RNS Number:7043D
Capital Bars PLC
13 January 2000
CAPITAL BARS PLC
INTERIM RESULTS FOR THE SIX MONTHS ENDED 3 OCTOBER 1999
CHAIRMAN'S STATEMENT
INTRODUCTION
Your company is in the process of being transformed in the current financial
year. The key actions which have been taken since the Company's last year end
have been to double the size of the business through the acquisition of
certain bar, restaurant and hotel venues in Dublin ("the O'Dwyer
acquisition"), gain a secondary listing on the Irish Stock Exchange, change
the name of the company to Capital Bars Plc and strengthen the Board.
Of fundamental importance is the emergence of the company following the
O'Dwyer acquisition as a leading leisure business in Dublin City with a unique
market position. Our focus will now be to exploit our advantage in this
important and growing market rather than being just another player in the
overcrowded UK bar and restaurant arena.
As a further decisive step in this process we intend to market the UK
businesses shortly and realise the value inherent in these assets for
reinvestment in Dublin.
THE O'DWYER ACQUISITION
In early September we announced the acquisition of six bar/restaurants and two
hotels in Dublin for a consideration of #14.6 million which has transformed
the scale and shape of the Group.
The acquisition was approved at our Extraordinary General Meeting on 27
September 1999 and following receipt of Irish Merger Clearance on 6 October
1999 the acquisition was completed on that date. Following the acquisition we
now operate eight bars/restaurants and two hotels in Dublin, with two further
bar/ restaurants and a hotel which are currently in the course of development
and are due to open in early 2000.
The results for the half year to 3 October 1999 therefore do not include any
contribution from these new businesses.
RESULTS
Our existing Dublin units have continued to produce healthy returns.
Turnover at #5,210,000 (IR#6,278,000) in our Dublin units was up 2% on a like
for like, punt for punt basis. Operating profits from our Dublin units before
allocation of head office costs were #914,000 (IR#1,102,000) which compares to
#988,000 (IR#1,141,000) in the prior year comparative period. This represents
an 18% margin on turnover (1998 : 19%).
Trading at Cafe en Seine in particular was strong, helped by a newly granted
late licence. There is much excitement surrounding the extension to the Cafe
en Seine premises, which will provide a late bar and extended restaurant area,
opening for Christmas 2000.
I indicated in the announcement of the O'Dwyer acquisition on 3 September 1999
that the first half of the year was a difficult trading period for our London
units, which suffered from increased competition. Trading at our
Peterborough venue has improved, however the performance at our Leeds venue
was disappointing.
As a result of these factors, total bar and restaurant operating profit
(before head office costs and exceptional items) for the period was #507,000,
which compares with #959,000 in the comparable period last year. The loss
before tax for the period was #163,000 (1998 loss restated : #30,000). Our
comparative results have been restated to reflect accounting policy changes
for pre-opening costs as referred to below.
Exceptional costs of #230,000 in the period are principally severance costs
arising from a rationalisation of our head office costs.
DIVIDEND
The Directors are pleased to declare a dividend of 0.7p, in line with the
prior year, which will be paid on 20 March 2000 to shareholders on the
register on 18 February 2000.
CHRISTMAS TRADING AND THE MILLENIUM
Like for like, punt for punt sales for our enlarged Dublin operations in the
period from the interim date to 3 January 2000 were 7% ahead. Like for like,
punt for punt turnover for the acquisitions over the same period was 12%
ahead, with O'Dwyers Mount St and The George doing particularly well. The
performance of Savannah bar has been disappointing; we are to reformat the
main bar area in the next two months in order to attract more day and early
evening trade
We opened three of our existing units in Dublin on New Years Eve, all of which
performed to capacity and each achieved the best single days trading in their
history.
Like for like sales in London since the interim date have continued at 9%
below the comparative period. The Christmas trading period started well,
however, in common with many UK operators with venues close to the major
national events, New Years Eve was extremely disappointing for our central
London venues.
All of our business systems have continued to work effectively into the Year
2000.
YEAR END
The programme of integration of the O'Dwyer acquisition and the new openings
and development opportunities in Dublin that have come with it will be largely
complete by September 2000 and accordingly, the Company's year end is to be
changed to 30 September. Our first financial year from the revised date will
therefore present a more accurate picture of the Company's trading potential.
However, in order to allow comparison with the figures to the previous year
end of 31 March, we will issue a further set of interim figures for the period
to 2 April 2000.
CHANGES IN ACCOUNTING POLICIES
Following the introduction of FRS15, Tangible Fixed Assets, in February 1999
the Board has reassessed accounting policies in this area. We have decided to
change our policies to be more financially prudent in respect of pre-opening
costs and the method of depreciating licensed leasehold premises.
Pre-opening costs were previously capitalised and amortised over 30 months,
commencing six months after the opening of the venue. With effect from the
current period, pre-opening expenses will be written-off in the period of the
relevant venue opening and have been treated as a prior period adjustment.
There were no openings in the six months to 3 Ocotber 1999.
Licensed leasehold premises were previously depreciated over their useful
lives using the annuity method. Depreciation will now be calculated using a
straight line basis. The additional depreciation charge arising as a result
of this change was #38,000 in the interim period.
YOUR BOARD
The Board has been strengthened considerably over the past three months.
Liam O'Dwyer has been appointed Chief Executive, with particular
responsibilities for design and development of new venues. Roger Beaumont
continues as Group Managing Director, with overall responsibility for
management and operations. Hugh Doherty and Aidan Corcoran have joined as
Finance Director and Commercial Director respectively.
I am also pleased to welcome Robert Breare who joined us on 29 November 1999
as a non-executive director. Robert is Chief Executive of Rhesus Holdings
Limited, the holding company of Alchemy's brewing and retail interests
comprising over 800 pubs. He was formerly founder and Chief Executive of
Arcadian International Plc. He brings extensive experience, not only of bars,
restaurants and hotels, but also a keen understanding of the challenges facing
smaller public companies.
I am proud to be a member of a strong and cohesive team of people, not only on
the main Board but also at the senior management level and beyond.
PROSPECTS
Capital Bars is now a very different business since I last reported to
shareholders. Following the acquisition, the Group has a real opportunity to
build on its position as one of Dublin's leading leisure operators. We are
in discussions over a number of additional Dublin venues and I look forward to
reporting further progress in due course.
Robert Gunlack
Chairman
13 January 2000
Enquiries:
Roger Beaumont, Managing Director Tel: 020 7287 1331
Hugh Doherty, Finance Director
Piers Hooper/Tim Robertson Tel: 020 7796 4133
Hudson Sandler
GROUP PROFIT AND LOSS ACCOUNT
for the six months ended 3 October 1999 (unaudited)
Six months to Six months to Year ended
3 October 27 September 4 April
1999 1998 1998
Restated Restated
#000 #000 #000
TURNOVER
Continuing operations: Republic
of Ireland 5,210 5,293 10,905
United Kingdom 3,403 3,088 7,410
Discontinued operations - 729 2,702
---------------------------------------------
8,613 9,110 21,017
Cost of sales 2,261 2,333 5,210
---------------------------------------------
Gross profit 6,352 6,777 15,807
Operating expenses 6,484 6,756 14,983
---------------------------------------------
OPERATING PROFIT
Republic of Ireland - bars, hotels
and restaurants 914 988 2,108
United Kingdom - bars and
restaurants (407) (29) 92
- write-off
of pre-opening
expenses - (470) (595)
Head Office ongoing (409) (421) (841)
Head Office exceptional (230) - (354)
---------------------------------------------
Continuing operations (132) 68 410
Discontinued - (47) 414
---------------------------------------------
Total operating profit (132) 21 824
---------------------------------------------
Loss on sale of freehold property - (3) -
Profit on sale of subsidiary undertakings - - 92
Net interest payable (31) (48) (123)
---------------------------------------------
(LOSS)/PROFIT ON ORDINARY ACTIVITIES
BEFORE TAXATION (163) (30) 793
Taxation 42 (114) (377)
---------------------------------------------
(LOSS)/PROFIT ON ORDINARY ACTIVITIES
AFTER TAXATION (121) (144) 416
Dividends
- Preference (131) (131) (262)
- Ordinary (235) (235) (671)
Other appropriations - non-equity shares (6) (6) (12)
---------------------------------------------
RETAINED LOSS FOR THE FINANCIAL PERIOD (493) (516) (529)
---------------------------------------------
(Loss)/earnings per share
Basic (0.77)p (0.84)p 0.42p
Diluted (0.77)p (0.82)p 0.42p
GROUP STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
for the six months ended 3 October 1999
Six months to Six months to Year ended
3 October 27 September 4 April
1999 1998 1999
Restated Restated
#000 #000 #000
(Loss)/profit attributable
to members of the parent company (121) (144) 416
Exchange difference on retranslation of
net assets of subsidiary undertaking (116) 231 143
------ ------ ------
TOTAL RECOGNISED (LOSSES)/GAINS
RELATED TO THE PERIOD (237) 87 559
------ ------ ------
GROUP BALANCE SHEET
at 3 October 1999
3 October 27 September 4 April
1999 1998 1999
Restated Restated
#000 #000 #000
FIXED ASSETS 9,303 12,886 9,145
------ ------ ------
CURRENT ASSETS
Stocks 295 253 293
Debtors and prepayments 2,514 2,012 1,734
Cash at bank and in hand 2,585 3,131 5,625
------ ------ ------
5,394 5,396 7,652
CREDITORS: amounts falling due within one year
Bank loans, overdrafts, advances
finance leases and hire purchase (116) (2,097) (306)
Trade creditors (1,123) (2,059) (1,732)
Other creditors (2,599) (2,087) (2,701)
------ ------ ------
(3,838) (6,243) (4,739)
------ ------ ------
NET CURRENT ASSETS/(LIABILITIES) 1,556 (847) 2,913
------ ------ ------
TOTAL ASSETS LESS CURRENT LIABILITIES 10,859 12,039 12,058
------ ------ ------
CREDITORS: amounts falling due after
more than one year (481) (1,132) (1,046)
PROVISION FOR LIABILITIES AND CHARGES (200) - (200)
------ ------ ------
10,178 10,907 10,812
------ ------ ------
CAPITAL AND RESERVES
Ordinary share capital 3,356 3,356 3,356
Preference share capital 3,000 3,000 3,000
Share premium 6,589 6,589 6,589
Revaluation reserve 955 1,015 993
Merger reserve 1,793 1,793 1,793
Profit and loss account (note 6) (5,515) (4,846) (4,919)
------ ------ ------
SHAREHOLDERS' FUNDS 10,178 10,907 10,812
------ ------ ------
GROUP STATEMENT OF CASH FLOWS
for the six months ended 3 October 1999
Six months to Six months to Year ended
3 October 27 September 4 April
1999 1998 1999
#000 #000 #000
NET CASH (OUTFLOW)/INFLOW FROM
OPERATING ACTIVITIES (1,235) 1,526 3,418
NET CASH OUTFLOW FROM RETURNS ON INVESTMENTS
AND SERVICING OF FINANCE (136) (179) (365)
TAX PAID (149) (92) (506)
CAPITAL EXPENDITURE AND FINANCIAL
INVESTMENT (614) (3,529) (3,436)
ACQUISITIONS AND DISPOSALS - - 1,246
EQUITY DIVIDENDS PAID (235) (436) (436)
------ ------ ------
NET CASH OUTFLOW BEFORE FINANCING (2,369) (2,710) (79)
FINANCING
Decrease in debt and lease financing (583) (166) (334)
------ ------ ------
NET CASH OUTFLOW FROM FINANCING (583) (166) (334)
------ ------ ------
DECREASE IN CASH (2,952) (2,876) (413)
------ ------ ------
GROUP STATEMENT OF CASH FLOWS
for the six months ended 3 October 1999
RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET (DEBT)/FUNDS
Six months to Six months to Year ended
3 October 27 September 4 April
Restated Restated
1999 1998 1999
#000 #000 #000
OPERATING (LOSS)/PROFIT (132) 21 824
Depreciation and amortisation 354 298 526
Loss on disposal of tangible fixed assets - - 35
(Increase)/decrease in stocks (7) (98) 442
(Increase)/decrease in debtors (790) 196 (238)
(Decrease)/increase in creditors (660) 1,109 1,629
Increase in provisions - - 200
------ ------ ------
Net cash (outflow)/inflow from
operating activities (1,235) 1,526 3,418
------ ------ ------
RECONCILIATION OF NET CASH FLOW TO MOVEMENTS IN NET (DEBT)/FUNDS
Decrease in cash in the period (2,952) (2,876) (413)
Cash outflow from changes in debt
and lease financing 597 166 334
------ ------ ------
MOVEMENT IN NET (DEBT)/FUNDS RESULTING
FROM CASH FLOWS (2,355) (2,710) (79)
Loans and finance leases disposed
of with subsidiary - - 1,716
Exchange movements (49) (209) (103)
NET FUNDS AT 4 APRIL 4,392 2,858 2,858
------ ------ ------
NET FUNDS AT 3 OCTOBER 1,988 (61) 4,392
------ ------ ------
NOTES TO THE ACCOUNTS
1. PREPARATION OF INTERIM FINANCIAL STATEMENTS
The interim financial information has been prepared on a basis consistent with
accounting policies disclosed in the statutory accounts of the Group for the
year ended 4 April 1999, with the exception of the policies for pre-opening
expenses and method of depreciation (see note 5).
The consolidated results for the year ended 4 April 1999 have, subject to the
adjustment referred to above, been extracted from the accounts of Capital Bars
Plc (formerly Break for the Border Group Plc) for that year, and do not
constitute the full statutory accounts of Capital Bars Plc. The accounts for
the year ended 4 April 1999 received an unqualified audit report and have been
filed with the Registrar of Companies.
2. TAXATION
The taxation charge has been calculated by applying the estimated effective
rate for the year against reported profits.
3. SEGMENTAL ANALYSIS
Turnover and operating profit are analysed by geographical area as follows:
Six mths to 3 Oct 1999 Six mths to 27 Sept 1998
Profit Profit Profit Profit
before after before after
allocation Allocation allocation allocation Allocation allocation
of head of head of head of head of head of head
office office office office office office
Turn- ex- ex- ex- Turn- ex- ex- ex-
over penses penses penses penses penses penses penses
Restated
#000 #000 #000 #000 #000 #000 #000 #000
Republic
of
Ire-
land 5,210 914 (247) 667 5,293 988 (245) 743
United
King
dom 3,403 (407) (162) (569) 3,088 (29) (143) (172)
Republic
of
Ireland
- dis
conti-
nued - - - - 729 (47) (33) (80)
Pre-
opening
expe-
nses - - - - - (470) - (470)
Head
office
costs - (409) 409 - - (421) 421 -
Ex-
ceptional
costs - (230) - (230) - - - -
----------------------------------------------------------------------
8,613 (132) - (132) 9,110 21 - 21
----------------------------------------------------------------------
NOTES TO THE ACCOUNTS
Year ended 4 April 1999
Profit Profit
before after
allocation Allocation allocation
of head of head of head
office office office
Turnover expenses expenses expenses
Restated
#000 #000 #000 #000
Republic of
Ireland 10,905 2,108 (498) 1,610
United
Kingdom 7,410 92 (343) (251)
Republic
of Ireland
- dis-
continued 2,702 538 (124) 414
Pre-opening
expenses - (595) - (595)
Head office
costs - (965) 965 -
Exceptional
costs - (354) - (354)
--------------------------------------------
21,017 824 - 824
--------------------------------------------
Head office costs relate to central costs concerned with the management,
control and administration of the Group as a whole. Costs incurred centrally
which relate specifically to operating units or divisions have been allocated
to those operations.
4. EARNINGS PER SHARE
Earnings per share has been calculated as follows:
Six months to Six months to Year ended
3 October 27 September 4 April
1999 1998 1999
Restated Restated
(Loss)/profit for the period #(121,000) #(144,000) #416,000
Preference dividends #(131,000) #(131,000) #(262,000)
Non-equity appropriations #(6,000) #(6,000) #(12,000)
------ ------ ------
Basic earnings #(258,000) #(281,000) #142,000
Average shares in issue - basic 33,562,749 33,562,749 33,562,749
Basic (loss)/earnings per share (0.77)p (0.84)p 0.42p
Diluted earnings #(258,000) #(281,000) #142,000
Average shares in issue
- diluted 33,562,749 34,117,666 33,581,376
Diluted earnings per share (0.77)p (0.82)p 0.42p
NOTES TO THE ACCOUNTS
5. TANGIBLE FIXED ASSETS
Following the publication of FRS15, Tangible Fixed Assets, which will apply to
the Group's next statutory accounts, it is proposed that pre-opening expenses
will be expensed in the period in which the relevant venue opens. Previously
these expenses were included in prepayments and amortised through the profit
and loss account over a 3 year period from 6 months after the opening of the
relevant venue. Operating expenses in the six months to 27 September 1998 and
in the year ended 4 April 1999 have been increased by #470,000 and #536,000
respectively as a result of this change in policy.
The directors have also reviewed the appropriateness of depreciation policies
and methods of write-off in the light of guidance set out in FRS15. It has
been determined that licensed leasehold premises should now be written-off on
a straight line basis over the lease term. Previously the annuity method had
been used. The additional depreciation arising in the period to 3 October
1999 as a result of this change in method was #38,000.
6. PROFIT AND LOSS ACCOUNT
The goodwill write-off reserve of #7,103,000 at 27 September 1998 has been
transferred to the profit and loss account.
END
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