Exceptional costs
include:
-- GBP0.9m relating to the write off of stock on the forced
closure of the estate due to Covid-19;
-- GBP1.5m in respect of costs incurred in the Group's IPO.
Further IPO related costs of GBP3.7m have been charged directly to
reserves as they relate to the raising of equity share capital;
-- GBP2.9m of IPO related share based payment awards; and
-- GBP9.8m relating to the impairment of property, plant, and equipment (see below).
The Covid-19 pandemic and associated lockdown was a clear
indicator of potential impairment and accordingly a detailed
impairment review of each individual site was undertaken. The
result of this review was an impairment charge of GBP9.8m (2019:
GBPnil), split GBP7.2m against the right of use asset and GBP2.6m
against leasehold improvements and fixtures.
The impairment methodology included the calculation of a value
in use for all sites. This valuation was based upon three year site
cash flow forecasts covering FY21 through FY23 which incorporated
the impact of lockdown closure and assumptions regarding post
reopening recovery, and a full allocation of central costs and
maintenance capex spend.
Finance Costs and Net Debt
Finance costs of GBP8.1m (2019: GBP19.5m) include IFRS 16 lease
liability finance costs of GBP5.5m (2019: GBP4.7m) and a non-cash
exceptional charge of GBP1.4m in respect of the write off of
unamortised loan arrangement fees relating to the Group's pre IPO
banking facilities. Bank interest payable in the year was GBP1.2m
(2019: GBP4.3m).
The significant reduction in year on year finance costs is a
function of the Group's IPO and the resulting change in capital
structure. Excluding IFRS 16 lease liabilities net debt has reduced
from GBP165.6m at 21 April 2019 to GBP35.0m at 19 April 2020.
Cash Flow
Net cash generated from operating activities declined by 13.8%
to GBP24.4m (2019: GBP28.3m). The reduction in cash generation was
wholly a function of the introduction of lockdown and the initial
impact of the resulting working capital unwind. The most
significant element of the working capital unwind pre year end
related to payroll liabilities, with all our employees being paid
at the end of March and no subsequent rebuild of the net liability
as the site teams and the majority of head office employees
transferred to the Coronavirus Job Retention Scheme.
Cash outflows in the year in respect of capital expenditure
totalled GBP23.1m (2019: GBP21.1m). Prior to the lockdown the Group
was on course to be self-funding in terms of capital expenditure,
with cash generated from operating activities exceeding the cash
out flow on capital expenditure. Capital expenditure in the year
included a spend of GBP17.4m (2019: GBP18.5m) in respect of new
site openings. FY20 new site spend of GBP17.4m included GBP2.1m in
respect of five sites where work was halted due to lockdown.
Key Performance Indicators ("KPI's")
The KPI's, both financial and non-financial, that the Board
reviews on a regular basis in order to measure the progress of the
Group are as follows:
FY20 FY20 to FY19
23 February
2020
--------- ------------ ---------
New site openings (net) 21 19 25
--------- ------------ ---------
Capital expenditure (IAS GBP22.8m GBP22.4m GBP21.8m
17)
--------- ------------ ---------
Like for like sales growth (6.4%) 4.5% 6.9%
--------- ------------ ---------
Total sales growth 8.8% 21.9% 26.4%
--------- ------------ ---------
Adjusted EBITDA margin
(IFRS 16) 17.3% 18.8% 18.7%
--------- ------------ ---------
Going Concern
In concluding that it is appropriate to prepare the FY20
financial statements on the going concern basis attention has been
paid to the impact of Covid-19 on the Group, both experienced to
date and potentially foreseeable in the future.
Covid-19 actions taken to mitigate the impact of lockdown
It is important to note that the strong financial performance of
the business prior to lockdown on 20 March 2020 meant it was as
well placed as possible to respond to a significant period of
lockdown. The actual period of lockdown ranged between 15 and 19
weeks across our sites.
As the likelihood of lockdown increased during early March 2020
an immediate halt was put on the new site opening programme, all
discretionary expenditure was stopped, and discussions commenced
with our lenders Santander and Bank of Ireland to agree additional
borrowing facilities. Additional immediate actions to preserve
liquidity within the Group included:
-- Transferring all site employees and the majority of head
office employees (in total 99% of employees) into the Coronavirus
Job Retention Scheme;
-- Reaching agreement with our suppliers to extend credit terms
and restrict the level of working capital unwind. Our supportive
supply partners were typically paid an amount on account during
lockdown, with the deferred balance settled in full post
re-opening;
-- Seeking to agree rent waivers and deferrals with our
landlords, and taking advantage of the moratorium on enforcement by
landlords;
-- Taking advantage of HMRC's VAT deferral scheme and agreeing
to defer payment of PAYE/NI liabilities due for payment in March
and April; and
-- Agreeing salary reductions with those employees who had not been furloughed.
Significant work was undertaken throughout March and April 2020
to model a range of potential scenarios. The key variables within
these scenarios included:
-- The length of lock-down. The management case scenario
included a lockdown period of 16 weeks, with the estate re-opening
13 July 2020;
-- The level of sales decline on the re-opening of the estate
and the period over which sales recovered. The management case
assumed that sites would re-open with LFL sales running at negative
50% and would finish the FY21 financial year at negative 10%;
-- The labour cost of operating at depressed sales levels and
the required additional investment in labour to support post
re-opening Covid-19 protocols; and
-- Working capital impacts of potentially amended credit terms post re-opening.
The management base case underpinned the decision to agree an
additional GBP15m revolving credit facility ("RCF") with our
lenders and to proceed with an equity placing of 9.25m new shares
raising net proceeds of GBP8.1m. At 19 April 2020, the Group had
cash of GBP4.1m and net debt of GBP35.4m, having drawn down GBP7m
under the Group's existing GBP10m RCF. On completion of the equity
placing on 23 April, and with the additional RCF in place, the
Group had total liquidity of GBP30.0m. Based on an assumed further
working capital unwind of GBP9m and with an average weekly cash
outflow of GBP0.48m (assuming all rents paid as they fell due) this
provided the Group with approximately 44 weeks of liquidity in the
event of a prolonged total lockdown.
Performance post lockdown
Commencing with the full re-opening of 24 Lounges on 4 July 2020
the Group adopted a phased re-opening programme with 165 sites
opened and fully trading by 7 August. Trading in the 10 weeks post
re-opening has been significantly ahead of that modelled in the
management case referred to above, with like for like sales growth
(including the impact of the VAT reduction on food and
non-alcoholic drinks) of 29.9%. Underlying trading has been
stronger than that modelled in the management case scenario and
there has been significant additional benefit coming from:
-- The support measures announced by the Chancellor on 8 July
2020, including the reduction in the VAT rate on food and
non-alcoholic drinks from 20% to 5% for the period 15 July 2020 to
12 January 2021, the Eat Out to Help Out scheme in August 2020;
and
-- The support of the Group's supply partners in maintaining their pre Covid-19 credit terms.
The strength of initial trading post lock down, allied to the
various initiatives detailed above and the additional capital
raised in the equity placing have significantly offset the negative
impact of the lockdown period. As at 6 September net debt, adjusted
to reflect deferred liabilities to landlords and HMRC as if they
had been paid, was GBP24.5m. This compares favourably to net debt
of GBP26.5m on the corresponding date last year and to net debt of
GBP28.8m on 22 March 2020, immediately post the start of
lockdown.
Cash flow and covenant models
The management case scenario has been updated to reflect the
impact of the events noted above. Under this scenario borrowing
under the Group's total RCF facility of GBP25m would not exceed
GBP5.0m and the Group would be in compliance with its bank
covenants. The Group is subject to leverage and interest cover
covenant tests. The amendment to the Group's banking facilities
agreed in April 2020 included the waiver of the covenant tests
scheduled for 12 July 2020 and 4 October 2020, and amendments to
the tests running through to 3 October 2021. The Group was in
compliance with its covenants throughout the FY20 financial
year.
Additional downside scenarios have been modelled against the
management case. These downsides have included:
-- The closure of 20 sites from early September 2020 through the
remainder of FY21 to reflect the potential impact of a series of
regional lockdowns;
-- The closure of an additional 20 sites through a 12 week
period covering November 2020 to January 2021 to reflect the
potential for more rigorous localized lockdowns over the Christmas
trading period;
-- Increases in the level of LFL sales decline for the remainder
of FY21 from the negative 10% in the management case to a range
from negative 10% to negative 25%; and
-- Continued LFL sales decline throughout FY22 of between 10% and 25%.
The impact of reflecting all these downside scenarios is to
reduce expectations of Adjusted EBITDA by approximately 64% for
FY21 and 61% for FY22 relative to Board expectations pre Covid-19.
Under this downside scenario the Group is forecast to remain within
its borrowing facilities and to be in compliance with its covenant
obligations, and accordingly the Directors have concluded that it
is appropriate to prepare the FY20 financial statements on the
going concern basis.
Gregor Grant
Chief Financial Officer
16 September 2020
Consolidated Statement of Comprehensive Income
For the 52 Weeks Ended 19 April 2020
Year ended Year ended
19 April 21 April
2020 2019
GBP000 GBP000
Note Restated*
Revenue 166,502 152,999
Cost of sales (98,523) (89,485)
----------- -----------
Gross profit 67,979 63,514
Gross profit before exceptional items 68,882 63,514
Exceptional items included in cost
of sales 6 (903) -
---------------------------------------------- ----- ----------- -----------
Administrative expenses (74,695) (50,811)
----------- -----------
Operating (loss) / profit 4 (6,716) 12,703
Operating profit before exceptional
items 8,620 13,165
Exceptional items included in cost
of sales 6 (903) -
Exceptional items included in administrative
expenses 6 (14,433) (462)
---------------------------------------------- ----- ----------- -----------
Finance income 50 54
Finance costs 5 (8,115) (19,457)
Finance costs before exceptional items (6,668) (19,457)
Exceptional finance cost 5 (1,447) -
---------------------------------------------- ----- ----------- -----------
Loss before taxation (14,781) (6,700)
Tax credit / (charge) on loss 7 1,960 (460)
Loss for the year (12,821) (7,160)
=========== ===========
Other comprehensive expense:
Items that may be reclassified to
profit or loss
Cash flow hedge - change in value
of hedging instrument (332) (333)
Other comprehensive expense for the
year (332) (333)
Total comprehensive expense for the
year (13,153 (7,493)
=========== ===========
Earnings per share Year ended Year ended
19 April 21 April
2020 2019
Pence Pence
Note
Basic earnings / (losses) per share 8 (14.0) (37.5)
Diluted earnings / (losses) per share 8 (14.0) (37.5)
*See note 3 for details regarding the restatement as a result of
the adoption of IFRS 16.
Consolidated Statement of Financial Position
As at 19 April 2020
Note At 19 At 21 At 22
April April April
2020 2019 2018
Restated* Restated*
GBP000 GBP000 GBP000
Assets
Non-current
Intangible assets 113,227 113,227 113,227
Property, plant and equipment 9 166,447 149,261 121,256
Deferred tax assets 236 - -
Finance lease receivable 752 831 907
----------
Total non-current assets 280,662 263,319 235,390
Current
Inventories 815 1,500 1,065
Trade and other receivables 6,850 4,883 4,139
Derivative financial instruments - - 323
Cash and cash equivalents 4,083 6,500 7,669
---------- ---------- ----------
Total current assets 11,748 12,883 13,196
Total assets 292,410 276,202 248,586
========== ========== ==========
Liabilities
Current liabilities
Trade and other payables (34,118) (32,440) (27,715)
Lease liabilities (6,160) (4,946) (3,759)
Derivative financial instruments (332) (10) -
---------- ---------- ----------
Total current liabilities (40,610) (37,396) (31,474)
Non-current liabilities
Borrowings 10 (39,039) (172,112) (157,368)
Lease liabilities (98,779) (84,192) (69,405)
Deferred tax liabilities - (1,594) (2,001)
---------- ---------- ----------
Total liabilities (178,428) (295,294) (260,248)
========== ========== ==========
Net liabilities 113,982 (19,092) (11,662)
========== ==========
Called up share capital 1,025 53 53
Share premium - 4,184 4,172
Hedge reserve (332) (10) 323
Other reserve 14,278 51 -
Retained earnings / (accumulated
losses) 99,011 (23,370) (16,210)
---------- ---------- ----------
Total equity 113,982 (19,092) (11,662)
========== ========== ==========
*See note 3 for details regarding the restatement as a result of
the adoption of IFRS 16.
Consolidated Statement of Changes in Equity
For the 52 Weeks Ended 19 April 2020
Retained
Called profits
up share Share Hedge Other / (accumulated Total
capital premium reserve reserve losses) equity
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
At 22 April 2018 53 4,172 323 - (13,945) (9,397)
IFRS 16 Transition - - - - (2,265) (2,265)
At 22 April 2018 restated 53 4,172 323 - (16,210) (11,662)
Share transactions during
the 52 week year - 12 - 51 - 63
Total transactions with
owners - 12 - 51 - 63
Loss for the year - - - - (7,160) (7,160)
Other comprehensive expense - - (333) - - (333)
Total comprehensive expense
for the 52 week year - - (333) - (7,160) (7,493)
At 21 April 2019 53 4,184 (10) 51 (23,370) (19,092)
========== ========= ========= ========= ================ ==========
Redeemable preference shares
issued 100 - - - - 100
Share for share exchange
- ordinary shares 8,408 (4,184) - (4,224) - -
Preference debt for equity
swap 66,193 - - 18,451 - 84,644
Ordinary shares issued 3 - - - - 3
Ordinary shares issued on
IPO 308 61,288 - - (3,655) 57,941
Capital reduction (74,040) (61,288) - - 135,328 -
Share based payment charge - - - - 3,539 3,539
Total transactions with
owners 972 (4,184) - 14,227 135,212 146,227
Loss for the year - - - - (12,821) (12,821)
Other comprehensive expense - - (322) - (10) (332)
Total comprehensive expense
for the 52 week period - - (322) - (12,831) (13,153))
At 21 April 2019 1,025 - (332) 14,278 99,011 113,982
========== ========= ========= ========= ================ ==========
Consolidated Statement of Cash Flows
For the 52 Weeks Ended 19 April 2020
Year ended Year ended
19 April 21 April
2020 2019
Restated*
GBP000 GBP000
19 April 21 April
2020 2019
Cash flows from operating activities
Loss before tax (14,781) (6,700)
Adjustments for:
Depreciation of property, plant and equipment 9,630 7,852
Depreciation of right of use assets 7,177 5,694
Impairment of property, plant and equipment 9,829 -
Share based payment transactions 4,026 (87)
Profit on disposal of tangible assets (5) (29)
Finance income (50) (54)
Finance costs 8,115 19,457
Changes in inventories 685 (435)
Changes in trade and other receivables (732) (703)
Changes in trade and other payables 1,793 4,310
----------- -----------
Cash generated from operations 25,687 29,305
Tax paid (1,290) (1,018)
----------- -----------
Net cash generated from operating
activities 24,397 28,287
=========== ===========
Cash flows from investing activities
Purchase of property, plant and equipment (23,058) (21,162)
Disposal of property, plant and equipment 10 -
Net cash used in investing activities (23,048) (21,162)
=========== ===========
Cash flows from financing activities
Issue of ordinary shares 57,941 12
Capital contribution - 51
Bank loans advanced 38,924 6,000
Bank loans repaid (71,000) (2,000)
Repayment of other loans (17,950) -
Interest paid (1,099) (4,066)
Finance lease liabilities principal
element paid (5,228) (3,744)
Finance lease interest paid (5,478) (4,668)
Finance lease receivables 124 121
Net cash used in financing activities (3,766) (8,294)
=========== ===========
Net decrease in cash and cash equivalents (2,417) (1,169)
Cash and cash equivalents at beginning
of the period 6,500 7,669
Cash and cash equivalents at end of
the period 4,083 6,500
=========== ===========
*See note 3 for details regarding the restatement as a result of
the adoption of IFRS 16.
NOTES TO THE PRELIMINARY FINANCIAL INFORMATION
1. General information
Loungers plc ("the company") and its subsidiaries ("the Group")
operate café bars and café restaurants through two complementary
brands, Lounge and Cosy Club.
The Company is a public company limited by shares whose shares
are publicly traded on the AIM Market ("AIM") of the London Stock
Exchange and is incorporated in the United Kingdom and registered
in England and Wales.
The registered address of the Company is 26 Baldwin Street,
Bristol, United Kingdom, BS1 1SE.
2. Basis of preparation
The consolidated financial statements of the Loungers plc Group,
from which the financial information in this announcement is
derived, have been prepared in accordance with International
Financial Reporting Standards (IFRS) and IFRS Interpretations
Committee (IFRS IC) interpretations as adopted by the European
Union applicable to companies reporting under IFRS.
The financial statements have been prepared under the historical
cost convention, as modified by the revaluation of financial
liabilities (including derivatives) at fair value through profit
and loss. The financial statements are presented in thousands of
pounds sterling ('GBP000') except where otherwise indicated.
The Company was incorporated on 28 March 2019 as the vehicle for
the purposes of achieving admission to trading on the AIM market of
the London Stock Exchange ("Admission") and the Company had no
significant transactions prior to Admission on 29 April 2019. The
Company acquired the entire share capital of Lion/Jenga Topco
Limited ("Topco") on 24 April 2019 in a share for share exchange.
The introduction of the Company into the Group has been accounted
for as a capital reorganisation. In doing so the comparatives for
the 52 weeks ended 21 April 2019 have been presented as if the
Group had always existed in its current form.
The accounting policies adopted in the preparation of the
Financial Statements are consistent with those applied in the
preparation of the Topco consolidated financial statements for the
year ended 21 April 2019, except for the adoption of IFRS 16
effective as of 1 January 2019. The Group has not early adopted any
other standard, interpretation or amendment that has been issued
but is not yet effective.
The auditors' reports on the accounts for the 52 weeks ended 19
April 2020 for Loungers plc and for the 21 April 2019 of Topco were
unqualified, did not draw attention to any matters by way of
emphasis, and did not contain a statement under section 498(2) or
498(3) of the Companies Act 2006 (or Jersey Law equivalent).
The financial statements for Loungers plc for the year to 19
April 2020 will be delivered to the Registrar of Companies shortly.
Topco is registered in Jersey and accordingly statutory accounts
have not been delivered to the Registrar of Companies.
The financial information contained within this preliminary
announcement for the periods ended 19 April 2020 and 21 April 2019
does not comprise the statutory financial statements of Loungers
plc.
In concluding that it is appropriate to prepare the FY20
financial statements on the going concern basis the Directors have
considered the Group's cash flows, liquidity and business
activities. Particular attention has been paid to the impact of
Covid-19 on the business, both experienced to date and potentially
foreseeable in the future.
As at 19 April the Group had cash balances of GBP4.1m and
undrawn facilities of GBP3.0m. On 22 April 2019 the Group raised
gross proceeds of GBP8.3m through the issue of 9,250,000 ordinary
shares and agreed an additional GBP15m revolving credit facility
with its bankers, providing total liquidity of GBP30.2m.
Based on the Group's forecasts, the Directors have adopted the
going concern basis in preparing the Financial Statements. The
Directors have made this assessment after consideration of the
Group's cash flows and related assumptions and in accordance with
the Guidance on Risk Management, Internal Control and Related
Financial and Business Reporting 2014 published by the UK Financial
Reporting Council.
In making this assessment the Directors have made a current
consideration of the potential impact of the Covid-19 pandemic on
the cash flows and liquidity of the Group over the next 12 month
period. This assessment has considered:
-- Measures put in place during lockdown to preserve and to increase liquidity
-- The impact of Government measure to support industry, and in
particular the hospitality industry. These measures include the
Coronavirus Job Retention Scheme, the business rates holiday, the
temporary VAT reduction to 5% on food and non-alcoholic drinks and
the EOTHO Scheme
-- Initial trading during the period post the resumption of trading on 4 July 2020
The Group's forecasts assume a level of like for like sales
decline, resulting from the impact of Covid-19 on consumer
behaviour, that exceeds that experienced in the period post
re-opening (adjusted to exclude the positive impact of EOTHO).
The Directors have also considered a more severe downside set of
assumptions. These include:
-- The closure of 20 sites from early September through the
remainder of FY21 to reflect the potential impact of a series of
regional lockdowns
-- The closure of an additional 20 sites through a 12 week
period covering November to January to reflect the potential for
more rigorous localized lockdowns over the Christmas trading
period
-- Further increases in the level of LFL sales decline for the remainder of FY21
-- Continued LFL sales decline throughout FY22
The impact of these downside scenarios is to reduce expectations
of Adjusted EBITDA by approximately 64% for FY21 and 61% for FY22
relative to Board expectations pre Covid-19. Under this downside
scenario the Group is forecast to remain within its borrowing
facilities and to be in compliance with its covenant obligations,
and accordingly the Directors have concluded that it is appropriate
to prepare the FY20 financial statements on the going concern
basis.
3. New standards, amendments and interpretations adopted
The Group has applied the same accounting policies and methods
of computation in its Financial Statements as in the Topco 2019
annual financial statements, with the following exception of the
adoption of IFRS 16 Leases.
There are no other new standards, amendments or interpretations
not yet adopted by the Group that are expected to have a material
impact on these consolidated financial statements.
IFRS 16 "Leases"
IFRS 16 supersedes IAS 17 and sets out the principles for the
recognition, measurement, presentation and disclosure of leases and
requires lessees to account for most leases under a single
on-balance sheet model. The Group has adopted IFRS 16 using the
fully retrospective method with the date of initial application
being 23 April 2018.
In applying IFRS 16 for the first time, the Group has used the
following practical expedients permitted by the standard:
-- the use of a single discount rate to a portfolio of leases
with reasonably similar characteristics
-- relying on previous assessment of whether a lease is onerous
-- the exclusion of initial direct costs for the measurement of
the right-of-use asset at the date of initial application, and
-- the use of hindsight in determining the lease term where the
contract contains options to extend or terminate the lease.
In calculating the present value of lease payments, the Group
uses its incremental borrowing rate at the lease commencement date
if the interest rate implicit in the lease is not readily
determinable.
The Group applies the short-term lease recognition exemption to
its short-term leases of equipment (i.e. those leases that have a
lease term of 12 months or less from the commencement date and do
not contain a purchase option). It also applies the lease of
low-value assets recognition exemption to leases that are
considered of low value. Lease payments on short-term leases and
leases of low-value assets are recognised as an expense on a
straight-line basis over the lease term.
In accordance with the fully retrospective method of adoption,
the Group applied IFRS 16 at the date of initial application as if
it had already been effective at the commencement date of existing
lease contracts. Accordingly, the comparative information in these
consolidated financial statements has been restated, as summarised
below.
Adjustments recognised on the adoption of IFRS 16
The impact of adopting IFRS 16 on the Group's consolidated
statement of comprehensive income, consolidated statement of
financial position and consolidated statement of cash flows is
presented in the following tables.
Reported IFRS 16 Restated
Year ended Transition Year ended
21 April 21 April
2019 2019
GBP000 GBP000
Revenue 152,999 - 152,999
Cost of sales (89,485) - (89,485)
Gross profit 63,514 - 63,514
Administrative expenses (53,717) 2,906 (50,811)
Operating profit 9,797 2,906 12,703
Operating profit before exceptional
items 10,259 2,906 13,165
Exceptional items included in administrative
expenses (462) - (462)
---------------------------------------------- ----------- ----------- -----------
Finance income - 54 54
Finance costs (14,786) (4,671) (19,457)
Loss before taxation (4,989) (1,711) (6,700)
Tax credit / (charge) on loss (750) 290 (460)
Loss for the year (5,739) (1,421) (7,160)
=========== =========== ===========
Other comprehensive expense:
Cash flow hedge - change in value
of hedging instrument (333) - (333)
Other comprehensive expense for the
year (333) - (333)
Total comprehensive expense for the
year (6,072) (1,421) (7,493)
=========== =========== ===========
Adjustments recognised on the adoption of IFRS 16
(continued)
The adjustments to the consolidated statement of financial
position are as follows:
Reported IFRS 16 Restated Reported IFRS 16 Restated
at 22 Transition at 22 at 19 Transition at 21
April April April April
2018 2018 2019 2019
GBP000 GBP000 GBP000 GBP000
Assets
Non-current
Intangible assets 113,227 - 113,227 113,227 - 113,227
Property, plant and
equipment 59,006 62,250 121,256 74,073 75,188 149,261
---------- ----------- ---------- ---------- ----------- ----------
Total non-current
assets 172,233 62,250 234,483 187,300 75,188 262,488
Current
Inventories 1,065 - 1,065 1,500 - 1,500
Trade and other receivables 5,182 (136) 5,046 6,289 (575) 5,714
Derivative financial
instruments 323 - 323 - - -
Cash and cash equivalents 7,669 - 7,669 6,500 - 6,500
---------- ----------- ---------- ---------- ----------- ----------
Total current assets 14,239 (136) 14,103 14,289 (575) 13,714
Total assets 186,472 62,114 248,586 201,589 74,613 276,202
========== =========== ========== ========== =========== ==========
Liabilities
Current liabilities
Trade and other payables (27,723) 8 (27,715) (33,095) 655 (32,440)
Lease liabilities - (3,759) (3,759) - (4,946) (4,946)
Derivative financial
instruments - - - (10) - (10)
---------- ----------- ----------
Total current liabilities (27,723) (3,751) (31,474) (33,105) (4,291) (37,396)
Non-current liabilities
Borrowings (157,368) - (157,368) (172,112) - (172,112)
Lease liabilities - (69,405) (69,405) - (84,192) (84,192)
Accruals and deferred
income (8,183) 8,183 - (9,312) 9,312 -
Deferred tax liabilities (2,465) 464 (2,001) (2,348) 754 (1,594)
Provisions (130) 130 - (118) 118 -
Total liabilities (195,869) (64,379) (260,248) (216,995) (78,299) (295,294)
========== =========== ========== ========== =========== ==========
Net liabilities (9,397) (2,265) (11,662) (15,406) (3,686) (19,092)
========== =========== ========== ========== =========== ==========
Called up share capital 53 - 53 53 - 53
Share premium 4,172 - 4,172 4,184 - 4,184
Hedge reserve 323 - 323 (10) - (10)
Other reserve - - - 51 - 51
Accumulated profits
/ (losses) (13,945) (2,265) (16,210) (19,684) (3,686) (23,370)
---------- ----------- ---------- ---------- ----------- ----------
Total equity (9,397) (2,265) (11,662) (15,406) (3,686) (19,092)
========== =========== ========== ========== =========== ==========
Adjustments recognised on the adoption of IFRS 16
(continued)
The adjustments to the consolidated statement of cash flows are
as follows:
Reported IFRS 16 Restated
Year ended Transition Year ended
21 April 21 April
2019 2019
GBP000 GBP000
Cash Flows from operating activities
Loss before Tax (4,989) (1,711) (6,700)
Adjustments for:
Depreciation of property, plant and
equipment 8,147 (295) 7,852
Depreciation of right of use assets - 5,694 5,694
Share based payment transactions (87) - (87)
Profit on disposal of tangible assets 12 (41) (29)
Finance Income - (54) (54)
Finance Costs 14,786 4,671 19,457
Changes in inventories (435) - (435)
Changes in trade and other receivables (1,074) 371 (703)
Changes in trade and other payables 6,089 (1,779) 4,310
Changes in provisions (12) 12 -
Cash generated from operations 22,437 6,868 29,305
Tax paid (1,018) - (1,018)
Net cash generated from operating
activities 21,419 6,868 28,287
Cash flows from investing activities
Purchase of property, plant and equipment (22,585) 1,423 (21,162)
Disposal of property, plant and equipment - -
Net cash used in investing activities (22,585) 1,423 (21,162)
=========== =========== ===========
Cash flows from financing activities
Issue of ordinary shares 12 - 12
Capital contribution 51 - 51
Bank loans advanced 6,000 - 6,000
Bank loans repaid (2,000) - (2,000)
Interest paid (4,066) - (4,066)
Finance lease liabilities paid - (3,744) (3,744)
Finance lease interest paid - (4,668) (4,668)
Finance lease receivables - 121 121
Net cash used in financing activities (3) (8,291) (8,294)
=========== =========== ===========
Net decrease in cash and cash equivalents (1,169) - (1,169)
Cash and cash equivalents at beginning
of the year 7,669 - 7,669
Cash and cash equivalents at end of
the year 6,500 - 6,500
=========== =========== ===========
4. Operating Profit
Operating profit is after charging / (crediting):
Year ended Year ended
19 April 21 April
2020 2019
Restated
GBP000 GBP000
Depreciation of tangible fixed assets 9,630 7,852
Depreciation of right of use assets 7,177 5,694
Impairment of property, plant and equipment 9,829 -
Inventories- amounts charged as an expense 40,876 38,968
Auditors' remuneration
for statutory audit services 94 80
for other assurance services - 75
for tax compliance services 48 24
for tax advisory services 351 28
Staff costs (excluding share based payments) 65,143 57,377
Share based payments 1,125 (87)
Pre- opening costs 2,220 1,904
Exceptional costs 15,336 462
=========== ===========
5. Finance Costs
Year ended Year ended
19 April 21 April
2020 2019
Restated
GBP000 GBP000
Bank interest payable 1,155 4,327
Finance cost on lease liabilities 5,478 4,671
Other loan interest payable 18 2,058
Preference share interest 17 8,401
Exceptional write off of loan arrangement 1,447 -
fees
----------- -----------
8,115 19,457
=========== ===========
6. Exceptional Items
Year ended Year ended
21 April 22 April
2019 2018
GBP000 GBP000
Included in cost of sales
Covid-19 related 903 -
Included in administrative expenses
Change of ownership 1,528 462
IPO Related share-based awards 2,901 -
Impairment of property, plant and equipment 9,829 -
Head office relocation 175 -
15,336 462
=========== ===========
The Covid-19 related costs are in respect of the write-off of
food and drink inventories resulting from the forced closure of all
sites on 20 March 2020.
The change of ownership costs in the year ended 19 April 2020
relate to costs incurred in the IPO of the business which completed
on 29 April 2019. These costs include employee bonuses and
professional fees. The costs incurred in the year to 21 April 2019
relate to costs incurred in the preparation for the IPO of the
business.
The IPO Related share-based award charge relates to awards made
to 485 employees where the shares vested either at IPO or on first
the anniversary of the IPO.
The impairment charge in respect of property, plant and
equipment, and the calculation methodology is set out in note
9.
7. Tax on loss
The income tax charge is applicable on the Group's operations in
the UK.
Year ended Year ended
19 April 21 April
2020 2019
Restated
GBP000 GBP000
Taxation charged to the income statement
Current income taxation - 918
Amounts (under)/over provisioned in
earlier years (130) (51)
----------- -----------
Total current income taxation (130) 867
=========== ===========
Deferred Taxation
Origination and reversal of temporary
timing differences
Current period (1,940) (420)
Prior period - 8
Adjustment in respect of change of rate
of corporation tax 110 5
----------- -----------
Total deferred tax (1,830) (407)
=========== ===========
Total taxation expense in the consolidated
income statement (1,960) 460
=========== ===========
The above is disclosed as:
Income tax expense - current period (1,940) 498
Income tax expense - prior period (20) (38)
----------- -----------
(1,960) 460
=========== ===========
Factors affecting the tax charge for
the period
Year ended Year ended
19 April 21 April
2020 2019
Restated
GBP000 GBP000
Loss before tax (14,781) (6,700)
At UK standard rate of corporation taxation
of 19% (2019: 19%). (2,808) (1,273)
Expenses not deductible for tax purposes
- Preference share interest 3 1,596
- Share based payments 545 -
- Other 661 404
Fixed asset differences 183 (229)
Movement in unrecognised deferred tax (524) -
Adjustments to tax charge in respect
of prior periods (130) (43)
Adjustment in respect of change of rate
of corporation tax 110 5
----------- -----------
Total tax charge for the period (1,960) 460
=========== ===========
8. Earnings per share
Basic (losses) / earnings per share is calculated by dividing
the profit attributable to equity shareholders by the weighted
average number of shares outstanding during the year, excluding
unvested shares held pursuant to the following long-term incentive
plans:
-- Loungers plc Employee Share Plan
-- Loungers plc Senior Management Restricted Share Plan
-- Loungers plc Value Creation Plan
Diluted earnings per share is calculated by adjusting the
weighted average number of ordinary shares outstanding to assume
conversion of all dilutive potential ordinary shares. During the
year ended 19 April 2020 the Group had potentially dilutive shares
in the form of unvested shares pursuant to the above long-term
incentive plans.
8. Earnings per share (continued)
Year ended Year ended
19 April 21 April
2020 2019
Restated
GBP000 GBP000
Loss for the year after tax (12,821) (7,160)
Basic weighted average number of shares 91,786,283 19,110,695
Adjusted for share awards 1,734,508 -
Diluted weighted average number of shares 93,520,791 19,110,695
Basic losses per share (p) (14.0) (37.5)
Diluted losses per share (p) (14.0) (37.5)
The share awards are not considered to be dilutive as they would
have the impact of reducing the losses per share.
Adjusted earnings per share is based on profit for the year
before exceptional items and the associated tax effect.
Year ended Year ended
19 April 21 April
2020 2019
Restated
GBP000 GBP000
Loss for the year before tax (14,781) (6,700)
Exceptional items 15,336 462
Exceptional write off of loan arrangement 1,447 -
fees
----------- -----------
Adjusted profit for the year before
tax 2,002 (6,238)
Tax credit / (charge) 1,960 (460)
Tax effect of exceptional items (1,719) (69)
----------- -----------
Adjusted profit / (loss) for the year
after tax 2,243 (6,767)
Basic adjusted earnings / (losses) per
share (p) 2.4 (35.4)
Diluted adjusted earnings / (losses)
per share (p) 2.4 (35.4)
9. Property, plant and equipment
Leasehold Motor Fixtures Right Total
Building Vehicles and Fittings of use
Improvements asset
GBP000 GBP000 GBP000 GBP000 GBP000
Cost
At 23 April 2018 (as
previously stated) 39,413 104 28,167 - 67,684
Adoption of IFRS 16 (3,859) - - 80,998 77,139
At 23 April 2018 (as
restated) 35,554 104 28,167 80,998 144,823
Additions 9,660 37 12,106 19,857 41,660
Disposals (287) (58) (312) (221) (878)
At 21 April 2019 44,927 83 39,961 100,634 185,605
Accumulated depreciation
At 23 April 2018 (as
previously stated) 3,348 29 5,301 - 8,678
Adoption of IFRS 16 (535) - - 15,424 14,889
At 23 April 2018 (as
restated) 2,813 29 5,301 15,424 23,567
Provided for the year 2,672 27 5,153 5,694 13,546
Disposals (286) (56) (303) (124) (769)
At 21 April 2019 5,199 - 10,151 20,994 36,344
Net book value
At 21 April 2019 39,728 83 29,810 79,640 149,261
============== ========== ============== ======== ========
Cost
At 22 April 2019 44,927 83 39,961 100,634 185,605
Additions 9,571 10 13,217 21,029 43,827
Disposals - (12) (31) (183) (226)
At 19 April 2020 54,498 81 53,147 121,480 229,206
Accumulated depreciation
At 22 April 2019 5,199 - 10,151 20,994 36,344
Provided for the year 3,160 34 6,436 7,177 16,807
Impairment 2,166 - 400 7,263 9,829
Disposals (12) (26) (183) (221)
At 19 April 2020 10,525 22 16,961 35,251 62,759
Net book value
-------------- ---------- -------------- -------- --------
At 19 April 2020 43,973 59 36,186 86,229 166,447
============== ========== ============== ======== ========
9. Property, plant and equipment (continued)
Impairment of property, plant and equipment and right of use
assets
The Group has determined that each site is a separate CGU for
impairment testing purposes. Each CGU is tested for impairment at
the balance sheet date if there exists at that date any indicators
of impairment. The Covid-19 pandemic and the associated national
lockdown introduced on 20 March 2020 are considered an indicator of
potential impairment, accordingly all sites have been tested for
impairment.
The value in use of each CGU is calculated based upon the
Group's latest three-year forecast, incorporating the impact of the
Covid-19 lockdown and assumptions concerning the rate at which site
level cash flows will recover. The site cash flows include an
allocation of central costs and ongoing capital expenditure to
maintain the sites. The cash flows exclude any growth capital. Cash
flows beyond the three-year period are extrapolated using the
Group's estimate of the long-term growth rate, currently 2.0%.
The key assumptions in the value in use calculations are the
like for like sales projections for each site, changes in the
operating cost base, the long-term growth rate and the pre-tax
discount rate. The post-tax discount rate is derived from the
Group's WACC and is currently 8.0%.
During the year the Group has recognised an impairment of charge
of GBP9,829,000 (2019: GBPnil). The cash flows used within the
impairment model are based upon assumptions which are sources of
estimation uncertainty. Management has performed sensitivity
analysis on the key assumptions in the impairment model using
reasonably possible changes in the key assumptions. A reduction in
site cash flows of 10% in each year would result in an increase in
the impairment charge of GBP797,000. A 100 basis point increase in
the discount rate would result in an increase in the impairment
charge of GBP1,354,000 and a 50 basis point reduction in the
terminal growth rate would result in an increase in the impairment
charge of GBP438,000.
10. Borrowings
19 April 21 April
2020 2019
GBP000 GBP000
Long term borrowings:
Secured bank loans 39,500 71,000
Loan arrangement fees (461) (1,447)
Loans from related parties - 17,932
Preference shares - 84,627
-------------------- ---------
39,039 172,112
==================== =========
As part of the IPO process, a share for share exchange saw the
preference shares and accrued dividends in Lion/Jenga Topco (21
April 2019: GBP84,627,000) reclassified as ordinary shares in
Loungers plc. Net proceeds of GBP57,941,000 raised from the IPO and
a new term loan facility of GBP32,500,000 were utilised to repay
outstanding loan stock (21 April 2019: GBP17,932,000) and bank debt
(21 April 2019: GBP71,000,000).
Secured bank loans
The Group's bank borrowings are secured by way of fixed and
floating charges over the Group's assets.
The facilities entered into at the time of the IPO provide for a
term loan of GBP32,500,000 and a revolving credit facility ("RCF")
of GBP10,000,000. The term loan is a five-year non-amortising
facility with a margin of 2% above LIBOR. A three-year interest
rate swap has been entered into that fixes LIBOR on the full term
loan facility at 0.7%.
The term loan and RCF are subject to financial covenants
relating to leverage and interest cover. The Group has been in
compliance with all of the covenants during the periods under
review.
At 19 April 2020 the term loan was fully drawn and GBP7,000,000
had been drawn down under the revolving credit facility.
10. Analysis of changes in net debt
At 23 April Cash flows Non-cash At 21 April
2018 movement 2019
Restated Restated
GBP000 GBP000 GBP000 GBP000
Cash in hand 7,669 (1,169) - 6,500
------------ ----------- ---------- ------------
Bank Loans (65,268) (4,000) (285) (69,553)
Lease liabilities (73,164) 8,412 (24,386) (89,138)
Unsecured loan stock (15,874) - (2,058) (17,932)
Preference shares (76,226) - (8,401) (84,627)
Net debt (222,863) 3,243 (35,130) (254,750)
Derivatives
Interest-rate swaps asset /
(liability) 323 - (333) (10)
Total derivatives 323 - (333) (10)
Net debt after derivatives (222,540) 3,243 (35,463) (254,760)
============ =========== ========== ============
At 22 April Cash flows Non-cash At 19 April
2019 movement 2020
Restated
GBP000 GBP000 GBP000 GBP000
Cash in hand 6,500 (2,417) - 4,083
------------ ----------- ---------- ------------
Bank Loans - due after one
year (69,553) 32,076 (1,562) (39,039)
Lease liabilities (89,138) 10,706 (26,507) (104,939)
Unsecured loan stock - due
after one year (17,932) 17,950 (18) -
Preference shares - due after
one year (84,627) - 84,627 -
Net debt (254,750) 58,315 56,540 (139,895)
Derivatives
Interest-rate swaps liability (10) 10 (332) (332)
Total derivatives (10) 10 (332) (332)
Net debt after derivatives (254,760) 58,325 56,208 (140,227)
============ =========== ========== ============
Non-cash movements in bank loans due after one year relate to
the amortisation of bank loan issue costs.
11. Reconciliation of statutory results to alternative
performance measures
Year ended Year ended
Note 19 April 21 April
2020 2019
GBP000 GBP000
Operating (loss) / profit (6,716) 12,703
Exceptional items 15,336 462
Share based payment charge / (credit) 1,125 (87)
Site pre-opening costs 2,220 1,904
----------- -----------
Adjusted operating profit 11,965 14,982
Depreciation (pre IFRS 16 right of
use asset charge) 9,630 7,853
IFRS 16 Right of use asset depreciation 7,177 5,694
(Profit) / loss on disposal of fixed
assets (5) 12
----------- -----------
Adjusted EBITDA (IFRS 16) 28,767 28,541
IAS 17 Rent charge (10,380) (8,306)
IAS 17 Rent charge included in IAS
17 pre-opening costs 426 347
Adjusted EBITDA (IAS 17) 18,813 20,582
=========== ===========
11. Reconciliation of statutory results to alternative
performance measures (continued)
Year ended Year ended
Note 19 April 21 April
2020 2019
GBP000 GBP000
Loss before tax (IFRS 16) (14,781) (6,700)
Exceptional administrative expenses 15,336 462
Exceptional finance costs 1,447 -
----------- -----------
Adjusted profit / (loss) before tax
(IFRS 16) 2,002 (6,238)
IAS 17 Rent charge (10,380) (8,306)
IAS 17 Leasehold depreciation (re
landlord contributions) (464) (294)
IFRS 16 Right of use asset depreciation 7,177 5,694
IFRS 16 Lease interest charge 5,478 4,671
IFRS 16 Lease interest income (50) (54)
----------- -----------
Adjusted profit / (loss) before tax
(IAS 17) 3,763 (4,527)
=========== ===========
Loss before tax (IFRS 16) (14,781) (6,700)
IAS 17 Rent charge (10,380) (8,306)
IAS 17 Leasehold depreciation (re
landlord contributions) (464) (294)
IFRS 16 Right of use asset depreciation 7,177 5,694
IFRS 16 Lease interest charge 5,478 4,671
IFRS 16 Lease interest income (50) (54)
----------- -----------
Loss before tax (IAS 17) (13,020) (4,989)
=========== ===========
Adjusted profit / (loss) before tax
(IFRS 16) 2,002 (6,238)
Tax credit / (charge) 1,960 (460)
Tax effect of exceptional items (1,719) (69)
Adjusted profit / (loss) after tax
(IFRS 16) 2,243 (6,767)
IAS 17 Rent charge (10,380) (8,306)
IAS 17 Leasehold depreciation (re
landlord contributions) (464) (294)
IFRS 16 Right of use asset depreciation 7,177 5,694
IFRS 16 Lease interest charge 5,478 4,671
IFRS 16 Lease interest income (50) (54)
IFRS 16 Tax effect (423) (290)
----------- -----------
Adjusted profit / (loss) after tax
(IAS 17) 3,581 (5,346)
=========== ===========
Basic weighted average number of shares 91,786,283 19,110,695
Diluted weighted average number of
shares 93,520,791 19,110,695
Adjusted basic earnings / (losses)
per share (p) IFRS 16 2.4 (35.4)
Adjusted diluted earnings / (losses)
per share (p) IFRS 16 2.4 (35.4)
Adjusted basic earnings / (losses)
per share (p) IAS 17 3.9 (28.0)
Adjusted diluted earnings / (losses)
per share (p) IAS 17 3.8 (28.0)
Net cash generated from operating
activities (IFRS 16) 24,397 28,287
IAS 17 Rent charge (10,380) (8,306)
Movement in working capital 2,616 1,438
----------- -----------
Net cash generated from operating
activities (IAS 17) 16,633 21,419
=========== ===========
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