RNS Number:5996O
Capital Bars PLC
28 July 2000
CAPITAL BARS PLC
PRELIMINARY RESULTS FOR YEAR ENDED 2 APRIL 2000
CHAIRMAN'S STATEMENT
INTRODUCTION
As shareholders will recall, our year end was changed from the end of March to
the end of September following the acquisition of several Dublin based trading
units and units under development at the beginning of October last year. The
results to 2 April 2000 therefore include the first 12 months of the
transitional 18 month period.
In January, I reported that your Board believed that shareholder value would
be greatly enhanced by concentration on our successful Dublin operations. In
accordance with that strategy we are in discussions with a party concerning
the disposal of our UK operations and look forward to announcing details in
due course. With a number of new openings planned in Dublin in the period to
30 September 2000, we will start the new financial year as a radically
different business.
FINANCIAL HIGHLIGHTS
Overall, Group turnover for the period under review increased from #21.0m to
#22.8m. Of this total, #7.5m came from our UK trading units. Turnover from
our Irish units increased from #10.9m to #15.4m, an increase of 41% (50% on a
punt for punt basis), including #4.7m from the acquisitions made in October
1999. Turnover for our ongoing Irish business was up 5% on a punt for punt
basis, down 2% on a sterling equivalent. Operating profits from our Irish
operations before exceptional items were #1.3m, with an operating loss before
exceptional items from our UK business of #1.0m. After exceptional items
(severance costs and the write-down of our UK assets) group operating losses
were #0.9m and losses on ordinary activities after taxation #1.1m.
DIVIDENDS
In view of the losses incurred by the UK operations, the investment required
as part of our Dublin opening programme, together with adverse taxation and
currency factors, we do not propose to declare a second interim or final
dividend for the period to 30 September 2000. We will of course review the
dividend policy during our new financial year.
OPERATING RESULTS FOR THE INTERIM 12 MONTHS- IRISH OPERATIONS
Operating profit from our ongoing Irish operation (excluding the October
acquisition) was #1.13m against #1.61m in the prior year. This fall in
operating profit reflects principally a rise in rents of #0.22m due to rent
reviews at two units and the increased strength of sterling against the Irish
Pound. These and other increased costs mask the increased trading performance
from individual units. Nearly all of these units within the ongoing Irish
business made healthy returns.
The acquired businesses (Zanzibar, The George, O'Dwyer Brothers Mount Street,
Savannah and Rathmines Capital Hotel) made an operating profit contribution
for the six months from the date of acquisition of #0.17m, after goodwill
amortisation of #0.11m. We saw significant increases in trade at The George
and O'Dwyer Brothers Mount Street, with Zanzibar maintaining its sales and
profitability. We have also seen an initial increase in trading levels at
Savannah after its closure for refurbishment during the first quarter of 2000.
The results for the acquired businesses are after bearing the additional cost
of an expanded management team which is now well placed to achieve the full
potential of the acquired business and the considerable programme of new
openings.
Since the period end the Irish operations having been greatly expanded with
two exciting new openings and a further three will take place before the end
of 2000 as set out under "New Openings" and "Site Pipeline" below. This is in
addition to the Planet Hollywood acquisition which we announced in May 2000.
UK OPERATIONS
Pre-exceptional, post head office operating losses from our UK businesses were
#1.0m, against #0.3m in the previous year. The disposal of the UK operations
will terminate our exposure to these losses on an ongoing basis.
We are disappointed that in the UK we have not been able to build a similar
critical mass to our Irish operations. While we have recently seen some
substantial improvements in trading at our Leeds and Peterborough units, we
still believe that the UK market is overcrowded and that there are better
investment opportunities for the Group in Ireland.
We have written down the book value of our UK assets by #1.1m to estimated net
realisable value, after taking account of costs of disposal.
NEW OPENINGS
Since the period end we have been very active, adding a new 86 bedroom hotel
and a 1,000 plus capacity bar/restaurant to our existing Dublin portfolio of 2
hotels and 8 bars.
In May 2000, we announced the acquisition of Planet Hollywood in Dublin, which
is expected to complete shortly. The unit is situated in a prime site on St
Stephens Green in Dublin and, like most of our units, has a capacity in excess
of 1,000. In the short term we will continue to trade the unit as Planet
Hollywood under a licence arrangement.
In April and June 2000 respectively, the Trinity Capital Hotel and Fireworks
bar opened. This unit, a former fire station close to the retail centre of
Dublin and Trinity College, comprises an 86 bedroom hotel, restaurant and
1,200 capacity bar and was part of the October acquisition. We are delighted
with the design and interior of both. Initial trading for both units is very
encouraging.
Lunasa, also part of the October acquisition, is due to open in September.
This bar, which previously traded under the name 'Bad Bobs', has undergone a
major redevelopment and refurbishment. It will trade over four floors and is
situated in the heart of Temple Bar, Dublin's cultural and nightlife centre.
SITE PIPELINE
We are in advanced discussions to acquire two further Dublin leasehold bar
units currently in the course of development over which the company has
certain option arrangements as set out in the circular in respect of the
October acquisition. Both units will have capacity in excess of 1,000 and are
due to open before Christmas 2000. Again these units are situated in
prominent trading locations in central Dublin.
Our extension to Caf, en Seine will be completed in 2001. The building boom
in Dublin has resulted in the need to factor in lengthened development
periods. We will also have to close our existing Caf, en Seine operation for
up to 6 months to complete this major extension which will effectively triple
the size of the existing unit. We believe this will be a landmark site in
central Dublin and is already attracting media attention because of its unique
design, capacity and location.
CURRENT TRADING
Like for like (punt for punt) sales for our Irish business since the year-end
are up 2% excluding any contribution from the new openings. Total turnover for
our Irish business including new openings, is up 8% since the period end. In
accordance with our revised accounting policies all preopening costs will now
be expensed in the financial period in which the new units open.
Like for like sales for the UK business since the year end are up 6%. We have
seen significant improvements in our Leeds and Peterborough units with sales
up 46% and 22% respectively. Like for like sales in our London units however
are down 9% since the period end.
PROSPECTS
Our company has had a successful Dublin operation for a number of years and
after taking account of the new openings referred to above, we will operate 13
bar/restaurants (including the substantially extended Caf, en Seine) and 3
hotels and as a market leader have a scale, focus and pipeline of
opportunities in Dublin to deliver significant value to our shareholders. We
look forward to our first financial year as from October 2000 as a business
focused on its Irish operations with great confidence.
Robert Gunlack
Chairman
28 July 2000
Enquiries:
Liam O'Dwyer, Chief Executive Tel: + 353 1 676 1717
Roger Beaumont, Managing Director Tel: + 44 20 7287 1331
Hugh Doherty, Finance Director Tel: + 44 20 7287 1331
Piers Hooper Tel: + 44 20 7796 4133
Hudson Sandler
GROUP PROFIT AND LOSS ACCOUNT
for the twelve months ended 2 April 2000 (unaudited)
12 months ended 2 April 2000 Year
ended
4 April
1999
Before After
excepti Excepti Excepti
onal onal onal Restated
items items items
#'000 #'000 #'000 #'000
Turnover
Irish operations
Ongoing 10,709 10,709 10,905
Acquisitions 4,656 4,656 -
------ ------ ------
15,365 15,365 10,905
UK operations 7,480 7,480 7,410
------ ------ ------
Continuing operations 22,845 22,845 18,315
Discontinued operations - - 2,702
------ ------ -------
Group turnover 22,845 22,845 21,017
Cost of sales (6,323) (6,323) (5,210)
------ ------ -------
Gross profit 16,522 16,522 15,807
Administration expenses (16,069) (16,069) (14,034)
Goodwill amortisation (113) - (113) -
Provision for loss on sale of
UK business - (1,050) (1,050) -
Operating exceptional items - (184) (184) (949)
Total administration expenses (16,182) (1,234)(17,416) (14,983)
Operating (loss)/profit
Ongoing Irish operations 1,128 - 1,128 1,610
Acquisitions 167 - 167 -
Irish operations 1,295 - 1,295 1,610
UK operations (955) - (955) (251)
Exceptional items - (1,234) (1,234) (949)
Discontinued operations - - - 414
Total operating (loss)/profit 340 (1,234) (894) 824
Profit on sale of subsidiary - 92
(894) 916
Interest receivable 32 195
Interest payable (222) (318)
(Loss)/profit on ordinary ----- -----
activities before taxation (1,084) 793
Taxation (39) (377)
----- -----
(1,123) 416
(Loss)/profit on ordinary
activities after taxation
Dividends:
- Preference (262) (262)
- Ordinary (235) (671)
Other appropriations - non equity shares (6) (12)
------ -----
Retained loss for the financial period (1,626) (529)
(Loss)/earnings per share
Basic (4.14)p 0.42p
Diluted (4.14)p 0.42p
GROUP BALANCE SHEET
at 2 April 2000 (unaudited)
2 April 4 April
2000 1999
Restated
#000 #000
Fixed assets
Intangible assets 13,139 -
Tangible assets 9,375 9,145
------- --------
22,514 9,145
Current assets
Stocks 399 293
Debtors and prepayments 1,801 1,734
Cash at bank and in hand 1,409 5,625
------- --------
3,609 7,652
Creditors: amounts falling due within one
year
Bank overdrafts, finance leases and hire
purchase (651) (306)
Trade creditors (1,704) (1,732)
Other creditors (2,078) (2,701)
------- --------
(4,433) (4,739)
------- --------
Net current (liabilities)/assets (824) 2,913
------- --------
Total assets less current liabilities 21,690 12,058
Creditors: amounts falling due after more
than one year (4,304) (1,046)
Provision for liabilities and charges (200) (200)
------- --------
17,186 10,812
------- --------
Capital and reserves
Ordinary share capital 3,356 3,356
Preference share capital 3,000 3,000
Share premium 6,589 6,589
Shares to be issued 8,594 -
Revaluation reserve 886 993
Merger reserve 1,793 1,793
Profit and loss account (note 6) (7,032) (4,919)
------- --------
Shareholders' funds 17,186 10,812
------- --------
GROUP STATEMENT OF CASH FLOWS
for the twelve months ended 2 April 2000 (unaudited)
12 Year
months Ended
to
2 April 4 April
2000 1999
#000 #000
Net cash inflow from operating activities 1,063 3,418
Net cash outflow from returns on
investments and servicing of finance (473) (365)
Tax paid (158) (506)
Capital expenditure and financial
investment (1,321) (3,436)
Acquisitions and disposals (5,884) 1,246
Equity dividends paid (906) (436)
Net cash outflow before financing (7,679) (79)
Financing
Increase/(decrease) in debt and lease
financing 3,335 (334)
----- -----
Net cash inflow/(outflow) from financing 3,335 (334)
----- -----
Decrease in cash (4,344) (413)
----- -----
GROUP STATEMENT OF CASH FLOWS
for the twelve months ended 2 April 2000 (unaudited)
RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET (DEBT)/FUNDS
12 12
months months
to to
2 April 4 April
2000 1999
#000 #000
Operating (loss)/profit (894) 824
Depreciation and amortisation 884 526
Loss on disposal of tangible fixed assets 56 35
Provision for loss on sale of UK business 1,050 -
LTIP charges 200 -
(Increase)/decrease in stocks (119) 442
Increase in debtors (129) (238)
Increase in creditors 15 1,629
Increase in provisions - 200
----- -----
Net cash inflow from operating activities 1,063 3,418
----- -----
Reconciliation of net cash flow to movements
in (debt)/funds
Decrease in cash in the period (4,344) (413)
Cash outflow from changes in debt and lease
financing (3,335) 334
------- --------
Movement in net debt resulting from cash flows (7,679) (79)
Loans acquired with subsidiary (160) -
Loans and finance leases disposed of with
subsidiary - 1,716
Exchange movements (99) (103)
Net funds at 4 April 1999 4,392 2,858
------ -----
Net (debt)/funds at 2 April 2000 (3,546) 4,392
------ -----
GROUP STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
for the twelve months ended 2 April 2000 (unaudited)
12 Year
months Ended
to
2 April 4 April
2000 1999
Restate
d
#000 #000
(Loss)/profit attributable to members of the
parent company (1,123) 416
Exchange difference on retranslation of net
assets of subsidiary undertaking (487) 143
----- ----
Total recognised (losses)/gains related to the
period (1,610) 559
NOTES TO THE ACCOUNTS
FOR THE TWELVE MONTHS ENDED 2 APRIL 2000 (UNAUDITED)
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:
12m ended 2 April 2000 Year ended 4 April 1999
Turnover Operating Turnover Operating
Profit Profit
Restated
#'000 #'000 #'000 #'000
Continuing
Operations
- Republic of
Ireland 15,365 1,295 10,905 1,610
- United
Kingdom 7,480 (2,189) 7,410 (1,200)
------ ------- ------ -------
22,845 (894) 18,315 410
Discontinued
Operations
- Republic of - - 2,702 414
Ireland
------ ------- ------ -------
Total 22,845 (894) 21,017 824
------ ------- ------ -------
Continuing operations comprises the group's operation of licensed restaurants,
bars and hotels in the Republic of Ireland and licensed restaurant interests
in the United Kingdom. Discontinued operations comprise theatre interests in
the Republic of Ireland.
4. (LOSS)/EARNINGS PER SHARE
(Loss)/earnings per share has been calculated as follows:
12 months Year
ended ended
2 April 4 April
2000 1999
Restated
(Loss)/profit for the period #(1,123,000) #416,000
Preference dividends #(262,000) #(262,000)
Non-equity appropriations #(6,000) #(12,000)
----------- --------
Basic (loss)/earnings #(1,391,000) #142,000
Average shares in issue basic- 33,562,749 33,562,749
Basic(loss)/earnings per share (4.14)p 0.42p
Diluted (loss)/earnings #(1,391,000) #142,000
Average shares in issue - 33,562,749 33,581,376
diluted
Diluted (loss)/earnings per share (4.14)p 0.42p
NOTES TO THE ACCOUNTS
FOR THE TWELVE MONTHS ENDED 2 APRIL 2000 (UNAUDITED)
4. (LOSS)/EARNINGS PER SHARE (continued)
The loss attributable to ordinary shareholders and weighted average number of
ordinary shares for the purpose of calculating the diluted earnings per
ordinary share are identical to those used for the basic earnings per ordinary
share. This is because the exercise of share options would have the effect of
reducing the loss per ordinary share and is therefore not dilutive under the
terms of FRS 14.
5. TANGIBLE FIXED ASSETS
Following the publication of FRS15, Tangible Fixed Assets, which will apply to
the Group's next statutory accounts 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 year ended 4 April 1999 have been increased by
#536,000 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 2 April 2000
as a result of this change in method was #76,000.
6. PROFIT AND LOSS ACCOUNT
Included in the profit and loss account is goodwill written-off of #7,103,000.
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