TIDMLGRS
RNS Number : 2453S
Loungers PLC
13 July 2022
13 July 2022
Loungers plc
("Loungers" or the "Group")
Audited results for the 52 weeks ended 17 April 2022
A record year of financial and operational progress
Recently opened our 200(th) site, with ambitious roll-out plans
now expanding to 30 sites per year
Loungers, a leading operator of all day café/bar/restaurants
across the UK under the Lounge and Cosy Club brands, is pleased to
announce its audited results for the 52 weeks ended 17 April 2022
("FY22").
Finance Summary
52 weeks 52 weeks 52 weeks
ended 17 ended 18 ended 19
April 2022 April 2021 April 2020
GBP'000 GBP'000 GBP'000
Revenue 237,291 78,346 166,502
Adjusted EBITDA 53,639 13,913 28,767
Adjusted EBITDA margin (%) 22.6% 17.8% 17.3%
Adjusted EBITDA (IAS17) 42,319 3,530 18,813
Adjusted EBITDA (IAS17) margin
(%) 17.8% 4.5% 11.3%
Operating profit / (loss) 28,437 (7,728) (6,716)
Adjusted operating profit / (loss) 34,001 (3,946) 11,965
Adjusted operating profit margin
(%) 14.3% (5.0%) 7.2%
Profit / (loss) before tax 21,605 (14,722) (14,781)
Diluted earnings / (losses) per
share (p) 17.0 (10.9) (14.0)
Cash generated from operating activities 69,626 12,031 24,397
17 April 18 April 19 April
2022 2021 2020
GBP'000 GBP'000 GBP'000
Non-property net debt 1,025 34,245 34,956
Financial and Operational Highlights
-- Achieved record revenue of GBP237.3m (up 203% from FY21) and
Adjusted EBITDA of GBP53.6m (up 286% from FY21)
-- Consistent out-performance of the wider sector by more than
15% over the year, according to the Peach Tracker (the established
industry sales monitor for the UK pub, bar and restaurant
sectors)
-- A record 27 new sites opened in the year, with our 200(th) site just opened
-- Balance sheet strength significantly enhanced, with
non-property net debt reduced by GBP33.2m to GBP1.0m
-- Increased to five build teams and now have the capacity to
open around 32 new sites per year
-- Very strong operational performance facing down the
challenges of the "pingdemic", recruitment, and Omicron
-- Continuous evolution: re-working of the Cosy Club menu and
elevation of the Cosy Club proposition, ongoing kitchen investment
and completion of the kitchen management system roll-out
-- App ordering now accounts for over 40% of Lounge sales and is
leading to higher average spend and faster service
-- Further investment in the leadership team and operational
structure to ensure we can continue to deliver operational
intensity and growth
-- Continued investment in and focus on our employer proposition
Current Trading and Outlook
Since the year end our LFL sales have been +17.9% on a three
year basis, representing a 15% out-performance of the Peach
Tracker. We are delighted with how the business is trading and,
despite the well-documented macroeconomic challenges, have not yet
seen any shift in how our customers are behaving.
Whilst the short-term outlook is of course uncertain, we remain
confident in the future prospects for Loungers given the quality
and value of our all-day offering. In addition, our pipeline of new
openings is well-developed and we continue to see a wealth of
excellent opportunities to occupy prime pitches on the high street.
This, combined with our recently expanded fit-out teams, means that
we now have the capacity to roll-out over 30 sites a year and
expect to have at least 500 sites in the UK across both of our
brands in the future.
Nick Collins, Chief Executive Officer of Loungers said:
"These results demonstrate the extent to which Loungers has
thrived over the past year, achieving a record number of openings,
record underlying like for like sales growth and a record level of
profits. We are benefitting from changes in consumer behaviour,
with more people staying local, working from home, and supporting
their local community and high street. We are delighted to have
just opened our 200(th) site, and to be announcing today that we
are increasing our roll-out target for site openings to 30 for this
year.
Whilst the short-term economic outlook is challenging, we are in
an excellent position to weather the storm and to take advantage of
growth opportunities coming out of it. We have a strong balance
sheet, a very capable and highly motivated team and an affordable,
value for money all-day offer with enormous scope for further
expansion across the UK."
Analyst Presentation Webcast
An analyst presentation will be held today, Wednesday 13 July
2022, at 9:30am (BST). Participants wishing to join the webcast
should contact loungers@powerscourt-group.com to request
details.
(1) Adjusted EBITDA is calculated as operating profit before
depreciation, pre-opening costs, exceptional costs, and share-based
payment charges.
For further information please contact:
Loungers plc Via Powerscourt
Nick Collins, Chief Executive Officer
Gregor Grant, Chief Financial Officer
Houlihan Lokey UK Limited (Financial Adviser Tel: +44 (0) 20
and NOMAD) 7484 4040
Sam Fuller / Tim Richardson
Liberum Capital Limited (Joint Broker) Tel: +44 (0) 20
Andrew Godber / John Fishley 3100 2000
Peel Hunt LLP (Joint Broker) Tel: +44 (0)20 7418
Dan Webster / George Sellar 8900
Powerscourt (Financial Public Relations) Tel: +44 (0) 207
Rob Greening / Nick Hayns / Elizabeth Kittle 250 1446
Notes to Editors
Loungers operates through its two complementary brands - Lounge
and Cosy Club - in the UK hospitality sector. A Lounge is a
neighbourhood café/bar combining elements of coffee shop culture,
the British pub and dining. There are 169 Lounges nationwide.
Lounges are principally located in secondary suburban high streets
and small town centres. The sites are characterised by informal,
unique interiors with an emphasis on a warm, comfortable
atmosphere, often described as a "home from home". Cosy Clubs are
more formal bars/restaurants offering reservations and table
service but share many similarities with the Lounges in terms of
their broad, all-day offering and their focus on hospitality and
culture. Cosy Clubs are typically located in city centres and large
market towns. Interiors tend to be larger and more theatrical than
for a Lounge, and heritage buildings or first-floor spaces are
often employed to create a sense of occasion. There are 32 Cosy
Clubs nationwide.
Chairman's Statement
Overview
A record year of financial and operational progress
FY22 was a record year for Loungers, with sales of GBP237.3m,
Adjusted EBITDA of GBP53.6m (IFRS16), and 27 new sites opened. We
have come through the challenges of the Covid period with flying
colours, and we are a stronger, more resilient and indeed more
ambitious business than ever before. All in all, our performance
during the year was a truly outstanding achievement against an
extraordinarily challenging and changeable backdrop.
At the start of the financial year, we only had roughly a third
of our estate open - and even then those sites were only able to
trade outside. On 17 May 2021 the entire estate recommenced
trading, which for some of our sites was the first time that they
had been able to welcome customers since early November 2020. We
had planned meticulously to ensure that we hit the ground running
as quickly as possible, and as a result our sites were busy
straight from the off.
However, as we went into a very busy summer, the 'pingdemic',
rising Covid cases, and significant recruitment challenges caused
severe disruption to our ability to trade normally. We found
ourselves having to take extremely difficult decisions and to make
compromises about how we operated. Throughout this time, the
commitment, professionalism and dedication of our teams never
wavered, and it was humbling to witness the way in which they
helped to navigate the business through the unprecedented
challenges of that summer.
As we went into autumn, a certain amount of stability returned
and we regrouped with a sense of optimism that the pandemic and its
consequences might finally be behind us. However, we could already
see then the warning signs of economic trouble ahead as inflation
started to soar, and we began to plan accordingly.
As it transpired, Covid was far from over and the Omicron
variant wreaked havoc throughout the Christmas season, which is of
course a critically important time for the hospitality sector.
Whilst sales at Lounge held up well during December, we saw
widespread Christmas party cancellations at our 31 Cosy Clubs.
Although some of those parties rebooked with us in the new year, it
clearly wasn't enough to compensate for the momentum that was lost
in December. We are hopeful that, given the pent-up consumer demand
after two years of lost Christmas party celebrations, December 2022
should be a bumper month.
As we entered 2022, we found ourselves up against a new set of
challenges, and the short-term outlook is looking exceptionally
uncertain for many businesses. However, in the case of Loungers,
our consistent outperformance relative to the wider hospitality
sector is evidence of a team and a business that knows how to
deliver on its strategic objectives whilst having to deal with all
manner of challenges and distractions. Our performance in FY22 is
clear evidence of that ability, and I see absolutely no reason why
this will be any different in FY23 and beyond - especially as we
have emerged from Covid as a more resilient, agile and adaptive
business than ever before.
Looking ahead
Further challenges on the horizon, but well placed to take
advantage given previous experience of trading successfully through
a downturn
The next few months will undoubtedly be challenging, albeit at
the time of writing we are not seeing much in our trading
performance to suggest that there has been any change to consumer
sentiment.
However, we have been planning for these headwinds for months
now and I believe we are not only positioned to weather a
significant decline in consumer spending - or even a recession -
but that we can actually take advantage of the circumstances.
The reason for this confidence is that as a business we have
experience of dealing with a seismic economic shock before, having
traded successfully through the 2008 financial crisis. In 2005/06
the economy was buoyant and consumer spending was elastic, which
was exploited by the sector, and specifically by casual dining
operators who confidently increased their prices. As a small
management team at the time, we took the view then that we should
minimise any price increases and hold on to our value for money
credentials. We resisted making short-term gains in exchange for
being fully prepared should a recession happen. Ultimately this
approach paid dividends, and when recession hit in the autumn of
2008 we didn't need to alter our proposition or change our pricing
as the consumer recognised that we already offered great value for
money.
By contrast, many of our peers found they had driven price
increases too strongly and resorted to discounting in a desperate
attempt to drive volume, which ultimately ended up undermining
their offer for years afterwards.
By early 2009 we were confident that we would not only continue
to trade well - and ahead of our peers - but also that we should
continue to accelerate our rate of growth. As our peers retrenched
we expanded, taking advantage of an uncompetitive landscape for new
sites and attracting talent to a business that was recognised to be
winning. In September 2008 we had nine sites and by the end of 2011
we had 20 sites, with a further nine new sites planned for 2012. We
were brave, ambitious, creative, and believed that we could build
something special, and these same attributes have never been more
alive in the business as they are today.
In my view, there are similar trends at play as we sit here 14
years on. Following the end of the third lockdown in 2021 we have
seen prices in the hospitality sector surge. While some of these
increases have been driven by a degree of necessity as supplier
prices increased, some have also been driven by businesses trying
to make up for months of lockdown. We have had to increase our
prices in a targeted way, but by nowhere near as much as our peers.
We have deliberately held back from doing so because we remember
our experience in 2008 and how offering great value for money in an
environment where the consumer is squeezed puts you at a distinct
advantage. We are also extremely well placed to meet the challenges
of incoming cost pressures to the business, as detailed in the CEO
report.
We have just opened our 200(th) site - a Cosy Club in Chester -
and on 27 August the business will celebrate 20 years since we
opened our first tiny 10-table café/bar called Lounge on North
Street in Bedminster, Bristol. After two decades of sustained
growth, we now employ over 6,000 people and we have a remarkably
talented team lead by CEO Nick Collins and supported by a really
engaged Board. Despite the near-term challenges, we remain hugely
optimistic and ambitious for the future - particularly as it
genuinely feels as if we are still just getting started.
Alex Reilley
Chairman
13 July 2022
Chief Executive's Statement
Introduction
I am pleased to report on a very successful year for Loungers.
One in which we, on the whole, had the opportunity to put Covid
behind us and begin to truly demonstrate the strength of the
Loungers offer, the quality of both our brands, and the expertise
of our people. To pick just a few highlights from what was a record
year, we:
-- Delivered a sector leading three year LFL sales performance
of 22.1% (including VAT benefit)
-- Opened a record 27 new sites
-- Reduced net debt (excluding IFRS16 lease liabilities) to GBP1.03m
-- Delivered IFRS16 Adjusted EBITDA of GBP53.6m, a record for the business
Whilst we continue to face a number of well-publicised
headwinds, Loungers is uniquely well-placed within the leisure
sector to thrive through a period of economic uncertainty and
emerge stronger on the other side. Our key strengths include:
-- Broad appeal across all parts of the day
-- Value for money offer benefits from trading down
-- Community driven offer benefitting from working from home and staying local
-- Scale purchasing opportunities and operational gearing mitigating margin pressure
-- Excellent property opportunities driving roll-out
-- Self-financing roll-out
-- Best in class management team, and outstanding talent across the entire business
Record sales performance
Throughout the year the business consistently out-performed the
sector by in excess of 15%, delivering robust like for like sales
growth in both our Lounge and Cosy Club brands. This
out-performance shouldn't be a surprise - Loungers has consistently
out-performed the market for more than seven years. The table below
shows our LFL sales performance for the 48 weeks from full
re-opening on 17 May 2021 to 17 April 2022 on both a net (including
the benefit of the VAT reduction) and gross (excluding the one-off
benefit of the VAT reduction) basis.
Three year LFL
48 weeks to
17 April 2022
Net - including VAT
benefit +22.1%
Gross - excluding VAT
benefit +14.2%
The reasons for this out-performance are simple, we are serving
more customers than we were pre-Covid and our customers are on
average spending more. This isn't a post-Covid blip; it is the
product of our relentless focus on our strategic priorities,
combined with shifts in consumer behaviour.
-- We continue to innovate and evolve our food and drink menus,
with our focus on value for money remaining at the forefront of our
thinking.
-- We continue to benefit from our focus on hospitality,
atmosphere and community at a time when other operators are finding
it more difficult to maintain standards in the face of recruitment
difficulties.
-- We continue to benefit from an increase in average spend as a
result of the introduction of our order at table app, which now
accounts for 40% of all Lounge sales.
-- We are serving our customers more quickly and more
consistently as a result of our focus on kitchen systems, processes
and training, and
-- We are benefitting from changes in consumer behaviour, with
more people staying local, working from home, and supporting their
local community and local high street.
While there is little doubt we are entering into a period in
which consumer discretionary spending will come under pressure we
remain confident that we are well-placed to continue to grow our
sales within this environment:
-- We remain excellent value for money. Over the past 12 months
we have taken considerably less price than the sector in general as
we recognise value is a key differentiator.
-- We have a broad, all-day offer in both Lounge and Cosy Club,
with customers enjoying both venues for a variety of occasions
across the day and evening. We are not overly reliant on any
specific day-part or celebration spend.
-- We know from the 2008 recession that we benefit from people
being more discerning about their leisure spend, and people staying
local.
Scale and operational flexibility
Along with the rest of the sector, we are experiencing
significant input cost inflation. We aren't immune to this
pressure, but we believe we are better placed than most to mitigate
it.
Our continued growth means we are attractive to suppliers and
can benefit from increasing scale. During FY23 we will tender some
of our food purchasing as we seek to consolidate our supply chain
and take logistics costs out of the business. This is an ongoing
process as we move over the medium-term towards a fully
consolidated model. In addition, our food development teams
continue to evolve the menu in the face of ingredient shortages and
price increases. We don't have a reliance on any single cuisine, we
can sell whatever we want, and this allows us to move with trends
and be very fleet of foot. We have significant expertise in both
food and drink development and can engineer our menus away from
ingredients that have seen short-term cost increases and use
stretch to protect our margin whilst maintaining value for money.
Added to this, we continue to see the benefit from our investment
in our 'kitchen Resets' and the margin upside from increased
uniformity across the estate.
Our utility costs were hedged in May 2020 until September 2024,
giving us protection from price rises in the medium term. Elsewhere
on the P&L we expect to benefit from operational gearing as our
central costs are spread over an increasing number of sites.
Loungers has a fantastic track record of delivering consistent
like for like sales growth across the whole estate, in both older
and newer sites. We have achieved this via an unwavering focus on
the customer, our product and our hospitality. This will remain
unchanged in FY23, and I anticipate that any resulting margin
impacts will be modest, short-term and compensated for by our sales
performance.
Investing in our team
It has been an important year in the evolution of our People
strategy. Covid and the various lockdowns (and to a lesser degree
Brexit) have resulted in a shift in attitudes towards working in
hospitality. As a result of this Loungers, along with the rest of
the hospitality sector, had to re-evaluate both our role as an
employer and how we make ourselves more attractive as an employer,
in particular to the younger generations. During the year it became
apparent that there was a real recruitment and retention challenge
in our sector, varying in impact across England and Wales. It
rarely impacted our ability to trade at full capacity, and it did
not impact our roll-out and the opening of new sites.
During the year we launched 'the Commitments' setting out very
publicly to our team (and prospective employees) the values that we
want to represent as an employer. Included within these were
commitments to (i) respect everyone's time off, (ii) to pay fairly,
(iii) to rota fairly, (iv) to focus on everyone's development and
progression and (v) to ensure everyone is made welcome. These
weren't new values to Loungers, but we wanted to make sure everyone
in the business knew what we stood for and to be held to account.
There are no easy wins here - the sense we get from our team is
that it is not about pay. It is about flexibility, working hours,
team environment, progression and development, fairness and
respect. By setting out our values, we want our team to hold us to
account, which will allow us to become an even better employer.
Towards the end of the year we significantly restructured the
operations team within the Lounge business. With the continued
growth of the business, this is necessary every two to four years.
The restructure saw us add one Operations Director, two Regional
Operations Managers and five Operations Managers/Chefs. It also saw
us reduce the 'site to ops team ratio' at every level. At the
Operations Managers/Chefs level we now have a ratio of 5:1, which
is unprecedented in our sector. This consistently low ratio has
allowed for our intensity of operation and our focus on detail.
Pleasingly all of the new roles were filled with internal promotion
candidates. We continue to lead the way in providing outstanding
career progression opportunities within our sector.
New site openings and roll-out
During the year we opened 27 sites, a record number of new
openings, and after an enforced pause due to Covid, our roll-out
programme is very much back on track. We are opening
high-performing sites, achieving above average levels of sales and
EBITDA. This reflects the market for new sites and we continue to
see really strong opportunities for prime pitch Lounges and Cosy
Clubs in target high street locations where we know we will trade
well. The year saw a bias towards Lounge openings - of which there
were 26 vs one Cosy Club - which is a reflection of how Lounges can
thrive in different location types. Highlights include openings
in:
-- Smaller towns such as Matlock (Ostello Lounge) and Pontypridd (Gatto Lounge)
-- Larger towns such as Basildon (Orleto Lounge) and Shrewsbury (Floro Lounge)
-- Greater London locations such as Ealing (Castano Lounge)
-- Retail centres such as Fosse Park in Leicester (Volpo Lounge)
-- Coastal locations benefiting from staycations such as
Aberystwyth (Athro Lounge) and Bognor Regis (Bonito Lounge)
The pipeline is well-developed and we continue to see a wealth
of excellent opportunities, whilst maintaining our sector-leading
sub 6% rent to revenue ratio. It remains the case that we typically
convert former retail units or bank units, occupying prime pitches
on the high street. As a result of our confidence in both our
operational performance in opening sites and the range of
opportunities we are seeing, we have decided to increase the rate
of roll-out. We have recently been opening at a rate of around 25
sites per year, using four in-house site fit-out teams. In the
coming weeks we will be increasing to five fit-out teams and this
will give us annual capacity of around 32 sites a year. For this
year (FY23) we expect to open around 30 sites given the mid-year
introduction of the additional team. We continue to have real
confidence over the potential scale of the business, with the
capacity to open at least 500 sites across both brands in the
UK.
In the current year we anticipate opening at least four Cosy
Clubs (including Chester, Milton Keynes, Harrogate and Canterbury).
Operating in city centres and larger market towns, there are fewer
Cosy Club opportunities overall than Lounge and as a result, the
number of Cosy Club openings each year can vary. The Cosy Clubs
continue to go from strength to strength and this year is an
opportune time to have several openings to capitalise on the
momentum within the brand. We are particularly pleased with the
impact of the Project Finesse roll-out, which incorporated a more
elevated menu and guest experience alongside more sophisticated
design and furniture that is more fitting for the Cosy Club
surroundings.
Innovation and evolution
The most significant change during the year was the re-working
of the Cosy Club food menu. We saw the opportunity to elevate the
proposition and take even greater pride in the offer. The new menu
launched across the business last autumn, and saw the introduction
of small plates on the menu, wider stretch with more expensive
dishes at one end whilst retaining our value for money at the
other. The menu launch was accompanied by an overhaul of our steps
of service and an investment in our furniture which has altogether
really pushed the brand on. We are delighted with the impact this
is having across the Cosy Club estate.
Right at the end of the year we saw a considerable menu change
in Lounge with some 40% of the dishes either being replaced or
improved.
Our investment in the kitchens continues, with the final 60
Lounges now being improved via our Reset programme, benefitting
from the new equipment and standardised layouts.
We have also more formally defined our ESG strategy. I believe
it is important that this is driven by our teams rather than purely
in the boardroom and as such it is based around four core
pillars:
1. Looking after our teams well and being an inclusive employer
2. Bringing joy to local places across the country
3. Delivering our hospitality sustainably
4. Being proud of what we put on the plate
We already achieve a great deal within these categories, but
importantly have identified areas where we can improve and are
building a framework to allow us to deliver.
Management team
We remain very focused in evolving and building the strongest
management team in the sector to facilitate the successful roll-out
of our brands. During the year Tom Trenchard, Property Director,
took over responsibility for the construction side of the business,
joining together the site acquisitions and build businesses under
one leader. I am also delighted to announce the appointment of Guy
Youll as Chief People Officer. Guy joins the business in the autumn
and will lead the people side of the business and build on the
important work we have done this year. We continue to focus a great
deal on developing our employees' careers and there continue to be
many positive internal success stories as we grow.
Nick Collins
Chief Executive Officer
13 July 2022
Financial Review
Overview
The year to 17 April 2022 represents the first year in our three
years as a public company where we have ended the year with all our
sites open, trading, and free of Covid restrictions. Indeed, if we
exclude the first four weeks of the year where we could trade
external areas only, and excepting the impact of Omicron on our
Christmas trading, then the past year has very much seen a return
to normality.
The financial highlights below demonstrate the underlying
resilience and relevance of the Loungers business, and the positive
benefits of that return to normality.
IFRS 16
Year ended Year ended
17 April 18 April
2022 2021
GBP000 GBP000
Revenue 237,291 78,346
Operating profit / (loss) 28,437 (7,728)
Operating margin (%) 12.0% (9.9%)
Profit / (loss) before tax 21,605 (14,722)
Fully diluted earnings /
(losses) per share (p) 17.0 (10.9)
Net cash generated from operating
activities 69,626 12,031
Net debt 120,627 144,823
Year on year revenue was up by GBP158.9m to a record GBP237.3m.
Whilst Covid restrictions meant our sites could only trade in 34%
of the available weeks in the comparative year, strong like for
like ("LFL") sales growth and the strength of our new site openings
also played a significant role in delivering the year on year sales
uplift. Accompanying the sales growth, operating profit increased
to GBP28.4m from an operating loss of GBP7.7m in the prior year,
with operating margins growing to 12.0%. We continued to benefit
from various government support measures during the year (notably
the VAT reduction) and they played a part in delivering our strong
operating margin performance.
The strong trading and profit performance, allied to the
recovery in the Group's negative working capital position that the
resumption of full trading allowed, resulted in net cash generated
from operations of GBP69.6m. Post investing and financing outflows
net cash balances increased by GBP26.3m and were instrumental in
the reduction in net debt of GBP24.2m.
Throughout this document we use a range of financial and
non-financial measures to assess our performance. A number of the
financial measures, for example Like for Like ("LFL") sales and
Adjusted EBITDA are not defined under IFRS and accordingly they are
termed Alternative Performance Measures ("APMs"). The Group
believes that these APMs provide stakeholders with additional
useful information on the underlying trends, performance and
position of the Group and are consistent with how business
performance is measured internally. Adjusted EBITDA is also the
measure used by the Group's banks for the purposes of assessing
covenant compliance.
The table below summarises the key APM's under both IFRS16 and
IAS17 and covers the past three financial years. The negative
impact of Covid restrictions and the positive impact of government
support continues to make comparisons difficult. The year ended 19
April 2020 is arguably a more sensible comparator in that its
broadly five weeks of total lockdown and two weeks of Covid impact
is not wholly dissimilar to the four weeks of limited external
trading and the Omicron impacted December 2021 that was suffered in
the year to 17 April 2022.
Year ended Year ended Year ended
17 April 18 April 19 April
2022 2021 2020
GBP000 GBP000 GBP000
Sites at year end 195 168 165
New sites opened 27 3 21
Revenue 237,291 78,346 166,502
Adjusted EBITDA - IFRS16 53,639 13,913 28,767
Adjusted EBITDA margin (%)
- IFRS16 22.6% 17.8% 17.3%
Adjusted EBITDA - IAS17 42,319 3,530 18,813
Adjusted EBITDA margin (%)
- IAS17 17.8% 4.5% 11.3%
Net debt - IAS17 1,025 34,245 34,956
Revenue of GBP237.3m compares to GBP166.5m in the year to 19
April 2020 and reflects the positive impacts of strong LFL sales
performance, a record 27 new sites opened during the financial
year, and the reduced VAT rates on food and non-alcoholic drinks
that ran to 31 March 2022, and delivered a benefit of GBP15.1m. The
Group has delivered consistently strong LFL sales, whether measured
on a two year (40 weeks where trading not impacted by lockdown in
the current or comparative year) or three year basis (48 weeks
where trading not impacted by lockdown in the current year) and
whether including or excluding the benefit of the VAT
reduction:
Two year LFL Three year LFL
40 weeks to 48 weeks to
20 February 2022 17 April 2022
Net - including VAT
benefit +17.7% +22.1%
Gross - excluding VAT
benefit +9.3% +14.2%
Adjusted EBITDA (IAS17) of GBP42.3m compares to GBP18.8m in the
year to 19 April 2020, with a corresponding increase in Adjusted
EBITDA margin from 11.3% to 17.8%. The reduction in the VAT rate on
food and non-alcoholic drink was the most substantial part of that
margin expansion, contributing 5.6% to the margin growth of
6.5%.
Non-property net debt reduced to GBP1.0m, a year on year
reduction of GBP33.2m. This reflects not only the strong trading
and EBITDA performance but also the rebuilding of the Group's
negative working capital position.
Impact of UK Government Support Initiatives
In addition to the VAT reduction referenced above the Group
benefited over the year from the continuation of a number of UK
Government initiatives introduced to mitigate the impact of
Covid-19, notably:
-- The Coronavirus Job Retention Scheme ("CJRS") - The Group
continued to benefit from the CJRS through to the ending of the
scheme on 30 September 2021. During the year under review the Group
received a total of GBP4.1m of funding under the CJRS. A total of
GBP2.1m was recognised in the statement of comprehensive income in
the year, offsetting site payroll costs on the cost of sales line
and head office payroll costs on the administrative expenses line.
Cash receipts included GBP2.0m that was recognised in the FY21
results.
-- Business Rates Relief - The Group's sites have benefitted
from the business rates holiday that ran to 30 June 2021, and
subsequently from the 66% reduction (capped at GBP2.0m) that ran to
31 March 2022. During the year to 17 April 2022 the Group has
benefitted by GBP3.3m.
-- Support Grant Funding - In the year under review the Group
has recognised GBP2.5m of grant funding received under the Restart
Grant scheme. This income has been recognised under other
income.
The Corporate Insolvency and Governance Bill provided a range of
protections for tenants and allowed the Group to continue to work
collaboratively with all of its landlords, seeking to reach
agreement over an equitable share of the pain of lockdowns and
trading restrictions. The Group has recognised GBP0.8m in the year
in respect of rent waivers.
Long Term Employee Incentives
The focus on employee engagement and retention has been
unstinting throughout the year, and share awards continue to play a
significant role in these efforts. During the year the Group
granted further share awards under the employee share plan (574,000
shares) and the senior management restricted share plan (435,334
shares). These awards were made to a total of 1,206 employees who
work across the business, predominantly at site level, and in
hourly paid and salaried positions. In addition, awards covering
673 employees and in respect of 338,664 shares vested in the
year.
The Group recognised a share based payment charge in the year of
GBP3.2m (2021: GBP2.0m), the charge covering the employee share
plan, the senior management restricted share plan and the value
creation plan.
Finance Costs and Net Debt
Finance costs of GBP6.9m (2021: GBP7.0m) include IFRS 16 lease
liability finance costs of GBP5.7m (2021: GBP5.6m) and bank
interest payable of GBP1.2m (2021: GBP1.4m).
Net debt at the year end including property leases of GBP120.6m
(2021: GBP144.8m) represented a significant decrease over the prior
year, with strong trading and profitability, allied to the
rebuilding of the Group's negative working capital position,
offsetting the impact of adding new lease liabilities of
GBP16.4m.
The Group's capital structure includes a GBP32.5m term loan due
for repayment in July 2024. The Group entered into an interest rate
hedge to fix SONIA at 0.7% until July 2022. Whilst the Group's
significant positive cash balances provide an element of natural
interest rate hedge the Board continues to consider the options for
hedging the interest rate risk on the outstanding term loan.
In April 2020 the Group entered into an incremental GBP15m RCF
facility to provide additional liquidity should it be required
during the Covid lockdowns. It is envisaged that this facility,
which has never been drawn upon, will be allowed to expire at its
term date in October 2022.
Taxation
The Group has reported a tax charge of GBP3.7m for the year to
17 April 2022 (2021: credit of GBP3.6m) and at year end carried a
corporation tax receivable of GBP0.1m (2021: GBPnil payable or
receivable) and a deferred tax asset of GBP1.4m (2021: GBP3.8m).
The corporation tax payable in respect of the year of GBP1.3m
benefits from the introduction of the 130% capital allowance super
deduction. During the year corporation tax payments on account of
GBP1.4m were made.
Cash Flow and Capital Expenditure
Net cash generated from operating activities of GBP69.6m (2021:
GBP12.0m) reflects a working capital cash inflow of GBP19.7m (2021:
cash outflow of GBP1.3m). The working capital cash inflow has been
achieved in spite of a significant reduction in deferred Covid
liabilities. At year end the Group had settled all bar GBP1.4m of
its deferred Covid liabilities in respect of outstanding rents and
all of its HMRC liabilities (2021: GBP12.9m outstanding).
Cash outflows in the year in respect of capital expenditure
totalled GBP22.8m (2021: GBP7.8m) and compare to the cost of fixed
asset additions (excluding right of use assets) recognised in the
year of GBP26.2m. The lower cash outflow reflects the rebuild of
capital expenditure creditors as the new site opening programme
returned to its pre Covid pace during the year. Capital expenditure
in the year of GBP26.2m (2021: GBP5.1m) included GBP19.6m (2021:
GBP2.8m) in respect of new site openings.
Key Performance Indicators ("KPI's")
The KPI's, both financial and non-financial, that the Board
reviews on a regular basis in order to measure the progress of the
Group are as follows:
Year ended Year ended Year ended
17 April 18 April 19 April
2022 2021 2020
GBP000 GBP000 GBP000
Growth Growth / Growth
(decline)
New site openings 27 3 21
Capital expenditure (IAS GBP26.2m GBP5.1m GBP22.8m
16 PPE excluding IFRS
RoU assets)
LFL sales growth (excluding
lockdown periods) +22.1%(1) +13.3% +4.4%
Total sales growth 302.9% (52.9%) 8.8%
Adjusted EBITDA margin
(IFRS 16) 22.6% 17.8% 17.3%
(1) Three year LFL calculated over 48 weeks from 17 May 2021 and
including VAT benefit
Going Concern
In concluding that it is appropriate to prepare the financial
statements for the year to 17 April 2022 on the going concern basis
attention has been paid both to the potential impact of further
Covid-19 outbreaks on the Group and also to the current sector
headwinds in terms of consumer confidence and inflationary
pressures.
The Group has very successfully navigated the Covid-19
challenges of the past two years and has emerged with a
significantly strengthened balance sheet, with IAS17 net debt
reduced to GBP1.0m at 17 April 2022 and total liquidity, excluding
the incremental GBP15m RCF which is assumed to expire in October
2022, of GBP41.3m.
In order to assess the Group's going concern position the Board
has considered three downside scenarios of the Group's business
plan.
- The first scenario assumes a re-emergence of Covid-19 in
similar fashion to the Omicron outbreak of 2021. A sales decline of
20% relative to the FY23 budget for 12 weeks across December 2022,
January and February 2023 has been modelled. This is significantly
worse than the impact felt from the 2021 Omicron variant.
- The second scenario looks to model a weakening in consumer
confidence, commencing in July 2022 and accelerating in October
2022 with sales between 5% and 10% below budget, allied to
continuing cost of goods sold and labour inflation reducing gross
margins by 1%.
- The third scenario combines both the above scenarios,
resulting, for example, in sales being 30% below budget across
December 2022 to February 2023.
The impact of reflecting the third scenario is to reduce
expectations of Adjusted EBITDA by approximately 54% for FY23
relative to the Group's budget. Under this scenario the Group is
forecast to remain comfortably within its borrowing facilities and
to be in compliance with its covenant obligations, and accordingly
the Directors have concluded that it is appropriate to prepare the
financial statements for the year ending 17 April 2022 on the going
concern basis.
Gregor Grant
Chief Financial Officer
13 July 2022
Consolidated Statement of Comprehensive Income
For the 52 Weeks Ended 17 April 2022
Year ended Year ended
Note 17 April 18 April
2022 2021
GBP000 GBP000
Revenue 237,291 78,346
Cost of sales (134,369) (46,178)
Gross profit 102,922 32,168
Gross profit before exceptional items 102,922 32,609
Exceptional items included in cost
of sales 6 - (441)
---------------------------------------------- ----- ----------- -----------
Administrative expenses (76,975) (43,950)
Other income 4 2,490 4,054
Operating profit / (loss) 4 28,437 (7,728)
Operating profit / (loss) before exceptional
items 28,437 (6,401)
Exceptional items included in cost
of sales 6 - (441)
Exceptional items included in administrative
expenses 6 - (886)
---------------------------------------------- ----- ----------- -----------
Finance income 44 46
Finance costs 5 (6,876) (7,040)
Profit / (loss) before taxation 21,605 (14,722)
Tax (charge) / credit on profit /
(loss) 7 (3,727) 3,580
Profit / (loss) for the year 17,878 (11,142)
=========== ===========
Other comprehensive income:
Items that may be reclassified to
profit or loss
Cash flow hedge - change in value
of hedging instrument 269 101
Other comprehensive income for the
year 269 101
Total comprehensive income / (expense)
for the year 18,147 (11,041)
=========== ===========
Earnings / (losses) per share Year ended Year ended
Note 17 April 18 April
2022 2021
Pence Pence
Basic earnings / (losses) per share 8 17.4 (10.9)
Diluted earnings / (losses) per share 8 17.0 (10.9)
Consolidated Statement of Financial Position
As at 17 April 2022
Note At 17 April At 18 April
2022 2021
GBP000 GBP000
Assets
Non-current
Intangible assets 113,227 113,227
Property, plant and equipment 9 188,363 165,443
Deferred tax assets 1,355 3,816
Finance lease receivable 579 668
------------ ------------
Total non-current assets 303,524 283,154
Current
Inventories 1,919 774
Trade and other receivables 5,466 2,619
Derivative financial instruments 38 -
Cash and cash equivalents 31,250 4,912
------------ ------------
Total current assets 38,673 8,305
Total assets 342,197 291,459
============ ============
Liabilities
Current liabilities
Trade and other payables (56,214) (28,576)
Lease liabilities (8,475) (6,921)
Derivative financial instruments - (231)
------------ ------------
Total current liabilities (64,689) (35,728)
Non-current liabilities
Borrowings 10 (32,275) (39,157)
Lease liabilities (111,127) (103,657)
Total liabilities (208,091) (178,542)
============ ============
Net assets 134,106 112,917
============ ============
Called up share capital 1,127 1,124
Share premium 8,066 8,066
Hedge reserve 38 (231)
Other reserve 14,278 14,278
Retained earnings 110,597 89,680
------------ ------------
Total equity 134,106 112,917
============ ============
Consolidated Statement of Changes in Equity
For the 52 Weeks Ended 17 April 2022
(Accumulated
Called losses)
up share Share Hedge Other / retained Total
capital premium reserve reserve earnings equity
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
At 19 April 2020 1,025 - (332) 14,278 99,011 113,982
Ordinary shares issued 99 8,066 - - (6) 8,159
Share based payment charge - - - - 1,817 1,817
Total transactions with
owners 99 8,066 - - 1,811 9,976
Loss for the year - - - - (11,142) (11,142)
Other comprehensive income - - 101 - - 101
Total comprehensive expense
for the 52 week year - - 101 - (11,142) (11,041)
At 18 April 2021 1,124 8,066 (231) 14,278 89,680 112,917
---------- --------- --------- --------- ------------- ---------
Ordinary shares issued 3 - - - (3) -
Share based payment charge - - - - 3,042 3,042
---------- --------- --------- --------- ------------- ---------
Total transactions with
owners 3 - - - 3,039 3,042
Profit for the year - - - - 17,878 17,878
Other comprehensive income - - 269 - - 269
Total comprehensive income
for the 52 week year - - 269 - 17,878 18,147
At 17 April 2022 1,127 8,066 38 14,278 110,597 134,106
========== ========= ========= ========= ============= =========
Consolidated Statement of Cash Flows
For the 52 Weeks Ended 17 April 2022
Year ended Year ended
17 April 18 April
2022 2021
GBP000 GBP000
Cash flows from operating activities
Profit / (loss) before tax 21,605 (14,722)
Adjustments for:
Depreciation of property, plant and
equipment 11,187 10,288
Depreciation of right of use assets 8,451 7,567
Share based payment transactions 3,220 2,034
Loss on disposal of tangible assets - 4
Finance income (44) (46)
Finance costs 6,876 7,040
Changes in inventories (1,146) 41
Changes in trade and other receivables (2,698) 3,108
Changes in trade and other payables 23,593 (4,414)
----------- -----------
Cash generated from operations 71,044 10,900
Tax (paid) / reclaimed (1,418) 1,131
Net cash generated from operating
activities 69,626 12,031
Cash flows from investing activities
Purchase of property, plant and equipment (22,837) (7,808)
Net cash used in investing activities (22,837) (7,808)
=========== ===========
Cash flows from financing activities
Issue of ordinary shares - 8,158
Shares issued on exercise of employee
share awards (135) (79)
Bank loans repaid (7,000) -
Interest paid (1,101) (1,260)
Interest received 3 -
Principal element of lease payments (6,903) (5,303)
Interest paid on lease liabilities (5,315) (4,910)
Net cash used in financing activities (20,451) (3,394)
=========== ===========
Net increase in cash and cash equivalents 26,338 829
Cash and cash equivalents at beginning
of the year 4,912 4,083
Cash and cash equivalents at end
of the year 31,250 4,912
=========== ===========
NOTES TO THE PRELIMINARY FINANCIAL INFORMATION
1. General information
Loungers plc ("the company") and its subsidiaries ("the Group")
operate café bars and café restaurants through two complementary
brands, Lounge and Cosy Club.
The Company is a public company limited by shares whose shares
are publicly traded on the Alternative Investment Market ("AIM") of
the London Stock Exchange and is incorporated and domiciled in the
United Kingdom and registered in England and Wales.
The registered address of the Company is 26 Baldwin Street,
Bristol, United Kingdom, BS1 1SE.
2. Basis of preparation
The consolidated financial statements of the Loungers plc Group
have been prepared in accordance with UK adopted International
Accounting Standards and with the requirements of the Companies Act
2006 as applicable to companies reporting under those
standards.
The financial statements have been prepared under the historical
cost convention, as modified by the revaluation of financial assets
and liabilities (including derivatives) at fair value through
profit and loss. The financial statements are presented in
thousands of pounds sterling ('GBP000') except where otherwise
indicated.
The accounting policies adopted in the preparation of the
Financial Statements are consistent with those applied in the
preparation of the financial statements of the Group for the year
ended 18 April 2021.
The auditors' reports on the accounts for the 52 weeks ended 17
April 2022 and 18 April 2021 for Loungers plc were unqualified, did
not draw attention to any matters by way of emphasis, and did not
contain a statement under section 498(2) or 498(3) of the Companies
Act 2006.
The financial statements for Loungers plc for the year to 17
April 2022 will be delivered to the Registrar of Companies shortly.
The financial information contained within this preliminary
announcement for the periods ended 17 April 2022 and 18 April 2021
does not comprise the statutory financial statements of Loungers
plc.
In concluding that it is appropriate to prepare the financial
statements for the year to 17 April 2022 on the going concern basis
attention has been paid both to the potential impact of further
Covid-19 outbreaks on the Group and also to the current sector
headwinds in terms of consumer confidence and inflationary
pressures.
The Group has very successfully navigated the Covid-19
challenges of the past two years and has emerged with a
significantly strengthened balance sheet, with IAS17 net debt
reduced to GBP1.0m at 17 April 2022 and total liquidity, excluding
the incremental GBP15m RCF which is assumed to expire in October
2022, of GBP41.3m.
In order to assess the Group's going concern position the Board
have considered three downside scenarios of the Group's business
plan.
- The first scenario assumes a re-emergence of Covid-19 in
similar fashion to the Omicron outbreak of 2021. A sales decline of
20% relative to the FY23 budget for 12 weeks across December 2022,
January and February 2023 has been modelled. This is significantly
worse than the impact felt from the 2021 Omicron variant.
- The second scenario looks to model a weakening in consumer
confidence, commencing in July 2022 and accelerating in October
2022 with sales between 5% and 10% below budget, allied to
continuing cost of goods sold and labour inflation reducing gross
margins by 1%.
- The third scenario combines both the above scenarios,
resulting, for example, in sales being 30% below budget across
December 2022 to February 2023.
The impact of reflecting the third scenario is to reduce
expectations of Adjusted EBITDA by approximately 54% for FY23
relative to the Group's budget. Under this scenario the Group is
forecast to remain comfortably within its borrowing facilities and
to be in compliance with its covenant obligations, and accordingly
the Directors have concluded that it is appropriate to prepare the
financial statements for the year ending 17 April 2022 on the going
concern basis.
3. New standards, amendments and interpretations adopted
Amendments to accounting standards applied from 19 April 2021
were as follows:
-- Interest Rate Benchmark Reform - Phase 2 impacts on IFRS9,
IAS39, IFRS 7, IFRS4 and IFRS16 (effective 1 January 2021).
The application of the above did not have a material impact on
the group's accounting treatment and has therefore not resulted in
any material changes.
4. Operating profit / (loss)
The operating profit / (loss) is stated after charging /
(crediting):
Year ended Year ended
Note 17 April 18 April
2022 2021
GBP000 GBP000
Depreciation of tangible fixed assets 9 11,187 10,288
Depreciation of right of use assets 9 8,451 7,567
Inventories - amounts charged as
an expense 53,815 16,804
Fees payable to the company's auditors
and its associates:
* For statutory audit services (parent and consolidated
accounts)
75 60
* for statutory audit services (subsidiary companies) 75 66
* for tax compliance services - 71
* for tax advisory services - 37
Staff costs (excluding share based
payments) 95,779 69,599
CJRS Grant income (2,045) (33,157)
Government support grant income (2,490) (4,054)
Pre-opening costs 2,344 421
Exceptional costs 6 - 1,327
=========== ===========
Government support grant income of GBP2,490,000 relates to
income received under the Re-Start Grant Scheme. The prior year
total of GBP4,054,000 also included income received under the
Retail, Leisure and Hospitality Scheme, and The Local Restrictions
Support Grant Scheme.
5. Finance Costs
Year ended Year ended
17 April 18 April
2022 2021
GBP000 GBP000
Bank interest payable 1,190 1,398
Other interest payable 4 -
Finance cost on lease liabilities 5,682 5,642
6,876 7,040
=========== ===========
6. Exceptional Items
Year ended Year ended
17 April 18 April
2022 2021
GBP000 GBP000
Included in cost of sales
Covid-19 related - 441
Included in administrative expenses
Covid-19 related - 886
- 1,327
=========================================================== ===========
The Covid-19 related costs included in cost of sales are in
respect of the write-off of food and drink inventories resulting
from the forced closure of all sites on 4 November 2020, and 30
December 2020.
The Covid-19 related costs included in administrative expenses
include the costs of the removal and storage of furniture and soft
furnishings to enable compliance with social distancing and
professional fees incurred in respect of the amendments made to the
Group's banking facilities.
7. Tax credit on loss
The income tax credit is applicable on the Group's operations in
the UK.
Year ended Year ended
17 April 18 April
2022 2021
GBP000 GBP000
Taxation charged / (credited) to the
income statement
Current income taxation 1,266 -
Total current income taxation 1,266 -
=========== ===========
Deferred Taxation
Origination and reversal of temporary
timing differences 2,408 (2,600)
Adjustments to tax charge in respect of
prior years 109 (980)
Adjustment in respect of change of rate (56) -
of corporation tax
----------- -----------
Total deferred tax 2,461 (3,580)
=========== ===========
Total taxation charge / (credit) in the
consolidated income statement 3,727 (3,580)
=========== ===========
The above is disclosed as:
Income tax credit - current year 3,618 (2,600)
Income tax credit - prior year 109 (980)
----------- -----------
3,727 (3,580)
=========== ===========
Year ended Year ended
17 April 18 April
2022 2021
GBP000 GBP000
Profit / (loss) before tax 21,605 (14,722)
At UK standard rate of corporation taxation
of 19% (2021: 19%). 4,105 (2,797)
Expenses not deductible for tax purposes 384 206
Fixed asset permanent differences (815) (9)
Adjustments to tax charge in respect of
prior years 109 (980)
Adjustment in respect of change of rate (56) -
of corporation tax
Total tax charge / (credit) for the year 3,727 (3,580)
=========== ===========
8 Earnings / (losses) per share
Year ended Year ended
17 April 18 April
2022 2021
GBP000 GBP000
Profit / (loss) for the year after tax 17,878 (11,142)
Basic weighted average number of shares 102,728,430 102,291,621
Adjusted for share awards 2,464,588 2,076,783
Diluted weighted average number of shares 105,193,018 104,368,404
Basic earnings / (losses) per share (p) 17.4 (10.9)
Diluted earnings / (losses) per share
(p) 17.0 (10.9)
The share awards are not considered to be dilutive in the year
ended 18 April 2021 as they would have the impact of reducing the
losses per share.
9 Property, plant and equipment
Leasehold Motor Fixtures Right Total
Building Vehicles and Fittings of use
Improvements asset
GBP000 GBP000 GBP000 GBP000 GBP000
Cost
At 20 April 2020 54,498 81 53,147 121,480 229,206
Additions 2,330 - 2,790 11,735 16,855
Disposals (160) - (147) (238) (545)
At 18 April 2021 56,668 81 55,790 132,977 245,516
Accumulated depreciation
At 20 April 2020 10,525 22 16,961 35,251 62,759
Provided for the year 3,553 31 6,704 7,567 17,855
Disposals (159) - (144) (238) (541)
At 18 April 2021 13,919 53 23,521 42,580 80,073
Net book value
At 18 April 2021 42,749 28 32,269 90,397 165,443
============== ========== ============== ======== ========
Cost
At 19 April 2021 56,668 81 55,790 132,977 245,516
Additions 11,190 148 14,816 16,404 42,558
Disposals - (19) - - (19)
At 17 April 2022 67,858 210 70,606 149,381 288,055
Accumulated depreciation
At 19 April 2021 13,919 53 23,521 42,580 80,073
Provided for the year 4,018 32 7,137 8,451 19,638
Disposals - (19) - - (19)
At 17 April 2022 17,937 66 30,658 51,031 99,692
Net book value
-------------- ---------- -------------- -------- --------
At 17 April 2022 49,921 144 39,948 98,350 188,363
============== ========== ============== ======== ========
Impairment of property, plant and equipment and right of use
assets
The Group has determined that each site is a separate CGU for
impairment testing purposes. Each CGU is tested for impairment at
the balance sheet date if there exists at that date any indicators
of impairment. All sites were reviewed in FY20 following the first
national lockdown and an impairment of GBP9.8m was booked in the
FY20 financial statements. All sites have been tested for
impairment in FY22, however following the successful reopening of
all sites in April and May 2021, no further impairment has been
booked.
The value in use of each CGU is calculated based upon the
Group's latest three-year forecast. The site cash flows include an
allocation of central costs and ongoing capital expenditure to
maintain the sites. The cash flows exclude any growth capital. Cash
flows beyond the three-year period are extrapolated using the
Group's estimate of the long-term growth rate, currently 2.0%
(2021: 2.0%).
The key assumptions in the value in use calculations are the
like for like sales projections for each site, changes in the
operating cost base, the long-term growth rate and the pre-tax
discount rate. The post-tax discount rate is derived from the
Group's WACC and is currently 9.0% (2021: 8.0%).
On the basis of the impairment test undertaken the Group has not
recognised any impairment charge in the year to 17 April 2022
(2021: GBPnil). The cash flows used within the impairment model are
based upon assumptions which, while prudent, are sources of
estimation uncertainty. Management has performed sensitivity
analysis on the key assumptions in the impairment model using
reasonably possible changes in the key assumptions. A reduction in
site cash flows of 10% in each year would result in an impairment
charge of GBP2,984,000. A 100 basis point increase in the discount
rate would result in an impairment charge of GBP1,431,000 and a 50
basis point reduction in the terminal growth rate would result in
an impairment charge of GBP295,000.
10 Borrowings
17 April 18 April
2022 2021
GBP000 GBP000
Long term borrowings:
Secured bank loans 32,500 39,500
Loan arrangement fees (225) (343)
32,275 39,157
==================== =========
Secured bank loans
The Group's bank borrowings are secured by way of fixed and
floating charges over the Group's assets.
The facilities entered into at the time of the IPO provide for a
term loan of GBP32,500,000 and a revolving credit facility ("RCF")
of GBP10,000,000. The term loan is a five-year non-amortising
facility with a margin of 2% above SONIA. A three-year interest
rate swap through to July 2022 was entered into that fixes SONIA on
the full term loan facility at 0.7%.
As a consequence of Covid-19, on 22 April 2020 the Group agreed
an incremental GBP15,000,000 RCF with its lenders, providing a
total RCF of GBP25,000,000. This incremental facility was
originally due to expire in October 2021, however, given the
prolonged Covid-19 lockdowns on 16 April 2021 the facility was
extended for a further 12 months to October 2022. It is not
anticipated that this facility will be renewed in October 2022.
The term loan and RCF are subject to financial covenants
relating to leverage and interest cover. The agreement reached with
lenders on 16 April 2021 included a waiver of the covenant tests
due at 18 April 2021 and amendment of the covenant tests scheduled
for 11 July 2021, 3 October 2021 and 26 December 2021. There were
no breaches of these tests in the year to 17 April 2022.
At 17 April 2022 the term loan was fully drawn while nothing was
drawn on either of the revolving facilities (2021: term loan fully
drawn and GBP7,000,000 drawn under the RCF).
11 Analysis of changes in net debt
20 April Cash flows Non-cash 18 April
2020 movement 2021
GBP000 GBP000 GBP000 GBP000
Cash in hand 4,083 829 - 4,912
---------- ----------- ---------- ----------
Bank Loans - due after one
year (39,039) - (118) (39,157)
Lease liabilities (104,939) 10,213 (15,852) (110,578)
Net debt (139,895) 11,042 (15,970) (144,823)
Derivatives
Interest-rate swaps liability (332) - 101 (231)
Total derivatives (332) - 101 (231)
Net debt after derivatives (140,227) 11,042 (15,869) (145,054)
========== =========== ========== ==========
19 April Cash flows Non-cash 17 April
2021 movement 2022
GBP000 GBP000 GBP000 GBP000
Cash in hand 4,912 26,338 - 31,250
---------- ----------- ---------- ----------
Bank Loans - due after one
year (39,157) 7,000 (118) (32,275)
Lease liabilities (110,578) 12,218 (21,242) (119,602)
Net debt (144,823) 45,556 (21,360) (120,627)
Derivatives
Interest-rate swaps liability (231) - 269 38
Total derivatives (231) - 269 38
Net debt after derivatives (145,054) 45,556 (21,091) (120,589)
========== =========== ========== ==========
Non-cash movements in bank loans due after one year relate to
the amortisation of bank loan issue costs.
12 Reconciliation of statutory results to alternative performance measures
Year ended Year ended
17 April 18 April
2022 2021
GBP000 GBP000
Operating profit / (loss) 28,437 (7,728)
Exceptional items - 1,327
Share based payment charge 3,220 2,034
Site pre-opening costs 2,344 421
Adjusted operating profit / (loss) 34,001 (3,946)
Depreciation (pre IFRS 16 right of
use asset charge) 11,187 10,288
IFRS 16 Right of use asset depreciation 8,451 7,567
Loss / (profit) on disposal of fixed
assets - 4
Adjusted EBITDA (IFRS 16) 53,639 13,913
Adjusted EBITDA Margin % (IFRS 16) 22.6% 17.8%
IAS 17 Rent charge (11,745) (10,889)
IAS 17 Rent charge included in IAS
17 pre-opening costs 425 506
Adjusted EBITDA (IAS 17) 42,319 3,530
Adjusted EBITDA Margin (IAS 17) 17.8% 4.5%
Profit / (loss) before tax (IFRS
16) 21,605 (14,722)
IAS 17 Rent charge (11,745) (10,889)
IAS 17 Leasehold depreciation (re
landlord contributions) (675) (531)
IFRS 16 Right of use asset depreciation 8,451 7,567
IFRS 16 Lease interest charge 5,682 5,642
IFRS 16 Lease interest income (41) (46)
Loss before tax (IAS 17) 23,277 (12,979)
=========== ===========
Net debt (IFRS16) 120.627 144,823
Property lease liability (119,602) (110,578)
Net debt (IAS17) 1,025 34,245
=========== ===========
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END
FR BKBBNOBKDPOD
(END) Dow Jones Newswires
July 13, 2022 02:00 ET (06:00 GMT)
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