TIDMCOM
RNS Number : 2589C
Comptoir Group PLC
12 April 2017
Comptoir Group plc
("Comptoir" or the "Company")
Preliminary Results
Financial highlights
For the year ended 31 December 2016
-- Group revenue increased 21% to GBP21.5m (2015 - GBP17.7m)
-- Gross profit increased 21% to GBP15.7m (2015 - GBP13.0m)
-- Adjusted* EBITDA up 7% to GBP2.7m (2015 - GBP2.5m)
-- Adjusted* pre-tax profit was 4% lower at GBP1.6m (2015 - GBP1.6m)
-- IFRS loss before tax of GBP1.0m (2016 - GBP1.3m profit)
-- Loss per share from IFRS loss of (1.70)p (2015: 1.79p earnings per share)
-- Earnings per share from adjusted* pre-tax profit of 2.92p (2015: 3.03p)
-- Six new restaurants opened and three acquired.
-- Twenty-two restaurants trading as at 31 December 2016
*Adjusted EBITDA is calculated excluding the impact of GBP1.2m
(2015 - Nil) non-trading costs and GBP1.4m opening costs
12 April 2017
Enquiries:
Comptoir Group plc
Chaker Hanna Tel: 0207 486 1111
Cenkos Securities plc (NOMAD and Broker)
Bobbie Hilliam Tel: 020 7397 8900
Harry Pardoe
Alex Aylen
This announcement contains inside information.
Chairman's statement
For the year ended 31 December 2016
I am pleased to present the Group's results for the year ended
31 December 2016, being our first set of full-year results since
successfully listing on AIM. I am also pleased to report
considerable progress with our strategy to grow our operations and
extend the presence of our brands to new locations both in and
outside of London.
Results
Group revenue increased by GBP3.8m or 21% from GBP17.7m to
GBP21.5m and adjusted* EBITDA was 7% higher at GBP2.7m (2015 -
GBP2.5m).
Given that we opened six new restaurants in the period, off a
base of only 13 restaurants, the one-off costs incurred in
connection with these openings rose sharply to GBP1.4m (2015
GBP0.3m), with a commensurate impact on reported profits. For this
reason, we add back these opening costs in calculating adjusted*
EBITDA, as the Board believes this gives the most useful measure of
the underlying performance of the business.
After the inclusion restaurant opening costs and GBP1.2m
non-trading items, which comprises GBP0.5m (2015 - Nil) on
impairment of property, plant and equipment, GBP0.5m share option
charge (2015 - Nil) and GBP0.2m (2015 - Nil) of AIM listing fees,
the Income Statement shows a pre-tax loss of GBP1.0m (2015 -
GBP1.3m profit).
The Board does not recommend the payment of any dividend at this
time, as it is anticipated that all available funds will be
required for investment in new restaurants or the existing estate
for the foreseeable future.
Growth in operations
The Group has delivered on its plan to step up its rate of
expansion in the second half of the year, following the successful
IPO, increasing the number of restaurants trading from 14 to 22 at
the close of the year.
We have invested GBP7.5m in the fit-out of these new openings,
the acquisition of Yalla Yalla and the purchase of the freehold of
our Central Processing Unit (CPU). Taken together with one further
additional opening in London in January, this has been funded by
the proceeds of our AIM flotation and at the end of the year we had
retained cash and cash equivalents of GBP0.8m (2015 - GBP0.7m).
People
The friendliness, dedication and passion of our people is at the
heart of our success as a business. The busy opening programme that
we embarked on over the second half of 2016 has presented new
challenges for our management team, who have risen to the task
magnificently. I would like to thank them particularly and also our
new recruits who are delivering our delicious food with great
service and enthusiasm in our new restaurants, for all their
efforts.
Current trading
The Board is pleased that the financial outcome for 2016 was in
line with expectations.
The Group ended the year with 22 restaurants and 2 franchise
operations, ahead of expectations and is currently trading from 23
restaurants. Due to the Group's opening programme being ahead of
the schedule anticipated at the time of IPO, the Group expects to
only open a further three restaurants during the current year. 2017
will therefore be focused on bedding in new openings, promoting the
Comptoir brand to consumers in new locations and delivering on
anticipated returns.
During the first quarter of 2017 we have experienced the UK
consumer being cautious. Trading in January and February,
traditionally the Company's quietest months, was below
expectations, however, we saw improved trading in March. The Group
expects further positive trading in April (which includes Easter)
and into the summer months.
The Board has made the decision to reduce its opening schedule
for 2018 to 4 restaurants in 2018 (4 in 2017), which will impact
the financial performance in 2018. The Board will increase the
numbers of openings ahead of this revised 2018 target if suitably
attractive locations become available and dependent on market
conditions.
Richard Kleiner
Chairman
11 April 2017
Chief Executive's review
For the year ended 31 December 2016
I am delighted to report on what has been an exciting period of
development for the Group. We have had an extremely busy and
productive second half of the year, in which we have opened six new
restaurants, before acquiring three additional restaurants under
the Yalla Yalla brand, taking our portfolio up to twenty-two units
at the end of the year.
As a result, we have grown our annual sales to GBP21.5m (2015 -
GBP17.7m) and adjusted EBITDA (excluding one-off costs incurred in
opening new restaurants and other highlighted items) rose 7% to
GBP2.7m (2015 - GBP2.5m).
Review of operations
The existing estate delivered a solid performance, with further
growth from the restaurants that were opened late in 2016. Despite,
cost pressures in the supply chain in the wake of Brexit and the
introduction of the National Living Wage for employees over the age
of 25 in April 2016, our teams worked hard to control costs and I
am pleased to report that overall margins have been maintained.
As anticipated, much of the focus over the second half of the
year has been on opening and bedding in our new restaurants. We
have recruited and trained 237 new staff over this period and this
has provided the opportunity for existing members of the team to
take on greater responsibility in the General Manager and Assistant
Manager roles.
Opening costs
Opening costs during the period were GBP1.4m (2015 - GBP0.3m)
and are added back in adjusted* EBITDA.
There are a number of aspects of our particular operations that
are important to fully understand.
-- While Lebanese food is growing in popularity, it is not
familiar to all our potential customers and for this reason we have
to educate the local population and our sales tend to build towards
maturity over a number of years rather than maturing after several
months.
-- With all but two items on our menu, being freshly prepared
either in our central processing unit (CPU) or in our own
restaurant kitchens, means that we have to hire skilled chefs and
sous chefs and our wage costs will always be higher in the initial
months following opening compared to other casual dining
concepts.
-- With our current small scale, the costs incurred on
recruiting, training and supporting the teams put in place in our
restaurants, particularly those out in more isolated regional
locations, are necessarily higher than they would likely be in a
much larger chain which already enjoys national coverage.
For these reasons, it takes us a few months after opening a new
restaurant to bring our wage costs fully into line with our model
and for this reason our policy in respect of Opening costs is to
include not only the costs of overheads (rent, rates, insurance)
and wage costs up to the date of opening, but we also include an
element of wages, training and marketing costs incurred over the
first three months of trading only so that the level of costs
included in the site profit & loss account are
"normalised".
We believe this approach is both appropriate for our offering
and is consistent with the policy we have always applied. We also
feel it is appropriate for our stage of development.
Estate development
In the second half of the year, we opened new restaurants in
Bath, Exeter and Leeds to augment our existing regional presence in
Manchester which was opened in 2015.
At the same time we also extended our operations in London.
Firstly, we relocated our Soho branch of Comptoir Libanais to
larger premises on Poland Street and then we also opened a Comptoir
Libanais within the John Lewis store on Oxford Street. In addition,
we also launched our first Shawa branch which is not in a shopping
centre, on Haymarket.
In December, we announced that we had acquired three operations
(located in Soho, Fitzrovia and Greenwich) trading as Yalla Yalla.
With a distinct offering, billed as Beirut street food, we believe
that there may be potential to extend the presence of Yalla Yalla
strategically to additional London locations. Importantly, Yalla
Yalla, while a distinct brand, is also able to use the Group's
Central Production Unit (CPU) and food skills within the business,
enabling its integration into the Group to be seamless.
We opened a further Comptoir Libanais restaurant directly
opposite Gloucester Road tube station in January, where sales are
building steadily week to week and so we are now trading from 23
restaurants and two franchise operations.
We continue to develop our property pipeline. Further openings
are anticipated in Reading and Oxford, come summer and autumn,
respectively, and a number of other site opportunities are being
evaluated, both for 2018 and beyond. As set out earlier, however,
the Board is adopting a cautious approach to new openings in
2018.
Cashflows and financing
Cash generated from operations was GBP0.4m (2015 - GBP2.0m),
once again impacted by a relatively high level of one-off costs in
connection with the opening of new restaurants.
Capital expenditure, principally incurred on the fitting-out of
new restaurants totalled GBP6.0m (2015 - GBP3.0m), but also
including the purchase of three Yalla Yalla restaurants. A further
GBP1.6m was incurred in the purchase of the Group's Central
Production Unit (CPU) towards the end of the year, taking the total
level of investment up to GBP7.6m.
With an additional GBP0.8m of bank loans advanced during the
year and GBP7.4m proceeds from the AIM flotation, this resulted in
an overall cash inflow of GBP0.2m (2015 - GBP1.1m outflow) and at
the end of the year the Group had cash balances of GBP0.8m (2015 -
GBP0.7m).
The three further anticipated openings for 2017 can be funded
from internally generated cash and we are currently in discussions
with our bank regarding additional funding which will enable us to
continue the roll-out in 2018. Depending on the outcome, the
freehold of the CPU (which has been independently valued at GBP1.8m
also provides a means to raise additional funds if required.
Outlook
As set out in the Chairman's statement trading in the first two
months of the year was below expectations, however we saw a marked
improvement in March and we anticipate strong sales in April,
particularly over the Easter holiday period.
Sales at the new restaurants are gradually building towards the
levels anticipated at maturity and the Company is putting in place
a number of marketing initiatives, including a new menu, ahead of
the critical summer trading period to promote sales at both
existing and new restaurants. The Company is also heavily focused
on cost control.
The Directors believe the Group's current Comptoir Libanais
restaurant estate has significant potential for organic growth
which will continue to provide attractive returns for
shareholders.
Chaker Hanna
Chief Executive Officer
11 April 2017
Strategic Report
For the year ended 31 December 2016
The Directors present their strategic report for the year ended
31 December 2016.
Business model
The Group's principal brand is Comptoir Libanais, which offers a
fresh and healthy all-day dining experience based on Lebanese and
Eastern Mediterranean cuisine. This type of food is growing
steadily in popularity due to its flavorsome, healthy, low fat and
vegetarian friendly ingredients, as well as the ability to share
many of the (Mezze) dishes across the table with a group of
friends.
We seek to design each restaurant with a bold and fresh design
and give it a Middle Eastern café culture feel, which is welcoming
to all age groups and types of consumer. This is further enhanced
by an in-store retail offering that offers Arabic products
including colourful embroidered bags, harissa tins, and assorted
pastries and sweets.
Shawa is Lebanese grill concept serving lean grilled meats,
rotisserie chicken, homemade falafel, halloumi and fresh salads,
through a counter service operation located in high footfall
locations.
The estimated average spend per head at Comptoir Libanais is c.
GBP14 and the average spend at Shawa is lower than this, so our
offering is positioned in the affordable or value for money segment
of the UK casual dining market. In addition, our offering is
well-differentiated and faces only limited direct competition, in
marked contrast to other areas of the market.
Strategy for growth
Our strategy is to grow our owned operations under both the
Comptoir Libanais and Shawa brands. While Comptoir Libanais is
likely to remain the main focus of our operations, Shawa provides
the opportunity to offer our Lebanese food from a smaller footprint
and therefore create greater flexibility to our roll-out plans.
We also believe that there is considerable potential to grow the
Group's franchised operations and we see this as a complimentary
and relatively low-risk route to extend the presence of our brands,
both within the UK and in overseas territories.
Review of the business and key performance indicators (KPIs)
Group revenue increased by 21% to GBP21.5m (2015 - GBP17.7m) and
the Income Statement shows a pre-tax loss of GBP1.0m (2015 -
GBP1.3m). However, as stated above, at this stage in the
development of the business the Board believes that it is more
helpful to focus on adjusted EBITDA, which excludes non-recurring
items and costs incurred in connection with the opening of new
restaurants and on this measure we were ahead by 7% at GBP2.7m
(2015 - GBP2.5m).
The Board and management team use a range of performance
indicators to monitor and measure the performance of the business.
However, in common with most businesses, the critical KPI's are
focused on growth in sales, gross and operating profit margins
percentages and these are appraised against budgeted, forecast and
last year's achieved levels.
In terms of non-financial KPI's, the standard of service
provided to customers is monitored via the scores from a programme
of regular monthly "mystery diner" audits carried out at each store
and we use feedback from health and safety audits conducted by an
external consultant to ensure that critical operating procedures
are being adhered to.
Further explanation of the performance of the business over the
year is provided in the Chairman's Statement on page 1 and the
Chief Executive's Review on page 3.
Principal risks and uncertainties
The Board of Directors ("the Board") has overall responsibility
for identifying the most significant risks faced by the business
and for developing appropriate policies to ensure that those risks
are adequately managed.
The following have been identified as the most significant risks
faced by the Group, however, it should be noted that this is not an
exhaustive list and the Company has policies and procedures to
address other risks facing the business.
Consumer demand
Frequent or regular participation in the eating-out market is
afforded by the consumer is afforded out of household disposable
income. Macroeconomic factors such as employment levels, interest
rates and inflation can impact disposable income and consumer
confidence can dictate their willingness to spend. Any weakness in
consumer confidence could have an adverse effect on footfall and
customer spend in our restaurants.
As indicated above, the core brands which the Group is rolling
out are positioned in the affordable segment of the casual dining
market. A strong focus on superior and attentive service together
with value added marketing initiatives can help to drive sales when
customer footfall is more subdued.
Input cost inflation
The Group's key input variables are the cost of food and drink
and associated ingredients and the progressive increases in the UK
National Living Wage and Minimum Wage rates present a challenge we
must face up to alongside our peers and competitors.
We aim to maintain an appropriate level of flexibility in our
supplier base so we can work to mitigate the impact of input cost
inflation. Our teams work hard on predictive and responsive labour
scheduling so that our costs are well controlled.
Strategic and execution
The Group's central strategy is to open additional new outlets
under its core Comptoir Libanais and Shawa brands. Despite making
every effort, there is no guarantee that the Group will be able to
secure a sufficient number of appropriate sites to meet its growth
and financial targets and it is possible that new openings may take
time to reach the anticipated levels of mature profitability or to
match historical financial returns.
The Group has secured the services of an experienced property
consultant and having raised its profile as a consequence of its
successful AIM flotation, is developing stronger contacts with
potential landlords and their agents and advisers. However, there
will always be competition for the best sites and the Board will
continue to be highly selective in its evaluation of new sites in
order to ensure that target levels of return on investment are
achieved.
Future developments
The Group will continue with its plans to roll out its Comptoir
Libanais and Shawa brands to further new sites across the UK and to
explore further opportunities to grow the Comptoir Libanais brand
via franchising with suitable partners.
On behalf of the Board
Chaker Hanna
Chief Executive Officer
11 April 2017
Consolidated statement of comprehensive income
For the year ended 31 December 2016
Year ended
31 December
2015
Year ended
31 December
2016 (Restated)
Notes GBP GBP
Revenue 2 21,513,813 17,727,212
Cost of sales (5,818,647) (4,755,920)
------------------------------- ------ --- ------------- -------------
Gross profit 15,695,166 12,971,292
Distribution expenses (5,551,084) (4,459,684)
Administrative expenses (11,025,955) (7,146,583)
Other income 2 2,114 50,000
Operating (loss)/profit 3 (879,759) 1,415,323
Finance costs 7 (125,237) (127,810)
------------------------------- ------ --- ------------- -------------
(Loss)/profit before
tax (1,004,996) 1,287,513
Taxation credit/(charge) 8 86,883 (317,706)
------------------------------- ------ --- ------------- -------------
(Loss)/profit for the
year (918,113) 969,807
Other comprehensive - -
income
------------------------------- ------ --- ------------- -------------
Total comprehensive (loss)/income
for the year (918,113) 969,807
--------------------------------------- --- ------------- -------------
Basic (loss)/earnings
per share (pence) 9 (1.70) 1.79
Diluted (loss)/earnings
per share (pence) 9 (1.66) 1.79
------------------------------- ------ --- ------------- -------------
Adjusted EBITDA:
Operating (loss)/profit
- as above (879,759) 1,415,323
Add back:
Depreciation and amortisation 979,583 755,533
Non-trading items 3 1,183,592 -
Restaurant opening
costs 3 1,401,546 348,130
------------- -------------
Adjusted EBITDA 2,684,962 2,518,986
------------------------------- ------ --- ------------- -------------
All of the above results are derived from continuing operations.
(Loss)/profit for the year and total comprehensive (loss)/income
for the year is entirely attributable to the equity shareholders of
the company.
Consolidated balance sheet
At 31 December 2016
31 December
2015
31 December
2016 (Restated)
Notes GBP GBP
Assets
Non-current assets
Property, plant
and equipment 12 11,114,999 7,638,406
Intangible assets 11 1,121,021 -
Deferred tax asset 19 304,995 82,573
--------------------------- ------ --- ------------- -------------
Current asset 12,541,015 7,720,979
Inventories 14 479,830 304,199
Trade and other
receivables 15 2,197,315 1,637,140
Cash and cash equivalents 813,207 667,247
--------------------------- ------ --- ------------- -------------
3,490,352 2,608,586
Total assets 16,031,367 10,329,565
--------------------------- ------ --- ------------- -------------
Liabilities
Current liabilities
Borrowings 17 (632,041) (2,050,986)
Trade and other
payables 16 (3,557,649) (3,433,163)
Current tax liabilities (94,024) (273,341)
(4,283,714) (5,757,490)
Non-current liabilities
Borrowings 17 (1,380,407) (1,236,258)
Provisions for
liabilities 18 (35,050) (27,388)
Deferred tax liability 19 (287,287) (171,829)
(1,702,744) (1,435,475)
Total liabilities (5,986,458) (7,192,965)
--------------------------- ------ --- ------------- -------------
Net assets 10,044,909 3,136,600
--------------------------- ------ --- ------------- -------------
Equity
Share capital 20 960,000 100
Share premium 6,465,687 -
Other reserves 21 479,210 -
Retained earnings 2,140,012 3,136,500
--------------------------- ------ --- ------------- -------------
Total equity -
attributable to
equity shareholders
of the company 10,044,909 3,136,600
--------------------------- ------ --- ------------- -------------
The financial statements of Comptoir Group PLC (company
registration number 07741283) were approved by the Board of
Directors and authorised for issue on 11 April 2017 and were signed
on its behalf by:
Chaker Hanna
Chief Executive Officer
Consolidated statement of changes in equity
For the year ended 31 December 2016
Share Share Other Retained Total
capital premium reserves earnings equity
Notes GBP GBP GBP GBP GBP
Year ended 31
December 2015
At 1 January
2015 (restated) 100 - - 2,836,368 2,836,468
Profit for the
year - - - 998,651 998,651
Prior year adjustment 29 (28,844) (28,884)
----------------------- ------ --------- --------- ---------- ---------- ----------
Total comprehensive
income - - - 969,807 969,807
----------------------- ------ --------- --------- ---------- ---------- ----------
Transactions
with owners
Equity dividends - - (669,675) (669,675)
----------------------- ------ --------- --------- ---------- ---------- ----------
Total transactions
with owners - - - (669,675) (669,675)
----------------------- ------ --------- --------- ---------- ---------- ----------
At 31 December
2015 100 - - 3,136,500 3,136,600
----------------------- ------ --------- --------- ---------- ---------- ----------
Year ended 31
December 2016
At 1 January
2016 100 - - 3,136,500 3,136,600
Loss for the
year (918,113) (918,113)
----------------------- ------ --------- --------- ---------- ---------- ----------
Total comprehensive
income - - - (918,113) (918,113)
----------------------- ------ --------- --------- ---------- ---------- ----------
Transactions
with owners
Equity dividends 10 - - - (78,375) (78,375)
Share-based payments 23 - - 479,210 - 479,210
Issue of shares 20 959,900 6,465,687 - - 7,425,587
----------------------- ---- --------- ----------- --------- --------- -----------
Total transactions
with owners 959,900 6,465,687 479,210 (78,375) 7,826,422
----------------------- ---- --------- ----------- --------- --------- -----------
At 31 December
2016 960,000 6,465,687 479,210 2,140,012 10,044,909
----------------- -------- ---------- -------- ---------- -----------
Consolidated statement of cash flows
For the year ended 31 December 2016
Year ended
31 December
2015
Year ended
31 December
2016 (Restated)
Notes GBP GBP
Operating activities
Cash inflow from operations 24 370,022 2,512,281
Interest paid (125,237) (127,810)
Tax paid (199,397) (218,547)
------------------------------ ------ --- ------------- --------------
Net cash from operating
activities 45,388 2,165,924
------------------------------ ------ --- ------------- --------------
Investing activities
Purchase of property,
plant & equipment 12 (4,496,844) (3,012,283)
Payments for lease premiums 11 (1,075,000) -
Purchase of business 11 (400,000) -
Net cash used in investing
activities (5,971,844) (3,012,283)
------------------------------ ------ --- ------------- --------------
Financing activities
Proceeds from issue of
shares, net of issue costs 7,425,587 (100)
Dividends paid to equity
shareholders (78,375) (669,675)
Capital element of finance
leases paid (1,549,651) (124,204)
New bank loans 825,000 1,000,000
Bank loan repayments (537,729) (468,891)
------------------------------ ------ --- ------------- --------------
Net cash inflow/(outflow)
from financing activities 6,084,832 (262,870)
------------------------------ ------ --- ------------- --------------
Increase/(decrease) in
cash and cash equivalents 158,376 (1,109,229)
Cash and cash equivalents
at beginning of year 654,831 1,764,060
------------------------------ ------ --- ------------- --------------
Cash and cash equivalents
at end of year 813,207 654,831
------------------------------ ------ --- ------------- --------------
Cash and cash equivalents:
Cash at bank and in hand 813,207 667,247
Bank overdrafts included
in creditors payable within
one year - (12,416)
------------------------------ ------ --- ------------- --------------
Principal accounting policies for the consolidated financial
statements
For the year ended 31 December 2016
Reporting entity
Comptoir Group Plc (the Company) is a company incorporated and
registered in England and Wales, with a company registration number
of 07741283. The Company was formerly called Levant Restaurants
Group Limited and on 8 June 2016 it re-registered as a public
limited company and changed its name to Comptoir Group Plc. The
address of the Company's registered office is Suite 4, Strata
House, 34A Waterloo Road, London, NW2 7UH.
The consolidated financial statements of the Company for the
year ended 31 December 2016 comprise of the Company and its
subsidiaries (together referred to as the "Group").
Statement of compliance
The consolidated financial statements have been prepared in
accordance with International Financial Reporting Standards (IFRSs)
and its interpretations adopted by the International Accounting
Standards Board (IASB), as adopted by the European Union. The
parent company financial statements have been prepared using United
Kingdom Accounting Standards including FRS 102 'The financial
reporting standard applicable in the UK and Republic of Ireland'
and are set out on pages 55 to 62.
Going concern basis
The consolidated financial statements have been prepared on the
going concern basis as, after making appropriate enquires, the
Directors have a reasonable expectation that the Group has adequate
resources to continue in operational existence for the foreseeable
future, a period of not less than 12 months from the date of
approving these financial statements. The principal risks and
uncertainties facing the Group and further comments on going
concern are set out in the report of the Directors.
Basis of preparation
These consolidated financial statements for the year ended 31
December 2016 are the first financial statements of the Company
prepared in accordance with IFRS. The date of transition to IFRS
was 1 January 2015.
IFRS 1 'First-time Adoption of International Financial Reporting
Standards' permits companies adopting IFRS for the first time to
take certain optional exemptions from the full retrospective
application of IFRS. The Group and parent company previously
adopted FRS 102 'The financial reporting standard applicable in the
UK and Republic of Ireland' (UK GAAP) in their financial statements
for the year ended 31 December 2015 which is materially consistent
with IFRS. No further transitional adjustments or disclosures are
required from the conversion of the Group's UK GAAP financial
statements to these IFRS consolidated financial statements.
The financial statements are presented in Pound Sterling (GBP),
which is both the functional and presentational currency of the
Group and Company. All amounts are rounded to the nearest pound,
except where otherwise indicated.
The Group and parent company financial statements have been
prepared on the historical cost convention as modified for certain
financial instruments, which are stated at fair value. Non-current
assets are stated at the lower of carrying amount and fair value
less costs to sell.
Significant accounting judgments and estimates
The preparation of financial statements in conformity with IFRS
requires management to make judgments, estimates and assumptions
that affect the application of policies and reported amounts of
assets and liabilities, income and expenses. The estimates and
associated assumptions are based on historical experience and
various other factors that are believed to be reasonable under the
circumstances, the results of which form the basis of making the
judgments about carrying values of assets and liabilities that are
not readily apparent from other sources. The resulting accounting
estimates may differ from the related actual results.
The estimates and underlying assumptions are reviewed on an
ongoing basis. Revisions to accounting estimates are recognised in
the period in which the estimate is revised if the revision affects
only that period, or in the period of the revision and future
periods if the revision affects both current and future
periods.
In the process of applying the Group's accounting policies,
management has made a number of judgments and estimations of which
the following are the most significant.
The estimates and assumptions that have a risk of causing
material adjustment to the carrying amounts of assets and
liabilities within the future financial years are as follows:
Depreciation, useful lives and residual values of property,
plant & equipment
The Directors estimate the useful lives and residual values of
property, plant & equipment in order to calculate the
depreciation charges. Changes in these estimates could result in
changes being required to the annual depreciation charges in the
statement of comprehensive incomes and the carrying values of the
property, plant & equipment in the balance sheet.
Impairment of assets
The Group assesses at each reporting date whether there is an
indication that an asset may be impaired. If any such indication
exists, or when annual impairment testing for an asset is required,
the Group makes an estimate of the asset's recoverable amount. An
asset's recoverable amount is the higher of an asset's or
cash-generating unit's fair value less costs to sell and its value
in use and is determined for an individual asset, unless the asset
does not generate cash inflows that are largely independent of
those from other assets or groups of assets.
Where the carrying amount of an asset exceeds its recoverable
amount, the asset is considered impaired and is written down to its
recoverable amount. In assessing value in use, the estimated future
cash flows are discounted to their present value of money and the
risks specific to the asset. Impairment losses of continuing
operations are recognized in the profit or loss in those expense
categories consistent with the function of the impaired asset.
An impairment of assets of GBP471,796 was required in the year
ended 31 December 2016.
Lease classification
The Group has a substantial amount of leases and therefore their
classification as either finance or operating leases is critical to
the financial statements. The accounting for leases involves the
exercise of judgment, particularly in determining whether the
leases meet the definition of an operating or a finance lease.
Leases are classified as financial leases whenever the terms of
the lease transfer substantially all the risks and rewards of the
ownership to the lessee. All other leases are classified as
operating lease.
Deferred tax liability
The Group estimates future profitability in arriving at the fair
value of the deferred tax assets and liabilities. If the final tax
outcome is different to the estimated deferred tax amount the
resulting changes will be reflected in the statement of
comprehensive income, unless the tax relates to an item charged to
equity in which case the changes in tax estimates will also be
reflected in equity.
Future accounting policies
At the date of authorisation of these financial statements, the
following new and revised IFRS Standards and Interpretations have
been adopted in the current year, where applicable to the Group.
Their adoption has not had any significant impact on the amounts
reported in the financial statements.
IFRS 11 (Amended) Accounting for Acquisitions of Interests in
Joint Operations
IAS 16 & IAS 38 (Amended) Clarification of Acceptable
Methods of Depreciation and Amortisation
IAS 1 (Amended) Disclosure Initiative
IFRS 14 (Issued) Regulatory Deferral Accounts
IFRS 2012 - 2014 Cycle
At the date of authorisation of these financial statements, the
following IFRS Standards and Interpretations, which have not been
applied in these financial statements, were in issue but not yet
effective:
IAS 7 (Amended) Disclosure Initiative
IFRS 2 (Revised) Classification and measurement of Share-based
Payment Transactions
IFRS 9 (Revised) Financial Instruments
IFRS 15 Revenue from Contracts with Customers
IFRS 16 Leases
IFRS 2014 - 2016 Cycle
The Directors have assessed the impact and timing of application
of the Standards and Interpretations listed above and do not expect
that their adoption will have a material impact on the financial
statements of the Group in future periods.
Beyond the information above, it is not practicable to provide a
reasonable estimate of the effect of these standards until a
detailed review has been completed.
Significant accounting policies
The accounting policies set out below have been applied
consistently to all periods presented in the historical
consolidated financial statements, unless otherwise indicated.
(a) Comparative data
The comparative figures for the year ended 31 December 2015 have
been extracted from the consolidated financial statements, which
were prepared in accordance with FRS102 'The Financial Reporting
Standard applicable in the UK and Republic of Ireland' ("FRS102")
and the requirements of Companies Act 2016. FRS102, also known as
the new UK Generally Accepted Accounting Practice ("new UK GAAP")
is materially consistent with IFRS for the Group. No further
transitional adjustments and disclosures are required from the
conversion of the Group's UK GAAP financial statements to IFRS.
(b) Basis of consolidation
These financial statements consolidate the financial statements
of the Company and all of its subsidiary undertakings drawn up to
31 December 2016.
Subsidiaries are entities controlled by the Company. Control
exists when the Company has the power, directly or indirectly, to
govern the financial and operating policies of an entity so as to
obtain benefits from its activities. In assessing control,
potential voting rights that presently are exercisable or
convertible are taken into account, regardless of management's
intention to exercise that option or warrant. The financial
statements of subsidiaries are included in the consolidated
financial statements from the date that control commences until the
date that control ceases.
The cost of an acquisition is measured as the fair value of the
assets given, equity instruments issued and liabilities incurred or
assumed at the date of exchange, plus costs directly attributable
to the acquisition. Identifiable assets acquired and liabilities
and contingent liabilities assumed are measured initially at their
fair values at the acquisition date, irrespective of the extent of
any minority interest. The excess of the cost of acquisition over
the fair value of the identifiable net assets acquired is recorded
as goodwill.
All intra-group balances, transactions, income and expenses and
profits and losses resulting from intra-group transactions are
eliminated fully on consolidation. The gain or loss on disposal of
a subsidiary company is the difference between net disposals
proceeds and the Group's share of its net assets together with any
goodwill and exchange differences.
(c) Foreign currency translation
Functional and presentational currency
Items included in the financial results of each of the Group
entities are measured using the currency of the primary economic
environment in which the entities operate (the functional
currency). The consolidated financial statements are presented in
Pounds Sterling ("GBP") which is the Company's functional and
operational currency.
Transactions and balances
Foreign currency transactions are translated into the functional
currency using the exchange rates prevailing at the dates of the
transactions. Foreign exchange gains and losses resulting from the
settlement of such transactions and from the translation at year
end exchange rates of monetary assets and financial liabilities
denominated in foreign currencies are recognised in the statement
of comprehensive income.
(d) Financial instruments
Financial assets and financial liabilities are measured
initially at fair value plus transactions costs. Financial assets
and financial liabilities are measured subsequently as described
below.
Financial assets
The Group classifies its financial assets as 'loans and
receivables'. The Group assesses at each balance sheet date whether
there is objective evidence that a financial asset or a group of
financial assets is impaired.
Loans and receivables are non-derivative financial assets with
fixed and determinable payments that are not quoted in an active
market. They are included in current assets, except for maturities
greater than 12 months after the statement of financial position
date, which are classified as non-current assets. Loans and
receivables are classified as 'trade and other receivables' in the
statement of financial position.
Trade receivables are recognised initially at fair value and
subsequently measured at amortised cost using the effective
interest method, less provision for impairment. After initial
recognition loans and receivables are carried at amortised cost
using the effective interest rate method less any allowance for
impairment. Gains and losses are recognised in the income statement
when the loans and receivables are derecognised or impaired, as
well as through the amortisation process.
A provision for impairment of trade receivables is established
when there is objective evidence that the Group will not be able to
collect all amounts due according to the original terms of the
receivables. Significant financial difficulty, high probability of
bankruptcy or a financial reorganisation and default are considered
indicators that the trade receivable is impaired. The amount of the
provision is the difference between the asset's carrying amount and
the present value of the estimated future cash flows discounted at
the original effective interest rate. The loss is recognised in the
income statement. When a trade receivable is uncollectable, it is
written off against the allowance account for trade receivables.
Subsequent recoveries of amounts previously written off are
credited to the statement of comprehensive income.
Financial assets are derecognised when the contractual rights to
the cash flows from the financial asset expire, or when the
financial asset and all substantial risks and rewards are
transferred.
Financial liabilities
The Group's financial liabilities include trade and other
payables.
Trade payables are recognised initially at fair value less
transaction costs and subsequently measured at amortised cost using
the effective interest method ("EIR" method).
Amortised cost is calculated by taking into account any discount
or premium on acquisition and fees or costs that are an integral
part of the EIR. The EIR amortisation is included in finance costs
in the statement of comprehensive Income.
A financial liability is derecognised when it is extinguished,
discharged, cancelled or expires.
(e) Property, plant and equipment
Items of property, plant and equipment are stated at cost less
accumulated depreciation and impairment losses.
Leases in which the Group assumes substantially all the risks
and rewards of ownership are classified as finance leases. The
owner-occupied properties (excluding land element) acquired by way
of finance lease are stated at an amount equal to the lower of
their fair value and the present value of the minimum lease
payments at inception of the lease, less accumulated depreciation
and impairment. Lease payments are accounted for as described in
accounting policy (o).
Subsequent costs
The Group recognises in the carrying amount of an item of
property, plant and equipment the cost of replacing part of such an
item when that cost is incurred if it is probable that the future
economic benefits embodied with the item will flow to the Group and
the cost of the item can be measured reliably. All other costs are
recognised in the statement of comprehensive income as an expense
as incurred.
Depreciation
Depreciation is charged to the income statement on a reducing
balance basis and on a straight-line basis over the estimated
useful lives of corresponding items of property, plant and
equipment:
Land and buildings Leasehold Over the length of the lease
Land and buildings Freehold 4% straight line basis
Plant and machinery 15% on reducing balance
Fixture, fittings and equipment 10% on reducing balance
The carrying values of plant and equipment are reviewed at each
reporting date to determine whether there are any indications of
impairment. If any such indication exists, the assets are tested
for impairment to estimate the assets' recoverable amounts. Any
impairment losses are recognized in the statement of comprehensive
income.
The assets' residual values and useful lives are reviewed, and
adjusted if appropriate, at each statement of financial position
date. Gains and losses on disposals are determined by comparing the
proceeds with the carrying amount and are recognised within the
Statement of Comprehensive Income.
(f) Intangible assets - Goodwill
All business combinations are accounted for by applying the
acquisition method. Goodwill represents amounts arising on
acquisition of subsidiaries, associates and joint ventures.
Goodwill represents the difference between the cost of the
acquisition and the fair value of the net identifiable assets
acquired.
Goodwill is stated at cost less any accumulated impairment
losses. Goodwill is allocated to cash generating units and is
formally tested for impairment annually, thus is not amortised. Any
excess of fair value of net assets over consideration on
acquisition are recognised directly in the income statement.
(g) Intangible assets - lease premiums
Lease premiums paid to previous tenants are recognised within
the Balance Sheet as an intangible asset and amortised over the
length of the lease. The amortisation is charged to the statement
of comprehensive income on a straight-line basis.
(h) Inventories
Inventories are stated at the lower of costs and net realisable
value. Cost comprises direct materials, and those direct overheads
that have been incurred in bringing the inventories to their
present location and condition.
Net realisable value is the estimated selling price less all
estimated costs of completion and costs to be incurred in
marketing, selling and distribution.
(i) Cash and cash equivalents
Cash and cash equivalents comprise cash in hand, cash at bank,
deposits held at call with banks and other short-term highly liquid
investments with original maturities of three months or less. Bank
overdrafts that are repayable on demand are included within
borrowings in current liabilities on the balance sheet.
For the purpose of the statement of cash flows, cash and cash
equivalents consist of cash and cash equivalents as defined above,
net of outstanding bank overdrafts.
(j) Share-based payments
The Group's share option programme allows Group employees to
acquire shares of the Company and all options are equity-settled.
The fair value of options granted is recognised as an employee
expense with a corresponding increase in equity. The fair value is
measured at grant date and spread over the period during which the
employees become unconditionally entitled to the options. The fair
value of the options granted is measured using the Black-Scholes
model, taking into account the terms and conditions upon which the
options were granted. The amount recognised as an expense is
adjusted to reflect the actual number of share options that
vest.
(k) Provisions for liabilities
A provision is recognised in the balance sheet when the Group
has a present legal or constructive obligation as a result of a
past event, and it is probable that an outflow of economic benefits
will be required to settle the obligation.
The amount recognised as a provision is the best estimate of the
consideration required to settle the present obligation at the end
of the reporting period, taking into account the risks and
uncertainties surrounding the obligation. Where the effect of the
time value of money is material, the amount expected to be required
to settle the obligation is recognised at present value using a
pre-tax discount rate. The unwinding of the discount is recognised
as a finance cost in profit or loss in the period it arises.
Provisions for leasehold property dilapidation repairs are
recognised when the Group has a present obligation to carry out
dilapidation work on the leasehold premises before the property is
vacated. The amount recognised as a provision is the best estimate
of the costs required to carry out the dilapidations work and is
spread over the expected period of the tenancy.
(l) Deferred tax and current tax
Current income tax assets and liabilities for the current period
are measured at the amount expected to be recovered or paid to the
taxation authorities. A provision is made for corporation tax for
the reporting period using the tax rates that have been
substantially enacted for the company at the reporting date.
Current income tax relating to items recognised directly in
equity is recognised in equity and not in the Statement of
Comprehensive Income.
Deferred income tax is provided in full on a non-discounted
basis, using the liability method, on temporary differences arising
between the tax bases of assets and liabilities and their carrying
amounts in the consolidated financial statements. Deferred income
tax is determined using tax rates (and laws) that have been enacted
or substantially enacted by the statement of financial position
date and are expected to apply when the related deferred income tax
asset is realised or the deferred income tax liability is
settled.
Deferred income tax assets are recognised to the extent that it
is probable that future taxable profit will be available against
which the temporary differences can be utilised.
(m) Employee benefits
Short term employee benefits
Wages, salaries, paid annual leave, paid sick leave and bonuses
are recognised as an expense in the period in which the associated
services are rendered by employees.
The Group recognises an accrual for annual holiday pay accrued
by employees as a result of services rendered in the current
period, and which employees are entitled to carry forward and use
within 12 months. The accrual is measured at the salary cost
payable for the period of absence.
Pensions and other post-employment benefits
The Group pays monthly contributions to defined contribution
pension plans. The legal or constructive obligation of the Group is
limited to the amount that they agree to contribute to the plan.
The contributions to the plan are charged to the Statement of
Comprehensive Income in the period to which they relate.
Termination benefits are recognised immediately as an expense
when the Group is demonstrably committed to terminate the
employment of an employee or to provide termination benefits.
(n) Revenue
Revenue represents amounts received and receivable for services
and goods provided (excluding value added tax) and is recognised at
the point of sale. Revenue is recognised to the extent that it is
probable that the economic benefits will flow to the Group and the
reserve can be reliably measured.
(o) Expenses
Operating lease payments
Leases in which a significant portion of the risks and rewards
of ownership are retained by the lessor are classified as operating
leases. Payments made under operating leases are recognised in the
comprehensive income statement on a straight-line basis over the
term of the lease. Incentives to enter into an operating lease are
also spread on a straight-line basis over the lease term as a
reduction in rental expense.
Finance lease payments
Leases are classified as finance leases whenever the terms of
the lease transfer substantially all the risks and rewards of
ownership of the leased asset to the Group. All other leases are
classified as operating leases. Assets held under finance leases
are recognised initially at the fair value of the leased asset (or,
if lower, the present value of minimum lease payments) at the
inception of the lease. The corresponding liability to the lessor
is included in the statement of financial position as a finance
lease obligation.
Minimum lease payments are apportioned between the finance
charge and the reduction of the outstanding liability. The finance
charge is allocated to each period during the lease term so as to
produce a constant periodic rate of interest on the remaining
balance of the liability. Finance charges are deducted in measuring
profit or loss.
Assets held under finance leases are included in tangible fixed
assets and depreciated and assessed for impairment losses in the
same way as owned assets.
Opening expenses
Property rentals and related costs incurred up to the date of
opening of a new restaurant are written off to the income statement
in the period in which they are incurred. Promotional and training
costs are written off to the income statement in the period in
which they are incurred.
Financial expenses
Financial expenses comprise of interest payable on bank loans,
hire purchase liabilities and other financial costs and charges.
Interest payable is recognised on an accrual basis.
(p) Ordinary share capital
Ordinary shares are classified as equity. Costs directly
attributable to the increase of new shares or options are shown in
equity as a deduction from the proceeds.
(q) Dividend policy
In accordance with IAS 10 'Events after the Balance Sheet Date',
dividends declared after the balance sheet date are not recognised
as a liability at that balance sheet date, and are recognised in
the financial statements when they have received approval by
shareholders. Unpaid dividends that are not approved are disclosed
in the notes to the consolidated financial statements.
(r) Commercial discount policy
Commercial discounts represent a reduction in cost of goods and
services in accordance with negotiated supplier contracts, the
majority of which are based on purchase volumes. Commercial
discounts are recognised in the period in which they are earned and
to the extent that any variable targets have been achieved in that
financial period. Costs associated with commercial discounts are
recognised in the period in which they are incurred.
(s) Operating segments
An operating segment is a component of an entity that engages in
business activities from which it may earn revenues and incur
expenses (including revenue and expenses related to transactions
with other components of the same entity), whose operating results
are regularly reviewed by the entity's Chief Operating Decision
Maker to make decisions about resources to be allocated to the
segment and assess its performance, and for which discrete
financial information is available. The Chief Operating Decision
Maker has been identified as the Board of Executive Directors, at
which level strategic decisions are made.
Notes to the consolidated financial statements
For the year ended 31 December 2016
1. Segmental analysis
The Group has only one operating segment being: the operation of
restaurants with Lebanese and Middle Eastern Offerings and one
geographical segment being the United Kingdom. The Group's brands
meet the aggregation criteria set out in paragraph 22 of IFRS 8
'Operating Segments' and as such the Group reports the business as
one reportable segment.
None of the Group's customers individually contribute over 10%
of the total revenues.
2. Revenue
Year ended Year ended
31 December 31 December
2016 2015
GBP GBP
Income for the year consists of
the following:
Revenue from continuing operations
21,513,813 17,727,212
Other income not included within
revenue in the income statement:
Other income 2,114 50,000
------------------------------------- ------------- -------------
Total income for the year 21,515,927 17,777,212
------------------------------------- ------------- -------------
3. Group operating (loss)/profit
Year ended Year ended
31 December 31 December
2016 2015
GBP GBP
This is stated after charging/(crediting):
AIM admission costs (see note
4) 232,586 -
Operating lease charges 2,194,804 1,839,372
Impairment of assets (see note
12) 471,796 -
Share based payments (see note
23) 479,210 -
Opening costs (see below) 1,401,546 348,130
Amortisation of intangible assets
(see note 11) 28,958 -
Depreciation of property, plant
and equipment (see note 12) 950,625 755,533
Exchange losses - 159
Audit fees (see note 5) 90,000 38,500
-------------------------------------------- ------------- -------------
Non-trading items shown on the consolidated statement of
comprehensive income totalling GBP1,183,592 comprises AIM admission
costs (GBP232,586), share-based payments (GBP479,210) and
impairment of assets (GBP471,796).
For the initial trading period following opening of a new
restaurant, the performance of that restaurant will be lower than
that achieved by other, similar mature restaurants. The difference
in this performance, which is calculated by reference to gross
profit margins amongst other key metrics is quantified and included
within opening costs. The breakdown of opening costs, between
pre-opening costs and post-opening costs is shown below:
Year ended Year ended
31 December 31 December
2016 2015
GBP GBP
Pre-opening costs 907,045 225,870
Post-opening costs 494,501 122,260
-------------------- ------------- -------------
1,401,546 348,130
-------------------- ------------- -------------
4. AIM admission costs
During the year ended 31 December 2016, the Company carried out
an initial public offering ("IPO") of its ordinary shares and on 21
June 2016 the ordinary shares of the Company were admitted to
trading on London's Alternative Investment Market ("AIM"). At the
time of the IPO the Company issued 16,000,000 new shares to the
public at an IPO price of GBP0.50 each, raising GBP8,000,000 of new
capital for the Group, before issue costs.
The expenses of GBP574,413 incurred directly on the issue of the
new shares have been debited to the share premium account, whilst
the costs incurred relating to the admission of the Company's
existing shares to trading on AIM, which totalled GBP232,586, have
been included within AIM admission costs and are shown separately
on the face of the statement of comprehensive income.
5. Auditors' remuneration
Year ended Year ended
31 December 31 December
2016 2015
GBP GBP
Auditors' remuneration:
Fees payable to Company's auditor
for the audit of its annual accounts 15,000 15,000
Other fees to auditors
The audit of Company's subsidiaries 20,000 20,000
--------------------------------------- ------------------------ --------------
Total audit fees 35,000 35,000
--------------------------------------- ------------------------ --------------
Reporting accountant services 55,000 -
Tax services - 3,500
--------------------------------------- ------------------------ --------------
Total non-audit fees 55,000 3,500
--------------------------------------- ------------------------ --------------
Total auditors' remuneration 90,000 38,500
--------------------------------------- ------------------------ --------------
6. Staff costs and numbers
Year ended Year ended
31 December 31 December
2016 2015
GBP GBP
(a) Staff costs (including directors):
Wages and salaries:
Kitchen, floor and management
wages 6,594,374 5,397,157
Other costs:
Social security costs 549,430 352,309
Share-based payments (note 23) 479,210 -
Pension costs 39,907 28,051
------------------------------------------- -------------- ----------------
Total staff costs 7,662,921 5,777,517
------------------------------------------- -------------- ----------------
(b) Staff numbers (including directors): Number Number
Kitchen and floor staff 432 440
Managements staff 106 70
------------------------------------------- -------------- ----------------
Total number of staff 538 510
------------------------------------------- -------------- ----------------
(c) Directors' remuneration:
Emoluments 251,295 74,736
Money purchase (and other) pension
contributions 1,164 742
Non-Executive directors fees 28,917 25,000
------------------------------------------- -------------- ----------------
Total directors' costs 281,376 100,478
------------------------------------------- -------------- ----------------
Director's remuneration disclosed above include
the following amounts paid to the highest paid
director:
Emoluments 119,013 37,368
Money purchase (and other) pension
contributions 569 377
------------------------------------------- -------------- ----------------
Further details on Directors' emoluments and the executive
pension schemes are given in the Directors' remuneration
report.
7. Finance costs
Year ended Year ended
31 December 31 December
2016 2015 (Restated)
GBP GBP
Interest payable and similar charges:
Interest on finance leases and
hire purchase contracts 50,831 68,505
Interest on bank loans and overdraft 74,406 16,848
Other interest - 42,457
--------------------------------------- ------------- -----------------
Total finance costs for the year 125,237 127,810
--------------------------------------- ------------- -----------------
8. Taxation
The major components of income tax for the years ended 31
December 2016 and 2015 are:
(a) Analysis of charge in the year:
Year ended Year ended
31 December 31 December
2016 2015
GBP GBP
Current tax:
UK corporation tax on the (loss)/profit
for the year 13,995 273,666
Adjustments in respect of previous
years 6,086 -
Deferred tax:
Origination and reversal of temporary
differences (114,414) 44,629
Tax losses carried forward 7,450 (589)
------------------------------------------ ------------------ ---------------
Total tax (credit)/charge for
the year (86,883) 317,706
------------------------------------------ ------------------ ---------------
(b) Factors affecting the tax charge for the year:
The tax charged for the year varies from the standard
rate of corporation tax in the UK due to the following
factors:
Year ended Year ended
31 December 31 December
2016 2015
GBP GBP
(Loss)/profit on ordinary activities
before tax
Expected tax (credit)/charge based
on the standard rate of corporation
tax in the UK of 20% (2015: 20.25%)
Effects of:
Depreciation on non-qualifying (1,004,996) 1,287,513
assets (201,000) 260,721
Expenses/(income) not deductible
for tax purposes
Effect of change in corporation
tax (14,314) 48,677
Adjustments in respect of previous 132,445 17,335
tax years - (52)
Dividend income 6,086 -
Other miscellaneous items - 36
Deferred tax adjustments in respect 4,084 5,571
of prior years - (14,582)
Losses utilised in the year (14,184) -
------------------------------------------ ------------------ ---------------
Total tax (credit)/charge for
the year (86,883) 317,706
------------------------------------------ ------------------ ---------------
9. (Loss)/earnings per share
The company had 5,000 ordinary shares of GBP0.01 each and 5,000
B ordinary shares of GBP0.01 each in issue as 31 December 2015. In
June 2016, the 5,000 B ordinary shares were re-designated as
ordinary shares of GBP0.01 each and 79,990,000 new ordinary shares
of GBP0.01 each were allotted and issued to the existing
shareholders as a bonus issue of shares.
On the date of the IPO the company issued a further 16,000,000
new shares. The basic and diluted earnings per share figures, based
on the weighted average number of shares in issue during the period
ended 31 December 2016 and the actual number of shares in issue at
31 December 2015, are set out below.
Year ended Year ended
31 December 31 December
2016 2015
GBP GBP
(Loss)/profit attributable
to shareholders (918,113) 969,807
Non-trading items 3 1,183,592 -
Opening costs 3 1,401,546 348,130
Taxation (86,883) 317,706
---------------------------- ------------- -------------
Adjusted pre-tax
profit for the year 1,580,142 1,635,643
---------------------------- ------------- -------------
Adjusted EBITDA, calculated by taking the adjusted
profit before tax figure shown above and adding
back interest, depreciation and amortisation was
GBP2,684,962 (2015: GBP2,518,986).
Number Number
Weighted average
number of shares
For basic earnings
per share 54,037,158 54,037,158
Adjustment for options 1,159,276 -
outstanding
------------------------ ----------- -----------
For diluted earnings
per share 55,196,434 54,037,158
------------------------- ----------- -----------
Pence per Pence per
share share
Earnings per share:
Basic (pence)
From (loss)/profit
for the period (1.70) 1.79
From adjusted pre-tax
profit 2.92 3.03
Diluted (pence)
From (loss)/profit
for the period (1.66) 1.79
From adjusted pre-tax
profit 2.86 3.03
------------------------- ----------- -----------
The loss per share for the comparative year ended 31 December
2015 has been calculated on a comparable basis using the same
average weighted average number of ordinary shares in issue as if
the shares had been in issue during that period.
Diluted earnings per share is calculated by dividing the profit
or loss attributable to ordinary shareholders by the weighted
average number of shares and 'in the money' share options in issue.
Share options are classified as 'in the money' if their exercise
price is lower than the average share price for the period. As
required by IAS 33, this calculation assumes that the proceeds
receivable from the exercise of 'in the money' options would be
used to purchase shares in the open market in order to reduce the
number of new shares that would need to be issued.
10. Dividends
Amounts recognised as distributable to equity holders in the
period:
Year ended Year ended
31 December 31 December
2016 2015
GBP GBP
Dividend for the
year ended 31 December
2015 of GBP66.97
per share - 669,675
Dividend for the
year ending 31 December 78,375 -
2016 of GBP7.84
per share
--------------------------- ------------- -------------
Prior to the company's IPO, its Chief Executive, C Hanna, and
its Creative and Founding Director, A Kitous, were remunerated by
way of dividends in lieu of market rate salaries. Since the
company's IPO, these directors have received market rate salaries
instead of such dividends.
11. Intangible assets
Group Lease premiums Goodwill Total
GBP GBP GBP
Cost
At 1 January 2016 - - -
Additions 1,075,000 74,979 1,149,979
---------------------------- ----------------- --------- ------------
At 31 December 2016 1,075,000 74,979 1,149,979
---------------------------- ----------------- --------- ------------
Accumulated amortisation
At 1 January 2016
Amortised during the - - -
year 28,958 - 28,958
---------------------------- ----------------- --------- ------------
At 31 December 2016 28,958 - 28,958
---------------------------- ----------------- --------- ------------
Net Book Value as at
31 December 2015 - - -
---------------------------- ----------------- --------- ------------
Net Book Value as at
31 December 2016 1,046,042 74,979 1,121,021
---------------------------- ----------------- --------- ------------
Acquisition
On 14 December 2016, the Group purchased the trade and assets,
valued at GBP400,000, of Agushia Limited, including the Yalla Yalla
brand and four restaurants trading under the brand as part of the
group's strategic goal to expand its network of restaurants in
London and the rest of the United Kingdom. The goodwill reported in
the Balance Sheet arising on the acquisition of this business
amounts to GBP74,979 and represents the amounts paid in excess of
the fair value of the net assets acquired.
Goodwill arising on business combinations is not amortised but
is subject to an impairment review annually, or arising on
acquisition is monitored and an impairment test is carried out
which compares the value in use to its carrying value. The
transaction has been treated as a business combination under IFRS 3
'Business Combinations'. Details of the identifiable assets and
liabilities, purchase consideration and goodwill are set out
below:
Book value
& fair
values
GBP
Intangible assets 10,000
Fixtures and fittings 59,996
Property, plant
and equipment 342,177
Liabilities (87,152)
-----------
Total net assets
acquired 325,021
-----------
Consideration paid:
Cash 400,000
------------------------------------------ -----------
Goodwill arising
on acquisition 74,979
------------------------------------------ -----------
12. Property, plant and equipment
Group Freehold Leasehold Plant Fixture,
land Land and fittings Total
and buildings and buildings machinery & equipment (Restated)
GBP GBP GBP GBP GBP
Cost
At 1 January
2015 1,481,879 4,009,851 1,419,937 1,238,456 8,150,123
Additions - 1,646,617 998,736 366,930 3,012,283
-------------------------- --------------- --------------- ------------ -------------- -------------
At 31 December
2015 1,481,879 5,656,468 2,418,673 1,605,386 11,162,406
-------------------------- --------------- --------------- ------------ -------------- -------------
Accumulated depreciation
and impairment
At 1 January
2015
Depreciation
during the year 9,879 1,613,606 728,045 416,937 2,768,467
59,275 410,246 183,377 102,635 755,533
-------------------------- --------------- --------------- ------------ -------------- -------------
At 31 December
2015 69,154 2,023,852 911,422 519,572 3,524,000
-------------------------- --------------- --------------- ------------ -------------- -------------
Cost
At 1 January
2016 1,481,879 5,656,468 2,418,673 1,605,386 11,162,406
Additions 80,136 2,729,476 1,212,779 474,453 4,496,844
Business combination
additions - - 342,177 59,996 402,173
-------------------------- --------------- --------------- ------------ -------------- -------------
At 31 December
2016 1,562,015 8,385,944 3,973,629 2,139,835 16,061,423
-------------------------- --------------- --------------- ------------ -------------- -------------
Accumulated depreciation
and impairment
At 1 January
2016
Depreciation
during the year 69,154 2,023,852 911,422 519,572 3,524,000
Impairment during
the year 49,396 478,025 297,872 125,335 950,628
- 296,260 85,547 89,989 471,796
-------------------------- --------------- --------------- ------------ -------------- -------------
AT 31 December
2016 118,550 2,798,137 1,294,841 734,896 4,946,424
-------------------------- --------------- --------------- ------------ -------------- -------------
Net Book Value
as at
31 December 2015 1,412,725 3,632,616 1,507,251 1,085,814 7,638,406
-------------------------- --------------- --------------- ------------ -------------- -------------
Net Book Value
as at
31 December 2016 1,443,465 5,587,807 2,678,788 1,404,939 11,114,999
-------------------------- --------------- --------------- ------------ -------------- -------------
Assets held under Group
finance leases
---------------------------------
Year ended Year ended
31 December 31 December
2016 2015
GBP GBP
Cost
At 1 January 2016 1,853,942 1,853,942
Additions 80,136 -
Legal ownership
transferred (1,618,460) -
-------------------------- --------------- ----------------------------- -------------- -----------------
Cost as at 31 December
2016 315,618 1,853,942
-------------------------- --------------- ----------------------------- -------------- -----------------
Accumulated depreciation
At 1 January 2015 170,987 73,445
Depreciation during
the year 84,622 97,541
Impairment 87,600 -
Legal ownership
transferred (139,601) -
-------------------------- --------------- ----------------------------- -------------- -----------------
At the end of year 203,608 170,986
-------------------------- --------------- ----------------------------- -------------- -----------------
Net book value at
the end of the year 112,010 1,682,956
-------------------------- --------------- ----------------------------- -------------- -----------------
Legal ownership transferred relates to a property held under
finance lease that has subsequently been purchased outright during
the current year.
13. Subsidiaries
The principal subsidiaries of Comptoir Group Plc, all of which
have been included in these consolidated financial statements, are
as follows:
Name Country Proportion Non-Controlling
of incorporation of ownership interests
and principal interest Ownership/voting
place of as at 31 interest at
business December 31 December
2016 2015 2016 2015
--------------------------- ------------------- ------- ------- --------- ---------
England
& Wales
England
& Wales
England
& Wales
England
& Wales
Timerest Limited England
Chabane Limited & Wales
Comptoir Franchise England
Limited & Wales
Shawa Group Limited* England
Shawa Bluewater & Wales
Limited England
Shawa Limited & Wales
Shawa Rupert Street England
Limited* & Wales
Comptoir Stratford England
Limited* & Wales
Comptoir South England
Ken Limited* & Wales
Comptoir Soho Limited England
Comptoir Central & Wales
Production Limited England
Comptoir Westfield & Wales
London Limited* England
Levant Restaurants & Wales
Group Limited England
Comptoir Chelsea & Wales
Limited* England 100% 100% - -
Comptoir Bluewater & Wales 100% 100% - -
Limited England 100% 100% - -
Comptoir Wigmore & Wales 100% 100% - -
Limited* England 100% 100% - -
Comptoir Kingston & Wales 100% 100% - -
Limited England 100% 100% - -
Comptoir Broadgate & Wales 100% 100% - -
Limited England 100% 100% - -
Comptoir Manchester & Wales 100% 100% - -
Limited England 100% 100% - -
Comptoir Restaurants & Wales 100% 100% - -
Limited England 100% 100% - -
Comptoir Leeds & Wales 100% 100% - -
Limited* England 100% 100% - -
Comptoir Oxford & Wales 100% 100% - -
Street Limited* England 100% 100% - -
Comptoir I.P. Limited* & Wales 100% 100% - -
Comptoir Reading England 100% 100% - -
Limited* & Wales 100% 100% - -
TKCH Limited* England 100% 100% - -
Comptoir Bath Limited* & Wales 100% 100% - -
Comptoir Exeter England 100% 100% - -
Limited* & Wales 100% 100% - -
Yalla Yalla Restaurants England 100% 100% - -
Limited & Wales 100% 100% - -
Shawa Haymarket England 100% 100% - -
Ltd & Wales 100% - - -
Comptoir Oxford England 100% - - -
Limited* & Wales 100% - - -
--------------------------- ------------------- ------- ------- --------- ---------
*Dormant companies
Changes to subsidiaries during the year ended 31 December
2016:
Comptoir Bath Limited changed its name from Comptoir Wardour
Street Limited on 20 February 2016.
Comptoir Exeter Limited changed its name from Comptoir Strand
Limited on 20 February 2016.
Shawa Rupert Street Limited and Shawa Haymarket Limited were
incorporated on 30 March 2016.
Comptoir Reading Limited was incorporated on 22 February 2016.
The company changed its name from Comptoir Reading Limited to Shawa
Wardour Street on 8 August 2016 and back to Comptoir Reading
Limited on 2 September 2016.
Yalla Yalla Restaurants Limited, a subsidiary, which was
incorporated on 5 September 2016, changed its name from Shawa
Wardour Street on 30 November 2016.
14. Inventories
Group
Year ended Year ended
31 December 31 December
2016 2015
GBP GBP
Finished goods and
goods for resale 479,830 304,199
---------------------------- ------------- -------------
15. Trade and other receivables
Group
Year ended Year ended
31 December 31 December
2016 2015
GBP GBP
Trade debtors 572,691 323,235
Other debtors 499,934 677,780
Prepayments and accrued
income 1,124,690 602,619
Corporation tax recoverable - 33,506
------------------------------------------- ------------- -------------
Total trade and other
receivables 2,197,315 1,637,140
------------------------------------------- ------------- -------------
16. Trade and other payables
Group
Year ended Year ended
31 December 31 December
2016 2015
GBP GBP
Trade creditors 1,383,209 828,569
Accruals 1,546,108 569,701
Other taxation and
social security 541,314 825,772
Other creditors 87,018 636,521
Directors' loan accounts - 572,600
---------------------------------------- ------------- -------------
Total trade and other
payables 3,557,649 3,433,163
---------------------------------------- ------------- -------------
17. Borrowings
Group
Year ended Year ended
31 December 31 December
2016 2015 (Restated)
GBP
GBP
Bank loans 1,990,527 1,703,256
Bank overdrafts - 12,416
Finance lease - 1,461,043
Hire purchase liabilities 21,921 110,529
----------------------------------------- ------------- -----------------
Total borrowings 2,012,448 3,287,244
----------------------------------------- ------------- -----------------
The long term bank loans are secured by way of fixed charges
over the assets of various Group companies. Some of the bank loans
are secured by a personal guarantee given by A Kitous, director,
amounting to GBP6,925,000 across all loans. Bank loans of
GBP1,990,527, represent amounts repayable within one year of
GBP610,120 and amounts totalling GBP1,380,407 which are repayable
in more than one year but less than five years. All loans have a
five-year term with maturity dates of between 2018 and 2020. All
loans attract a rate of interest of 3.25% over the Bank base
rate.
The liability in respect of the finance lease that was entered
into in November 2014 is GBPnil for the year ended 2016. The
comparative relates to a property held under finance least that has
subsequently been purchased outright, during the current year.
Previously interest was charged at a rate of 4% plus LIBOR.
The entire hire purchase liability is due within one year.
18. Provisions for liabilities
Group
Year ended Year ended
31 December 31 December
2016 2015
GBP GBP
Provisions for leasehold
property dilapidations 35,050 27,388
-------------------------------------- ------------- -------------
Total provisions 35,050 27,388
-------------------------------------- ------------- -------------
Movements on provisions: Group
GBP
At 1 January 2016 27,388
Provision in the 7,662
year (net of releases)
-------------------------- ---- ---- ------------- -------------
Total at 31 December
2016 35,050
-------------------------------------- ------------- -------------
Provisions for leasehold property dilapidation repairs are
recognised when the Group has a present obligation to carry out
dilapidation repair work on the leasehold premises before the
property is vacated. The amount recognised as a provision is the
best estimate of the costs required to carry out the dilapidations
work and is spread over the expected period of the tenancy.
19. Deferred Taxation
Deferred tax assets and liabilities are offset where the Group
or Company has a legally enforceable right to do so. The following
is the analysis of the deferred tax balances (after offset) for
financial reporting purposes:
Group
Liabilities Liabilities Assets Assets
2016 2015 2016 2015
GBP GBP GBP GBP
Accelerated capital
allowances 287,287 171,829 44,020 (82,160)
Tax losses - - 160,978 164,733
Share-based payment - - 99,997 -
-------------- ------------ ---------- ----------
287,287 171,829 304,995 82,573
-------------- ------------ ---------- ----------
Movements in the Group Group
year: 2016 2015
GBP GBP
Net (liability)/asset
at 1 January
(Credit)/charge
to Statement of (89,256) (45,216)
Comprehensive Income
(note 8) 106,964 (44,040)
----------- -----------
Net asset/(liability)
at year end 17,708 (89,256)
----------- -----------
The deferred tax liability set out above is related to
accelerated capital allowances and will reverse over the period
that the fixed assets to which it relates are depreciated.
20. Share capital
Authorised, issued Number of 1p shares
and fully paid
----------------------------
Year ended Year ended
31 December 31 December
2016 2015
Brought forward 10,000 10,000
Issues in the period 95,990,000 -
------------------------------ ------------- -------------
Carried forward 96,000,000 10,000
------------------------------ ------------- -------------
Nominal value
----------------------------
Year ended Year ended
31 December 31 December
2016 2015
GBP GBP
100 100
Brought forward 959,900 -
Issues in the period
------------------------------ ------------- -------------
Carried forward 960,000 100
------------------------------ ------------- -------------
The company had 5,000 ordinary shares of GBP0.01 each and 5,000
B ordinary shares of GBP0.01 each in issue as 31 December 2015. In
June 2016, the 5,000 B ordinary shares were re-designated as
ordinary shares of GBP0.01 each and 79,990,000 new ordinary shares
of GBP0.01 each were allotted and issued to the existing
shareholders as a bonus issue of shares. On 21 June 2016 the
company issued 16,000,000 new shares to the public as part of the
IPO and admission of the shares to the AIM market of the London
Stock Exchange, raising GBP8 million before costs of the share
issue.
21. Other reserves
The other reserves account in the balance sheet reflects the
credit to equity made in respect of the charge for share-based
payments made through the income statement and the purchase of
shares in the market in order to satisfy the vesting of existing
and future share awards under the Long-Term Incentive Plan.
22. Retirement benefit schemes
Defined contribution 31 December 31 December
schemes 2016 2015
GBP GBP
Charge to profit
and loss 39,907 28,051
----------------------- ------------ ------------
A defined contribution scheme is operated for all qualifying
employees. The assets of the scheme are held separately from those
of the group in an independently administered fund.
23. Share-based payments scheme
Equity-settled share-based payments
On 14 June 2016 the Company established an Enterprise Management
Incentive ("EMI") share option scheme and on the same day granted
2,970,000 EMI share options to certain key employees. The scheme
enables all employees (as well as Directors) to subscribe for
ordinary shares in Comptoir Group PLC. The scheme includes all
subsidiary companies headed by Comptoir Group PLC. The exercise
price of all of the options is GBP0.50, the term to expiration is
10 years and all of the options have the same vesting conditions
attached to them.
The total share-based payment charge for the year was GBP479,210
(2015: GBPNil). This is included within non-trading items on the
face of the statement of comprehensive income.
On the same day, 14 June 2016, the Company also granted
1,440,000 unapproved share options to family members of directors,
in relation to their capacity as shareholders investing in the
company. The exercise price of these options is GBP0.50, the term
to expiration is 10 years and all of the unapproved options have
the same vesting conditions attached to them.
If options remain unexercised after a period of 10 years from
the date of grant, the options expire. Unvested options are
forfeited if the employee leaves the group before the options vest,
vested options are forfeited if the employee leaves the group
before the options are exercised.
On 21 June 2016, as a result of the company's IPO, all 2,970,000
of the EMI options in issue vested, resulting in a charge to the
income statement equal to the fair value of the options on the date
of grant. Since vesting and to the date of approval of the
financial statements none of the options had been exercised and
200,000 options cancelled.
Year ended Year ended
31 December 31 December
2016 2015
Average Average
Shares Exercise Shares Exercise
No. price No. price
GBP GBP
Options outstanding, - - - -
beginning of year
Granted 2,970,000 0.50 - -
Cancelled (200,000) 0.50 - -
---------------------- ----------- ------------- --------- -------------
Options outstanding,
end of year 2,770,000 0.50 - -
---------------------- ----------- ------------- --------- -------------
Options exercisable,
end of year 2,770,000 0.50 - -
---------------------- ----------- ------------- --------- -------------
The Black-Scholes option pricing model is used to estimate the
fair value of options granted under the group's share-based
compensation plan. The range of assumptions used and the resulting
weighted average fair value of options granted at the date of grant
for the group were as follows:
Year ended Year ended
31 December 31 December
2016 2015
Risk free rate of return 0.10% -
Expected term 10 years -
Estimated volatility 28% -
Expected dividend yield 0% -
Weighted average fair GBP0.173 -
value of options granted
--------------------------- --- ------------- -------------
Risk free interest rate
The risk free interest rate is based on the UK 2-year Gilt
yield.
Expected term
The expected term represents the maximum term that the group's
share options in relation to employees of the group are expected to
be outstanding. The expected term is based on expectations using
information available.
Estimated volatility
The estimated volatility is the amount by which the price is
expected to fluctuate during the period. The standard deviation of
share price fluctuations of similar businesses was used to quantify
the amount of estimated dispersion as there has been less than 6
months of trade for the group.
Expected dividends
Comptoir's board of directors may from time to time declare
dividends on its outstanding shares. Any determination to declare
and pay dividends will be made by Comptoir Group PLC's board of
directors and will depend upon the group's results, earnings,
capital requirements, financial condition, business prospects,
contractual restrictions and other factors deemed relevant by the
board of directors. In the event that a dividend is declared, there
is no assurance with respect to the amount, timing or frequency of
any such dividends. Based on this uncertainty and unknown
frequency, for the year ended 31 December 2016 no dividend rate was
used in the assumptions to calculate the share based compensation
expense.
24. Reconciliation of (loss)/profit to cash generated from
operations
Year ended Year ended
31 December 31 December
2016 2015
GBP GBP
(Loss)/profit for
the year
Income tax (credit)/expense
Finance costs
Depreciation
Amortisation of (918,113) 969,807
intangible assets
Impairment of assets (86,883) 317,706
Share-based payment 125,237 127,810
charge 950,628 755,533
28,958 -
Movements in working 471,796 -
capital 479,210 -
Increase in inventories
Increase in trade
and other receivables (175,631) (130,821)
Increase in trade (560,175) (536,884)
and other payables
and provisions 54,995 1,009,130
------------------------------- ------------- -------------
Cash from operations 370,022 2,512,281
------------------------------- ------------- -------------
25. Reconciliation of changes in cash to the movement in net debt
Net debt: Year ended Year ended
31 December 31 December
2016 2015
GBP GBP
At the beginning
of the year
Movements in the
year:
Repayment of loan (2,619,998) (1,103,863)
borrowings
New loans advances
Finance lease payments 613,346 527,022
Hire purchase lease (825,000) (1,000,000)
payments 1,508,978 90,000
Non-cash movements 91,710 101,723
in the year (126,653) (125,655)
Cash inflow/(outflow) 158,375 (1,109,229)
-------------------------- ------------- -------------
At the end of the
year (1,199,242) (2,619,998)
-------------------------- ------------- -------------
Represented by: At 31 Cash flow Non- cash At 31
December movements flow movements December
2014 in the in the 2015
GBP year year GBP
GBP GBP
Cash and cash equivalents 1,764,060 (1,096,813) - 667,247
Overdraft - (12,416) - (12,416)
Bank loans (1,122,147) (522,976) (58,133) (1,703,256)
Other loans (50,000) 50,000 - -
Finance leases (1,491,475) 90,000 (59,569) (1,461,044)
Hire purchase liabilities (204,301) 101,725 (7,953) (110,529)
---------------------------- -------------- ------------ ---------------- -------------
(1,103,863) (1,390,480) (125,655) (2,619,998)
---------------------------- -------------- ------------ ---------------- -------------
At 31 Cash flow Non- cash At 31
December movements flow movements December
2015 in the in the 2016
GBP year year GBP
GBP GBP
Cash and cash equivalents 667,247 145,959 - 813,206
Overdraft (12,416) 12,416 - -
Bank loans (1,703,256) (211,654) (75,617) (1,990,527)
Finance leases (1,461,044) 1,508,978 (47,934) -
Hire purchase liabilities (110,529) 91,710 (3,102) (21,921)
---------------------------- -------------- ------------ ---------------- -------------
(2,619,998) 1,547,409 (126,653) (1,199,242)
---------------------------- -------------- ------------ ---------------- -------------
26. Financial instruments
The Group finances its operations through equity and borrowings,
with the borrowing interest typically subject to 3.25% per annum
over base rate.
Management pay rigorous attention to treasury management
requirements and continue to:
-- ensure sufficient committed loan facilities are in place to
support anticipated business requirements;
-- ensure the Group's debt service will be supported by
anticipated cash flows and that covenants will be complied with;
and
-- manage interest rate exposure with a combination of floating
rate debt and interest rate swaps when deemed appropriate.
The Board closely monitors the Group's treasury strategy and the
management of treasury risk. Further details of the Group's capital
risk management can be found in the report of the Directors.
Further details on the business risk factors that are considered
to affect the Group are included in the strategic report and more
specific financial risk management (including sensitivity to
increases in interest rates) are included in the Report of the
Directors. Further details on market and economic risk and headroom
against covenants are included in the Strategic Report.
Financial assets and liabilities
Group financial assets:
31 December 31 December
2016 2015
GBP GBP
Cash and cash equivalents 813,207 667,247
Trade and other
receivables 3,243,357 1,637,140
--------------------------------- ------------ ------------
Total financial
assets 4,056,564 2,304,387
--------------------------------- ------------ ------------
Group financial 31 December 31 December
liabilities: 2016 2015
GBP GBP
Overdraft - 12,416
Trade and other payables excl.
corporation tax 3,557,649 2,860,563
Directors' loans - 572,600
Hire purchase lease debt 21,921 88,606
Finance lease debt - 1,461,043
Bank loan 610,120 437,501
------------------------------------ ------------ ------------
Short -term financial
liabilities 4,189,690 5,432,729
------------------------------------ ------------ ------------
Bank loan 1,380,407 1,265,755
Finance lease debt - 21,923
------------------------------------ ------------ ------------
Long-term financial
liabilities 1,380,407 1,287,678
------------------------------------ ------------ ------------
Total financial
liabilities 5,570,097 6,720,407
------------------------------------ ------------ ------------
*The loans held in the subsidiaries typically have the interest
rate of 3.25%p.a. over base rate.
At 31 December 2016 the Group has GBPNil of committed borrowing
facilities in excess of gross borrowings (2015: GBPNil) and GBPNil
of undrawn overdraft (2015: GBPNil).
The maturity profile of anticipated gross future cash flows,
including interest, relating to the Group's non-derivative
financial liabilities, on an undiscounted basis, are set out
below:
Hire
Trade Finance purchase
and Directors' Bank lease lease
Overdraft other loans loans debt liability
GBP payables GBP GBP GBP GBP
*
GBP
As at 31 December
2016
Within one
year - 3,557,649 - 674,484 - 22,081
Within two
to five years - - - 1,449,311 - -
After five
years - - - - - -
Less future
interest payments
- - - (133,268) - (160)
---------------------- ------------ ----------- ------------- ------------ ----------- -----------
Total - 3,557,649 - 1,990,527 - 21,921
---------------------- ------------ ----------- ------------- ------------ ----------- -----------
As at 31 December
2015
Within one
year 12,416 2,860,563 572,600 493,991 1,508,978 91,708
Within two
to five years - - - 1,336,755 - 22,083
After five
years - - - - - -
Less future
interest payments
- - - (127,490) (47,935) (3,262)
---------------------- ------------ ----------- ------------- ------------ ----------- -----------
Total 12,416 2,860,563 572,600 1,703,256 1,461,043 110,529
---------------------- ------------ ----------- ------------- ------------ ----------- -----------
*excluding corporation tax
Fair value of financial assets and liabilities
All financial assets and liabilities are accounted for at cost
and the Directors consider the carrying value to approximate their
fair value.
27. Financial risk management
The Group's and Company's financial instruments comprise
investments, cash and liquid resources, and various items, such as
trade receivables and trade payables that arise directly from its
operations. The vast majority of the Group's and Company's
financial investments are denominated in sterling.
Neither the Group nor the Company enter into derivatives or
hedging transactions. It is, and has been throughout the period
under review, the Group's and Company's policy that no trading in
financial instruments shall be undertaken.
The main risks arising from the Group's and Company's financial
instruments are credit risk, liquidity risk, foreign currency risk,
liquidity risk and investment risk. The Group does not have a
material exposure to foreign currency risk. The board reviews
policies for managing each of these risks, and they are summarised
as follows:
Credit Risk
Credit risk refers to the risk that a counterparty will default
on its contractual obligations resulting in financial losses to the
Group. Counterparties for cash balances are with large established
financial institutions. The Group is exposed to credit related
losses in the event of non-performance by the financial
institutions but does not expect them to fail to meet their
obligations.
As a retail business with trading receipts settled either by
cash or credit and debit cards, there is very limited exposure from
customer transactions. The Group is exposed to credit risk in
respect of commercial discounts receivable from suppliers but the
Directors believe adequate provision has been made in respect of
doubtful debts and there are no material amounts past due that have
not been provided against.
The carrying amount of financial assets recorded in the
financial statements, net of any allowances for losses, represents
the Group's maximum exposure to credit risk
Liquidity risk
The Group has built an appropriate mechanism to manage liquidity
risk of the short, medium and long-term funding and liquidity
management requirements. Liquidity risk is managed through the
maintenance of adequate cash reserves and bank facilities by
monitoring forecast and actual cash flows and matching the maturity
profiles of financial assets and liabilities. The Group's loan
facilities (as set out in note 17), ensure continuity of funding,
provided the Group continues to meet its covenant requirements (as
detailed in the report of the Directors).
Foreign currency risk
The Group is not materially exposed to changes in foreign
currency rates and does not use foreign exchange forward
contracts.
Interest rate risk
Exposure to interest rate movements has been controlled
historically through the use of floating rate debt to achieve a
balanced interest rate profile. The Group does not currently have
any interest rate swaps in place as the continued reduction in the
level of debt combined with current market conditions results in a
low level of exposure. The Group's exposure will continue to be
monitored and the use of interest rate swaps may be considered in
the future.
Investment risk
Investment risk includes investing in companies that may not
perform as expected. The group's investment criteria focus on the
quality of the business and the management team of the target
company, market potential and the ability of the investment to
attain the returns required within the time horizon set for the
investment. Due diligence is undertaken on each investment. The
group regularly reviews the investments in order to monitor the
level of risk and mitigate exposure where appropriate.
28. Lease commitments
Finance lease commitments
Future lease payments in respect of finance leases are due as
follows:
Minimum lease
payments
Year ended Year ended
31 December 31 December
2016 2015
GBP GBP
Within one year 22,081 1,600,686
Within two and five
years - 22,083
After five years - -
Less future interest
payments (160) (51,197)
----------------------------------- ------------- -------------
Present value of
lease obligations 21,921 1,571,572
----------------------------------- ------------- -------------
All finance lease commitments at the year end date
31 December 2016 are due to be paid within one
year.
Analysed as:
Amounts due for
settlement within
one year
Amounts due for 21,921 1,552,751
settlement after
one year - 18,821
----------------------------------- ------------- -------------
Present value of
lease obligations 21,921 1,571,572
----------------------------------- ------------- -------------
Lease commitments are in respect of rentals payable by the
company or group for certain items of plant and machinery. Leases
include purchase options at the end of lease periods and no
restrictions are placed on the use of the assets. The average lease
term is 3 years. All leases are on a fixed repayment basis and no
arrangements have been entered into for contingent lease payments.
There are no finance leases where the Group itself is the lessor.
The interest rate applied in calculating the present value of the
payments is the incremental borrowing cost of the Group in relation
to each lease, however the time value of money is considered by the
Directors to be insignificant in the context of discounting the
minimum lease payments and accordingly the present value of the
minimum lease payments is considered to be not materially different
from the absolute value. The fair value of the lease payments is
estimated as GBP21,921 (2015: GBP103,994).
Operating lease commitments
The Group has entered into a number of property leases on
standard commercial terms as lessee. There are no restrictions
imposed by the Group's operating lease arrangements, either in the
current or prior year.
At the reporting date the total future minimum rentals payable
under non-cancellable operating leases over the remaining lives of
the leases are:
31 December 31 December
2016 2015
GBP GBP
Within one year 2,247,070 1,209,422
Within two and five
years 5,637,967 3,724,313
After five years 6,125,427 3,611,945
---------------------------- ------------ ------------
Total 14,010,464 8,545,680
---------------------------- ------------ ------------
29. Prior year adjustment
Changes to the balance As previously Adjustment Adjustment As restated
sheet - Group reported at 1 January at 31
2015 December
Balances as restated GBP 2015 GBP
before IFRS transition GBP GBP
adjustments:
Non-current assets
Property, plant
& equipment 6,225,681 1,472,000 (59,275) 7,638,406
Current liabilities
Finance lease liabilities - (1,491,475) 30,431 (1,461,043)
6,225,681 (19,475) (28,844) 6,177,363
--------------------------- -------------- -------------- ----------- ------------
Capital and reserves
Retained earnings 3,184,819 (19,475) (28,844) 3,136,500
--------------------------- -------------- -------------- ----------- ------------
Changes to the profit and As previously Adjustment As restated
loss account- Group reported
GBP GBP GBP
Balances as restated before
IFRS transition adjustments:
Profit for the financial
period 998,651 (28,844) 969,807
------------------------------- -------------- ----------- ------------
In order to adjust a treatment of a lease made in prior periods
with respect to the classification of a leasehold interest in a
property held by the Group, during the current year a prior year
adjustment has been made to change the historical treatment of the
lease. Previously, the lease had been treated as an operating lease
and rental payments were recognised within the income statement of
a subsidiary entity. Following a review of the facts, the lease is
now considered to have more closely met the definitions of a
finance lease rather than that of an operating lease and as such
the carrying value of the property has been retrospectively
recognised in the accounts from the date the lease was entered
into, being September 2014. The comparative figures shown in these
accounts have been adjusted to include the leasehold investment at
its fair value of GBP1,472,000 brought forward as at 1 January 2015
and carried forward as at 31 December 2015, as well as a finance
lease liability outstanding at 31 December 2015 of GBP1,461,043.
The impact on brought forward reserves is reflected in the table
above.
30. Contingent liabilities
The Group had no contingent liabilities at 31 December 2016 or
31 December 2015.
31. Capital commitments
The Group had no capital commitments at 31 December 2016 or 31
December 2015.
32. Directors' transactions
During the year Comptoir Group PLC paid a dividend of GBP39,188
(2015: GBP352,425) to C Hanna, who is a director and shareholder of
Comptoir Group PLC.
Comptoir Group PLC paid a dividend of GBP39,188 (2015:
GBP317,250) to A Kitous, who is a director and shareholder of
Comptoir Group PLC.
Included within trade and other payables at the reporting date
is GBPNil (2015: GBP340,850) which is owed to the director, A
Kitous and GBPNil (2015: GBP231,750) which is owed to director, C
Hanna
33. Related party transactions
Remuneration in respect of key management personnel, defined as
the Directors for this purpose, is disclosed in note 6. Further
information concerning the Directors' remuneration is provided in
the Directors' remuneration report.
70,000 and 150,000 of the EMI options that were issued on the 14
June 2016 and are detailed in note 23, were granted to M Kitous,
brother of Director, A Kitous and P Hanna, son of Director, C
Hanna, respectively.
All of the unapproved share options that were issued on the 14
June 2016 and are detailed in note 23, were issued to family
members of J Kaye, a director of the company. The exercise price of
these options is GBP0.50, the term to expiration is 10 years and
all of the unapproved options have the same vesting conditions as
the approved options attached to them.
During the year, the Group paid fees of GBP10,417 (2015:
GBP25,000) to Messrs Gerald Edelman, a firm in which director R
Kleiner is a partner, in respect of part of his non-executive
director fees. Also during the year the Group paid further amounts
totalling GBP33,433 to Messrs Gerald Edelman, in respect of
accountancy and corporate finance services provided to the
Group.
34. Ultimate controlling party
The ultimate controlling party is A Kitous, one of the Group's
directors due to his ownership of 52.1% of the share capital at the
year end.
35. Subsequent events
There were no significant subsequent events which the directors
consider require disclosure within these financial statements.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR GMGMDMMLGNZZ
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April 12, 2017 02:00 ET (06:00 GMT)
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