TIDMNGHT
RNS Number : 5850E
Nightcap PLC
14 March 2022
NIGHTCAP
14 March 2022
Nightcap plc
("Nightcap", the "Company" or the "Group")
Interim results for the 26-week period ended 26 December
2021
"Strong trading results and the successful acquisition of Barrio
Familia - Nightcap continues to execute its strategy"
Key Highlights for unaudited results for the 26-week period
ended 26 December 2021:
26 weeks ended 26 weeks ended 52 weeks ended
26 December 2021 27 December 2020 27 June 2021
(Unaudited) (Unaudited) (Audited)
----------------------------------------- ----------------- ----------------- --------------
Revenue (GBPm) 15.8 2.0 6.0
Adjusted EBITDA (GBPm) 2.5 0.6 1.0
Adjusted EBITDA (IAS17) (GBPm) 1.6 0.5 0.2
Loss from operations (GBPm) (0.0) (0.0) (4.9)
Loss before tax (GBPm) (0.5) (0.3) (5.3)
Basic and diluted loss per share (pence) (0.39) (0.46) (5.55)
Cash generated from operations (GBPm) 1.1 0.2 2.4
----------------------------------------- ----------------- ----------------- --------------
-- Reported revenues for the period increased by more than 700%
and IAS17 Adjusted EBITDA increased by more than 200%, despite
Government "Plan B" guidelines in the final two weeks of the
period
-- Acquisition of Barrio Familia on 21 November 2021 brought
four Latin American-inspired, Tequila-led, cocktail bars and
Disrepute, a luxurious high-end Soho cocktail bar into the
Group
-- Bars continue to trade strongly, with like for like* revenue
growth of 24.8% for the nine weeks ended 27 February 2022 when
compared to the same period in 2020 and 24.6% when compared to the
same period in 2019
-- 19 bars traded throughout the period, with 27 bars being
operated at the end of the period, reflecting the acquisition of
Barrio Familia and the opening of three TCC venues during November
2021, all of which traded for only the last five weeks of the
period
-- Additions to the estate provide a significant increase in
expected run rate revenues for the second half of this financial
year and the subsequent year
-- Organic growth progressing well, with three new openings,
four refurbishments and one additional new lease completed in the
period
-- Excellent opportunities in the property market with over 24
sites in legal negotiations or under offer across several Group
brands
-- Investment in people to add key operational management to
facilitate roll out plans, plus welcomed key management from Barrio
Familia
-- As at 26 December 2021, the Group had unaudited cash
resources of approximately GBP9.4m and had total legacy bank
borrowings of approximately GBP6.0m giving a net cash position of
GBP3.4m (excluding lease liabilities)
-- Nightcap has GBP4.7m of legacy bank borrowings from its
acquisitions in previous periods, and in the period assumed a
further GBP1.3m of debt from the acquisition of Barrio Familia on
long-term favourable terms
-- Completed additional two leases for TCC in Cardiff and Exeter
in 2022, which together with the three new TCC openings and the
Tonight Josephine Cardiff lease signed during the period, takes the
total new sites to six for the year so far
Sarah Willingham, CEO of Nightcap, commented:
"Nightcap has had a fantastic half year. We have taken the first
steps in significantly growing our family of bars, both by adding
the Barrio Familia Group in November 2021 and by opening three more
The Cocktail Clubs in Bristol, Reading and London. We finished the
calendar year with 27 top quality, late night bars."
"This half year has been spent focusing on getting the team and
the Group ready for the fast and sustainable growth that we have
planned for 2022 and beyond. With the team now in place to execute
Nightcap's strategy, we see continued excellent opportunities in
the property market with over 24 sites in legal negotiations or
under offer across several of our brands, in addition to the three
new bars we have already announced for Cardiff and Exeter.
Importantly, out of this portfolio of sites not a single property
premium has been paid or offered to date. We can look forward to
the growth of our brilliant brands across the United Kingdom with
confidence during the 2022 calendar year."
"At the same time we have delivered incredible numbers
throughout the core estate with reported revenue increasing by more
than 700% compared to last year (H1 2020) (primarily due to the
acquisition of The Adventure Bar Group) and a 300% increase
compared to the same period in 2019. The like for like* revenue
growth of 22.4% (compared to H1 2019) demonstrates that through
excellent management and motivated, happy teams we have been able
to respond to the pent up demand from our wonderful customers,
while significantly growing the underlying businesses."
"It is worth noting that out of our 27 bars only 19 bars (70%)
traded for the whole 26 week period. Five sites were added through
the acquisition of the Barrio Familia Group on 21 November 2021
(19%) and a further three sites (11%) opened under The Cocktail
Club brand also in November 2021."
"All of this was despite the Government's "Plan B" Guidelines
introduced in December 2021 that impacted the final few weeks of
the 26 week period. Up until the two weeks before Christmas, for
the 24 weeks ended 12 December 2021, we achieved a 28.3% increase
on a like for like* basis against the same period in 2019."
"Our amazing team were able to reschedule over 70% of the
initially cancelled Christmas bookings into our Q3 (January 2022 -
March 2022), and because of their flexibility and customer care, we
are already seeing bookings and re-bookings for Christmas
2022!"
"This performance shows that we can trade strongly with or
without COVID restrictions, and our guests and their demographics
are resilient and keen to get out and socialise."
Sarah Willingham, Michael Toxvaerd and Toby Rolph will provide a
live presentation relating to the Interim Results for the 26 weeks
ended 26 December 2021 via the Investor Meet Company platform on 16
March 2022 at 3:00 pm GMT.
The presentation is open to all existing and potential
shareholders. Investors can sign up to Investor Meet Company for
free and add to meet Nightcap via:
https://www.investormeetcompany.com/nightcap-plc/register-investor
Investors who already follow Nightcap on the Investor Meet
Company platform will automatically be invited.
For further enquiries:
Nightcap plc
Sarah Willingham / Toby Rolph / Gareth Edwards email@nightcapplc.com
Allenby Capital Limited (Nominated Adviser and
Broker) +44 (0) 20 3328 5656
Nick Naylor / Alex Brearley / Piers Shimwell (Corporate www.allenbycapital.com
Finance)
Matt Butlin / Amrit Nahal / Tony Quirke (Sales
and Corporate Broking)
Bright Star Digital (PR) https://www.brightstardigital.co.uk/
Pam Lyddon +44 (0) 7534 500 829
pamlyddon@brightstardigital.co.uk
* Like for like revenue is a measure of the period over period
change in revenue for the same site base. We define the same site
base to include sites that have been open for a full 52 week
period. The Board believes this measure highlights the performance
of existing sites, while excluding the impact of new site openings
and site closures due to refurbishments. The Board considers this
to be a widely used indicator in the hospitality sector to measure
current trading performance.
Within the context of this announcement, the Group's trading
over the 26-week period ended 26 December 2021 has been compared
with the 26 week period ended 29 December 2019. The trading over
the 24-week period ended 12 December 2021 has been compared with
the 24 week period ended 15 December 2019. For the post half year
end trading period, the trading over the nine-week period ended 27
February 2022 has been compared with the nine week period ended 1
March 2020 for the 2020 comparison and has been compared with the
nine week period ended 3 March 2019 for the 2019 comparison.
For all periods presented the same site base includes ten TCC
sites, seven Adventure Bar Group sites and five Barrio Familia
sites. The Board believes this gives a more meaningful comparison
to highlight trading performance in the Group following the
acquisitions of Adventure Bar Group in May 2021 and Barrio Familia
in November 2021'.
CHIEF EXECUTIVE OFFICER'S STATEMENT
I am pleased to present Nightcap's unaudited interim results for
the 26-week period from 28 June 2021 to 26 December 2021.
TRADING
For the 26 weeks ended 26 December 2021, the Group's reported
revenues increased by more than 700% to GBP15.8m, with a 22.4% like
for like* increase compared to the same period in 2019. Excluding
the 'Plan B' period, Group revenue increased by 28.3% on a like for
like* basis for the 24 weeks ended 12 December 2021 compared to the
same period in 2019.
As well as fast, sustainable growth, we continue to focus on our
conversion, and in this respect, we are delighted to report a
strong Adjusted EBITDA of GBP2.5m (IAS17 Adjusted EBITDA: GBP1.6m)
for the half year. This is an increase of over 300% and 200%
respectively on the comparable period in 2020.
As at 26 December 2021, the Group had unaudited cash resources
of approximately GBP9.4m and had total legacy bank borrowings
assumed from its acquisitions of approximately GBP6.0m giving a net
cash position of GBP3.4m (excluding lease liabilities). With the
legacy debt from our acquisitions having attractive terms (both in
tenure and interest rate) Nightcap is well placed to execute its
roll out strategy.
BRANDS
Since the inception of Nightcap in January 2021, we have
delivered on our strategy to acquire strong brands, aimed at the
resilient millennial market, with simple, replicable business
models and nationwide appeal.
In November 2021, we welcomed the Barrio Familia group into the
Nightcap family, comprising four Latin American- inspired,
Tequila-led, cocktail bars under the Barrio brand and the famous
Disrepute bar in Kingly Court, Soho, which recently won a well
deserved 12th place in William Reed's UK Top 50 Cocktail Bars. The
total consideration paid for the Barrio Familia group was GBP5.6m,
comprising cash and shares. As part of the acquisition, the Group
acquired net cash of GBP1.4m (comprising cash of GBP3.2m and bank
loans and borrowings of GBP1.8m) resulting in a net cash
consideration of GBP3.2m (excluding the consideration shares issued
of GBP1.1m).
When Nightcap was founded and after the acquisition of The
Cocktail Club (TCC), one of our goals was to acquire a bar group
that has the potential to maximise on the winning combination of
margaritas and tacos. Over the past year, we have closely observed
the significant growth of the Tequila market with great interest,
and believe that this acquisition has significant potential for
UK-wide expansion and we have already begun sourcing potential
sites across the country. The entire team at Barrio has hit the
ground running and has integrated well, sharing offices and
resources with the other brands and teams. They have already
prepared an ambitious roll-out plan for the brand and are now fully
embedded into the property pipeline as described.
In addition to The Cocktail Club and Barrio brands, during 2022
we will focus on the roll out of Tonight Josephine and Blame Gloria
across the UK.
Tonight Josephine has now grown to four venues, with the most
recent venture being the opening of their new site in Clapham High
Street (replacing an Adventure Bar site). Seeing a significant
uplift in sales since its re-brand, the site has become a go-to
hotspot for on-trend 20-somethings in South-West London. Fuelled by
wild themed brunches and late-night party antics, the site
continues to go from strength to strength.
In the pipeline for Tonight Josephine is the imminent launch of
a new bar in Cardiff in early April 2022, which will be the first
of their bars to boast a brand-new look and feel. Noticing a gap in
the market, Tonight Josephine is on a mission to disrupt the
Millennial-focused landscape and fulfil the surge in demand from
Generation Z for stand out places to enjoy a night out. Tapping
into popular culture and piggybacking off the 'TikTok' era - this
design refresh is planned to be, as always, right on trend and is
set to put Tonight Josephine on the map as the trailblazers of this
new wave of hospitality.
Much like Tonight Josephine, Blame Gloria is also going through
exciting developments. Having successfully opened their second bar
in Clapham Junction (also replacing an original Adventure Bar
site), they are set to swing the doors open to their first regional
site in the first half of 2022. Part of Blame Gloria's ongoing
strategy is to bring the same sell-out brunches and late night
socialising from Covent Garden, to all corners of the UK.
Fuelled by their dreamy interiors, outstanding cocktail menus
and electric vibes; Tonight Josephine, Blame Gloria and The
Cocktail Club have recently undertaken a partnership with hot new
dating app, Thursday .Selling out in minutes and surpassing midweek
sales targets, this ongoing partnership has solidified these bars
as the place to be for singles across London.
Having successfully opened three new sites in November 2021, The
Cocktail Club is well on its way to its fast national roll out with
two more sites announced in Exeter and Cardiff both opening their
doors in April, with many more planned over the coming months. All
three Cocktail Club bars have opened ahead of budget and are
already exceeding management's expectations.
With their Mansion House site in a prime location for after-work
partygoers, it has seen midweek trade build significantly week on
week, proving that a cocktail with your colleagues is no longer a
thing of the past. Bristol and Reading are re--affirming the
Board's views that there is strong demand for quality cocktails and
late night socialising in the regions outside of London.
MARKET OUTLOOK
The challenges facing the economy and hospitality industry
cannot go without mention.
We continue to receive unprecedented demand, in a typically
quiet time of year, across the entire Nightcap portfolio; The
Adventure Bar Group, The Cocktail Club and our newest acquisition,
Barrio Familia. This is largely due to the distinct and immersive
concepts that they continue to offer, and the growing popularity of
the premium brands they represent. With Covid cases being a
fraction of what was seen at Christmas, and life drawing ever
closer to normal, we have seen an immediate bounce-back across the
estate and pre-Covid socialising habits resurging, leading to the
steep incline in growth. Effectively entering our delayed
"Christmas period", with a wealth of rearranged Christmas parties,
we are seeing a promising uplift in late-night footfall and the
return of late-night partying both in the Capital and the
regions.
Having put all the wheels in motion to ensure that we are well
positioned, should further restrictions be put in place, and
equipped to tackle the everchanging Covid landscape, whilst
remaining profitable at a site level - the Board is confident that
the end of the pandemic is near and even more confident that we are
in a fantastic position to continue thriving in this new and
exciting climate.
The staff across all three of our bar groups are proof that we
are building one of the best hospitality businesses in the UK.
Faced with unexpected adversity across the Christmas period, with
cancelled Christmas parties, working from home orders coming into
effect and livelihoods put on hold, they have remained resilient,
persistent and most importantly, filled with buckets of energy. We
were pleased that our staff were not disheartened by the unexpected
turn of events at Christmas, and rather were optimistic about what
lay on the other side.
Aside from our in-house teams, we have also seen continued
support from suppliers, stakeholders, landlords and investors, who
have all remained flexible and been willing to adapt with us, going
above and beyond to find solutions in an undeniably difficult
time.
Finally, we owe a huge thank you to our guests, who have handled
cancelled plans, missed celebrations and lost time with unrivalled
patience and understanding. When all is said and done, our guests
are the people who allow us to continue to put on great parties and
ultimately thrive as a business. We cannot wait to play host to
hundreds of belated Christmas parties and deliver our biggest year
of summer parties to date.
PIPELINE/ROLL OUT
With a business model that seeks an ROI** above 75% per site per
year across the Group we are capitalised and ready to ramp up our
fast sustainable growth in 2022.
Our team have been travelling all over the country making sure
that we are able to take advantage of the significant opportunity
that we currently see in the property landscape. Competition for
sites is lower than management has seen in 20 years as many
businesses are forced to focus on balance sheet challenges, having
taken on significant debt over the course of the last two years.
Landlords are looking for strong covenants and long term tenants.
The end of the moratorium for commercial rent in March 2022 will
likely see a further influx of property onto the market.
With a varied portfolio of brands we are able to look at most
sites on the market from 2,000 - 10,000 square feet that have the
relevant planning and licensing. We have already demonstrated that
we can have multiple brands successfully operating alongside each
other in both Clapham and Shoreditch and by the end of the year we
will see a number of Nightcap brands in other cities operating
close to each other, helping to revive city centres and enhance
quality late night socialising in key urban areas, where demand is
high.
In all of the more than 30 new sites that we have opened,
announced as completed, currently have under offer or in legal
negotiations, we have not offered or paid a single property premium
and yet we continue to find top tier sites in all of our
prioritised cities nationwide.
**ROI is a ratio where the mature normalised site EBITDA is
divided by the site's total capital expenditure. This ratio is
considered by the Board to be an important indicator of the group's
capital efficiency.
PEOPLE
We have continued to put power behind our hiring strategy to
secure only the most skilled people in the hospitality sector, to
ensure that we nurture an industry-leading management team that
trickles down to all levels of staff. The end goal is to improve
company culture, promote growth across all departments and to act
with an 'aces in places' mentality to ensure that opportunity
unites with skill.
With the acquisition of Barrio Familia in November 2021, new
additions to the management team included hospitality entrepreneur
and founder of the Barrio bar group, Ferdie Ahmed, and Jim
Robertson, Barrio's Managing Director, who has over 15 years of
experience within the hospitality sector. Together they have
successfully opened multiple sites and along with the existing team
represent the best-in-class of the premium bars world in the
UK.
In addition, we have appointed Nick Moule, formerly of
Stonegate, as Operations Director at The Adventure Bar Group, who
we consider to be an exciting hire with a track-record of
delivering fantastic guest experiences across an extensive number
of sites, whilst managing a fast growing group. Also joining The
Adventure Bar Group, is newly appointed Head of People, Chantelle
Christy. Chantelle has a wealth of knowledge across both the
restaurant and cocktail bar sector and is well equipped to
spearhead the new HR function within the Adventure Bar Group.
SYSTEMS
Although the changing hospitality landscape has presented us
with the opportunity and reason to expand at a rapid pace, we are
dedicated to retaining our authenticity across all of our brands
throughout our expansion. A huge part of why the bars in our
portfolio are viewed as pioneers, is down to the independence,
culture and ultimately, the magic and experiences that they provide
for guests when visiting their much loved venues - this is
something we will never take away. By acting as a group, it allows
us to share our pools of knowledge, align our back of house
systems, benefit from group purchasing and generally elevate our
internal processes, offering up the foundations for fruitful
business by utilising the best skill sets across the individual
operating groups.
We expect to continue to invest further in both people and
systems to enhance and improve our online and offline customer
journeys, app and web interfaces and experience, point of sale
systems, data management and utilisation, plus several other areas.
The Board considers that this is key to enhancing the customer
experience of our individual brands as well as giving our managers
and leadership across the Group the best possible tools to optimise
the existing estate whilst also continuing our nationwide
expansion.
FINANCIAL STATEMENTS / CONSOLIDATED STATEMENT OF COMPREHENSIVE
INCOME
FOR THE 26 WEEKSED 26 DECEMBER 2021
26 weeks ended 26 weeks ended 52 weeks ended
---------------------
26 December 2021 27 December 2020 27 June 2021
---------------------
(Unaudited) (Unaudited) (Audited)
Note GBP GBP GBP
--------------------- ---- ---------------- ---------------- --------------
Revenue 15,786,106 1,968,681 5,968,667
Cost of sales (3,294,057) (454,642) (1,414,419)
--------------------- ---- ---------------- ---------------- --------------
Gross profit 12,492,049 1,514,039 4,554,248
Administrative
expenses (12,521,263) (1,588,163) (10,008,896)
Other income 12,000 25,000 565,748
--------------------- ---- ---------------- ---------------- --------------
Adjusted EBITDA 2,526,887 626,995 958,076
Share based payments (198,140) - (3,823,642)
Depreciation (1,654,486) (524,805) (1,258,637)
Amortisation of
intangible assets (207,169) (732) (51,099)
Exceptional items 3 (352,984) (150,582) (713,598)
Pre opening costs (131,322) - -
--------------------- ---- ---------------- ---------------- --------------
Loss from operations (17,214) (49,124) (4,888,900)
Finance expense (472,644) (206,435) (407,537)
--------------------- ---- ---------------- ---------------- --------------
Loss before taxation (489,858) (255,559) (5,296,437)
Tax credit on
loss 4 33,104 - 32,098
--------------------- ---- ---------------- ---------------- --------------
Loss and total
comprehensive
loss for the period (456,754) (255,559) (5,264,339)
--------------------- ---- ---------------- ---------------- --------------
Loss for the period
attributable to:
- Owners of the
parent (736,865) (255,559) (5,373,111)
- Non-controlling
interest 280,111 - 108,772
--------------------- ---- ---------------- ---------------- --------------
(456,754) (255,559) (5,264,339)
--------------------- ---- ---------------- ---------------- --------------
26 weeks ended 26 weeks ended 52 weeks ended
26 December 27 December
2021 2020 27 June 2021
(Unaudited) (Unaudited) (Audited)
Note pence pence pence
-------------------------------- ---- -------------- -------------- --------------
Earnings per share attributable
to the ordinary equity holders
of the parent
Loss per share 5
- Basic and diluted (0.39) (0.46) (5.55)
-------------------------------- ---- -------------- -------------- --------------
FINANCIAL STATEMENTS / CONSOLIDATED STATEMENT OF FINANCIAL
POSITION
AS AT 26 DECEMBER 2021
26 December 27 December
2021 2020 27 June 2021
(Unaudited) (Unaudited) (Audited)
Note GBP GBP GBP
-------------------------------- ---- ------------ ------------ ------------
Non-current assets
Goodwill 9,279,942 - 6,572,920
Intangible assets 4,927,790 6,586 3,084,034
Property, plant and equipment 6,806,280 2,011,225 3,547,573
Right of use assets 21,064,846 4,540,133 13,446,863
Other receivable 417,270 257,620 271,150
-------------------------------- ---- ------------ ------------ ------------
Total non-current assets 42,496,128 6,815,564 26,922,540
-------------------------------- ---- ------------ ------------ ------------
Current assets
Inventories 611,413 130,312 329,350
Trade and other receivables 1,674,535 322,111 804,411
Cash and cash equivalents 9,448,673 127,943 13,187,479
-------------------------------- ---- ------------ ------------ ------------
Total current assets 11,734,621 580,366 14,321,240
-------------------------------- ---- ------------ ------------ ------------
Total assets 54,230,749 7,395,930 41,243,780
-------------------------------- ---- ------------ ------------ ------------
Current liabilities
Loans and borrowings (1,604,373) (1,076,027) (1,458,652)
Trade and other payables 6 (10,108,618) (1,098,459) (8,628,163)
Lease liabilities due less than
one year (1,968,145) (691,117) (1,440,525)
-------------------------------- ---- ------------ ------------ ------------
Total current liabilities (13,681,136) (2,865,603) (11,527,340)
-------------------------------- ---- ------------ ------------ ------------
Non-current liabilities
Borrowings (4,408,181) (402,287) (3,255,620)
Lease liabilities due more than
one year (20,684,179) (4,483,150) (12,462,624)
Provisions (150,054) - (150,054)
Deferred tax provision (1,263,393) (92,240) (666,662)
-------------------------------- ---- ------------ ------------ ------------
Total non-current liabilities (26,505,807) (4,977,677) (16,534,960)
-------------------------------- ---- ------------ ------------ ------------
Total liabilities (40,186,943) (7,843,280) (28,062,300)
-------------------------------- ---- ------------ ------------ ------------
Net assets / (liabilities) 14,043,806 (447,350) 13,181,480
-------------------------------- ---- ------------ ------------ ------------
Called up share capital 7 1,911,578 55,379 1,854,752
Share premium 20,318,766 178,017 19,267,483
Share based payment reserve 427,201 92,429 216,230
Reverse acquisition reserve (2,512,590) (45,131) (2,512,590)
Retained earnings (6,490,032) (728,044) (5,753,167)
-------------------------------- ---- ------------ ------------ ------------
13,654,923 (447,350) 13,072,708
-------------------------------- ---- ------------ ------------ ------------
Non-controlling interest 388,883 - 108,772
-------------------------------- ---- ------------ ------------ ------------
Total equity 14,043,806 (447,350) 13,181,480
-------------------------------- ---- ------------ ------------ ------------
FINANCIAL STATEMENTS / CONSOLIDATED STATEMENT OF CHANGES IN
EQUITY
FOR THE 26 WEEKSED 26 DECEMBER 2021
Total
attributable
Share to equity
Called based Reverse holders Non-
up share Share payment acquisition Retained of controlling Total
capital premium reserve reserve earnings parent interest equity
GBP GBP GBP GBP GBP GBP GBP GBP
---------------- --------- ---------- -------- ------------ ----------- ------------- ------------ -----------
At 28 June 2020 55,379 178,017 92,429 (45,131) (472,485) (191,791) - (191,791)
Total
comprehensive
expense for the
26 week period - - - - (255,559) (255,559) - (255,559)
---------------- --------- ---------- -------- ------------ ----------- ------------- ------------ -----------
At 27 December
2020 55,379 178,017 92,429 (45,131) (728,044) (447,350) - (447,350)
---------------- --------- ---------- -------- ------------ ----------- ------------- ------------ -----------
Issue of share
capital 300 50,700 (92,429) - 92,429 51,000 - 51,000
Transfer to
reverse
acquisition
reserve (55,679) (228,717) - 284,396 - - - -
Recognition of
Nightcap
plc equity at
reverse
acquisition 398,800 845,200 - (2,751,855) - (1,507,855) - (1,507,855)
Issue of shares
- IPO 400,000 3,600,000 - - - 4,000,000 - 4,000,000
Transaction fees
related to
issue
of shares - (628,588) - - - (628,588) - (628,588)
Issue of shares
on acquisition
-
The Cocktail
Club 553,788 4,984,095 - - - 5,537,884 - 5,537,884
Issue of shares
on acquisition
-
Adventure Bar
Group 47,619 1,142,857 - - - 1,190,476 - 1,190,476
Issue of shares
- placing
shares 434,783 9,565,217 - - - 10,000,000 - 10,000,000
Transaction fees
related to
placing
shares - (636,537) - - - (636,537) - (636,537)
Issue of shares
- debt
conversion 19,762 395,238 - - - 415,000 - 415,000
Share based
payments
and related
deferred
tax recognised
directly
in equity - - 216,230 - - 216,230 - 216,230
---------------- --------- ---------- -------- ------------ ----------- ------------- ------------ -----------
Total
transactions
with owners
recognised
directly in
equity 1,854,752 19,267,483 216,230 (2,512,590) (635,615) 18,190,260 - 18,190,260
---------------- --------- ---------- -------- ------------ ----------- ------------- ------------ -----------
Total
comprehensive
expense for the
26 week period - - - - (5,117,552) (5,117,552) 108,772 (5,008,780)
---------------- --------- ---------- -------- ------------ ----------- ------------- ------------ -----------
At 27 June 2021 1,854,752 19,267,483 216,230 (2,512,590) (5,753,167) 13,072,708 108,772 13,181,480
---------------- --------- ---------- -------- ------------ ----------- ------------- ------------ -----------
Issue of shares
on acquisition
-
Barrio Bar
Group 56,826 1,051,283 - - - 1,108,109 - 1,108,109
Share based
payments
and related
deferred
tax recognised
directly
in equity - - 210,971 - - 210,971 - 210,971
---------------- --------- ---------- -------- ------------ ----------- ------------- ------------ -----------
Total
transactions
with owners
recognised
directly in
equity 1,911,578 20,318,766 427,201 (2,512,590) (5,753,167) 14,391,788 108,772 14,500,560
---------------- --------- ---------- -------- ------------ ----------- ------------- ------------ -----------
Total
comprehensive
expense for the
26 week period - - - - (736,865) (736,865) 280,111 (456,754)
---------------- --------- ---------- -------- ------------ ----------- ------------- ------------ -----------
At 26 December
2021 1,911,578 20,318,766 427,201 (2,512,590) (6,490,032) 13,654,923 388,883 14,043,806
---------------- --------- ---------- -------- ------------ ----------- ------------- ------------ -----------
FINANCIAL STATEMENTS / CONSOLIDATED STATEMENT OF CASH FLOW
FOR THE 26 WEEKSED 26 DECEMBER 2021
26 weeks ended 26 weeks ended 52 weeks ended
26 December 27 December 27 June 2021
2021 2020
(Unaudited) (Unaudited) (Audited)
GBP GBP GBP
----------------------------------------------- -------------- -------------- --------------
Cash flows from operating activities
Loss for the period (456,754) (255,559) (5,264,339)
Adjustments for:
Depreciation 1,654,486 524,805 1,258,637
Amortisation 207,169 732 51,099
Lease concessions - (177,448) -
Revaluation of right of use assets - (108,697) -
Share based payments 198,140 - 3,823,642
Interest on lease liabilities 370,754 128,809 297,215
Interest on borrowings 101,890 77,626 110,322
Tax expense (33,104) - (32,098)
(Increase)/decrease in trade and other
receivables (256,147) 121,648 19,436
(Decrease)/increase in trade and other
payables (518,215) (129,004) 2,112,687
(Increase)/decrease in inventories (170,322) 9,414 42,744
----------------------------------------------- -------------- -------------- --------------
Cash generated from operations 1,097,897 192,326 2,419,345
Corporation taxes (paid)/repaid (59,091) 30,899 30,901
----------------------------------------------- -------------- -------------- --------------
Net cash flows from operating activities 1,038,806 223,225 2,450,246
----------------------------------------------- -------------- -------------- --------------
Investing activities
Acquisition of Adventure Bar Group, net
of cash - - 657,088
Acquisition of The Cocktail Club - transaction
costs and pre IPO expenses - - (902,401)
Acquisition of Barrio Bar Group, net of
cash (461,800) - -
Purchase of property, plant and equipment (2,728,869) (36,977) (508,865)
Purchase of intangible assets (30,025) - (9,275)
----------------------------------------------- -------------- -------------- --------------
Net cash used in investing activities (3,220,694) (36,977) (763,453)
----------------------------------------------- -------------- -------------- --------------
Financing activities
Issue of ordinary shares - - 15,295,000
Share issue costs - - (1,265,125)
Repayment of loans and borrowings (525,996) (10,618) (1,418,023)
Principal paid on lease liabilities (569,853) (4,687) (744,081)
Interest paid on lease liabilities (370,754) - (297,215)
Interest paid on loans and borrowings (90,315) (77,625) (104,495)
Shareholder loan repayments - (229,863) (229,863)
----------------------------------------------- -------------- -------------- --------------
Net cashflow from financing activities (1,556,918) (322,793) 11,236,198
----------------------------------------------- -------------- -------------- --------------
Net (decrease)/increase in cash and cash
equivalents (3,738,806) (136,545) 12,922,991
Cash and cash equivalents at beginning
of the period 13,187,479 264,488 264,488
----------------------------------------------- -------------- -------------- --------------
Cash and cash equivalents at end of the
period 9,448,673 127,943 13,187,479
----------------------------------------------- -------------- -------------- --------------
FINANCIAL STATEMENTS / NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS
1. GENERAL INFORMATION
The Directors of Nightcap plc (the "Company") and its
subsidiaries (the "Group") present their interim report and the
unaudited condensed consolidated financial statements for the 26
weeks ended 26 December 2021 ("Interim Financial Statements").
The Company is a public limited company whose shares are
publicly traded on the AIM market of the London Stock Exchange and
is incorporated and registered in England and Wales. The registered
office address of the Company is c/o Locke Lord (UK) LLP, 201
Bishopsgate, London, EC2M 3AB.
The Interim Financial Statements were approved by the Board of
Directors on 11 March 2022.
2. ACCOUNTING POLICIES
2.1. Basis of preparation
The Interim Financial Statements have been prepared in
accordance with IAS34, 'Interim Financial Reporting'. They do not
include all of the information required for a complete set of IFRS
financial statements. However, selected explanatory notes are
included to explain events and transactions that are significant to
an understanding of the changes in the Group's financial position
and performance since the last financial statements.
The Interim Financial Statements are presented in Pounds
Sterling, except where otherwise indicated; and under the
historical cost convention.
In January 2021 the Company acquired the entire share capital of
The Cocktail Club Limited in a share for share exchange. The
introduction of the Company into the Group has been accounted for
as a reverse acquisition. In doing so the comparatives for the 26
weeks ended 27 December 2021 and 52 weeks ended 27 June 2021 have
been presented as if the Group had always existed in its current
form.
The Directors consider that the principal risks and
uncertainties faced by the Group are as set out in the Group's
Annual Report and Financial Statements for the period ended 27 June
2021.
The accounting policies adopted in the preparation of the
Interim Financial Statements are consistent with those applied in
the preparation of the Group's consolidated financial statements
for the period ended 27 June 2021. The Group has not early adopted
any other standard, interpretation or amendment that has been
issued but is not yet effective.
2.2. Going concern
In concluding that it is appropriate to prepare these Interim
Financial Statements on the going concern basis, the Directors have
considered the Group's cash flows, liquidity and business
activities. Particular attention has been paid to the impact of
Covid-19 on the business, both experienced to date and potentially
foreseeable in the future.
As reported in the Group's Annual Report and Financial
Statements for the period ended 27 June 2021, the Group had cash
balances of GBP13.2m at that date. As at 26 December 2021, the
Group had cash balances of GBP9.4m with the reduction primarily
driven by the GBP2.7m the Group has invested in its existing and
new sites during the period, along with net cash outflows of
GBP0.8m associated with the Barrio Familia acquisition.
Based on these assessments the Group forecasts to be in
compliance with its banking covenant obligations, and accordingly
the Directors have concluded that it is appropriate to prepare the
Interim Financial Statements on the going concern basis. If further
lockdowns are mandated there is a risk that a reduction in trade
could potentially cause the Group to breach future EBITDA based
bank covenants. However, given the strong relationship the Group
has with its bankers, the Board anticipates that its bankers would
continue to be supportive.
2.3. Alternative Performance Measures
The Interim Financial Statements include both statutory and
alternative performance measures ("APMs"). Further background to
the use of APMs and reconciliations between statutory measures and
APMs are presented in Note 10.
2.4. Accounting estimates and judgements
In preparing these Interim Financial Statements, management has
made judgements, estimates and assumptions that affect the
application of accounting policies and the reported amounts of
assets and liabilities, income and expense. Actual results may
differ from these estimates.
The significant judgements made by management in applying the
Group's accounting policies and the key sources of estimation
uncertainty were the same as those applied to the Group's
consolidated financial statements for the period ended 27 June 2021
and are set out in the Group's Annual Report and Financial
Statements for that period.
2.5. Seasonality
The Group has a variety of brands and concepts within its
business. The demand across our sites is well spread throughout the
financial year. Historically the lead up to Christmas has always
been a busy period for hospitality businesses but with our well
diversified range of brands, the seasonal impact of Christmas is
balanced with strong summer periods due to the outdoor venues in
the Group, particularly Luna Springs and Bar Elba which provide
large outdoor bar and event space.
3. EXCEPTIONAL ITEMS
26 weeks ended 26 weeks ended 52 weeks ended
26 December 27 December 27 June 2021
2021 2020
(Unaudited) (Unaudited) (Audited)
GBP GBP GBP
---------------------------------------- -------------- -------------- --------------
Included in administrative expenses:
IPO and acquisition related transaction
costs 352,984 150,582 546,068
Corporate finance fees - - 167,530
---------------------------------------- -------------- -------------- --------------
352,984 150,582 713,598
---------------------------------------- -------------- -------------- --------------
The IPO and acquisition related transaction costs in the 26
weeks ended 26 December 2021 relate to costs incurred directly in
connection with the acquisition of Barrio Familia Limited. For the
26 weeks ended 27 December 2020 and 52 weeks ended 27 June 2021
these costs relate to the IPO and reverse acquisition of The
Cocktail Club which completed on 13 January 2021, along with the
acquisition of Adventure Bar Group on 14 May 2021. These costs
include employee bonuses and professional fees.
The corporate finance fees in the 52 weeks ended 27 June 2021
represent legal and advisory costs paid by The Cocktail Club in
2021 in connection with an aborted sale of The Cocktail Club in
2019. These costs had no cash impact on the Group, as they were
borne by the vendors of The Cocktail Club by virtue of being
withheld by the Company from the sale proceeds paid to them.
4. TAX CREDIT ON LOSS
The income tax credit is applicable on the Group's
operations.
26 weeks 26 weeks 52 weeks
ended ended ended
26 December 27 December 27 June
2021 2020 2021
(Unaudited) (Unaudited) (Audited)
GBP GBP GBP
-------------------------------------- ------------- ------------- -----------
Taxation (credit) / charge to
the income statement
Current income taxation - - 18,585
Adjustments for current taxation
of prior periods - - -
Research & development claim - - -
-------------------------------------- ------------- ------------- -----------
Total current income taxation - - 18,585
-------------------------------------- ------------- ------------- -----------
Deferred Taxation
Origination and reversal of temporary
timing differences
Current period 19,122 - (303,947)
Adjustments in respect of prior
periods - - (3,168)
Adjustment in respect of change
of rate of corporation tax (52,226) - 256,432
-------------------------------------- ------------- ------------- -----------
Total deferred tax (33,104) - (50,683)
-------------------------------------- ------------- ------------- -----------
Total taxation credit in the
consolidated income statement (33,104) - (32,098)
-------------------------------------- ------------- ------------- -----------
The taxation credit on loss for the interim period is GBP33,104
(26 weeks ended 27 December 2020 - GBPnil). The effective tax rate
of 6.8% (26 weeks ended 27 December 2020 - 0%) differs from the UK
corporation tax rate (19%) as a result of permanent disallowable
costs (depreciation of non-qualifying fixed assets, exceptional
items, accounting share based payment charge) and the differential
between the rate at which items impact current tax compared with
deferred tax, all reducing the effective tax rate for the year. The
rate reduction is partially offset by the 30% permanent element of
the 130% capital allowances 'super deduction' on new qualifying
plant and machinery additions and the impact of certain brought
forward deferred tax balances being restated from 19% to 25% (to
the extent the temporary differences are expected to unwind after 1
April 2023 when that rate applies).
The full year effective tax rate is expected to be c.5.7%.
5. EARNINGS PER SHARE
Basic (losses)/earnings per share is calculated by dividing the
profit/(loss) attributable to equity shareholders by the weighted
average number of shares outstanding during the year, excluding
unvested share options pursuant to The Nightcap plc Share Option
Plan and contingently issuable shares in connection with the
acquisition of the Adventure Bar Group.
Diluted earnings per share is calculated by adjusting the
weighted average number of ordinary shares outstanding to assume
conversion of all dilutive potential ordinary shares. During the 26
weeks ended 26 December 2021 the Group had potentially dilutive
shares in the form of unvested share options pursuant to the above
long-term incentive plan.
26 weeks ended 26 weeks ended 52 weeks ended
26 December 27 December 27 June 2021
2021 2020
(Unaudited) (Unaudited) (Audited)
GBP GBP GBP
----------------------------------------------- -------------- -------------- --------------
Loss for the period after tax for the purposes
of basic and diluted earnings per share (736,865) (255,559) (5,373,111)
Non-controlling interest 280,111 - 108,772
Taxation credit (33,104) - (32,098)
Finance cost 472,644 206,435 407,537
Exceptional items 352,984 150,582 713,598
Pre-opening costs 131,322 - -
Share based payment charge 198,140 - 3,823,642
Depreciation and amortisation 1,861,655 525,537 1,309,736
----------------------------------------------- -------------- -------------- --------------
Profit for the period for the purposes of
Adjusted EBITDA (IFRS 16) basic and diluted
earnings per share 2,526,887 626,995 958,076
----------------------------------------------- -------------- -------------- --------------
IAS 17 Rent charge (942,727) (136,928) (777,042)
----------------------------------------------- -------------- -------------- --------------
Profit for the period for the purposes of
Adjusted EBITDA (IAS 17) basic and diluted
earnings per share 1,584,160 490,067 181,034
----------------------------------------------- -------------- -------------- --------------
26 weeks ended 26 weeks ended 52 weeks ended
26 December 27 December 27 June 2021
2021 2020
(Unaudited) (Unaudited) (Audited)
GBP GBP GBP
----------------------------------------------- -------------- -------------- --------------
Weighted average number of ordinary shares
in issue for the purposes of basic earnings
per share 186,593,082 55,378,837 96,859,609
Effect of dilutive potential ordinary shares
from share options 6,665,383 - 3,976,038
----------------------------------------------- -------------- -------------- --------------
Weighted average number of ordinary shares
in issue for the purposes of diluted earnings
per share 193,258,465 55,378,837 100,835,647
----------------------------------------------- -------------- -------------- --------------
26 weeks ended 26 weeks ended 52 weeks ended
26 December 27 December
2021 2020 27 June 2021
(Unaudited) (Unaudited) (Audited)
pence pence pence
----------------------------------------------- -------------- -------------- --------------
Earnings per share:
Basic and diluted (0.39) (0.46) (5.55)
----------------------------------------------- -------------- -------------- --------------
Adjusted EBITDA (IFRS 16) basic 1.35 1.13 0.99
----------------------------------------------- -------------- -------------- --------------
Adjusted EBITDA (IAS 17) basic 0.85 0.88 0.19
----------------------------------------------- -------------- -------------- --------------
During a period where the Group or Company makes a loss,
accounting standards require that 'dilutive' shares for the Group
be excluded in the earnings per share calculation, because they
will reduce the reported loss per share; consequently, all
per-share measures in the current period are based on the weighted
number of ordinary shares in issue.
6. TRADE AND OTHER PAYABLES
26 December 27 December 27 June 2021
2021 2020
(Unaudited) (Unaudited) (Audited)
GBP GBP GBP
-------------------------------- ------------- ------------- ------------
Trade payables 2,776,797 542,625 2,740,849
Social security and other taxes 1,126,970 60,259 300,549
Corporation tax 359,132 221 343,652
Defined contribution pension 16,796 14,860 15,043
Other payables 3,710,409 200,563 2,974,422
Accruals and deferred income 2,118,514 279,931 2,253,648
-------------------------------- ------------- ------------- ------------
10,108,618 1,098,459 8,628,163
-------------------------------- ------------- ------------- ------------
Included within other payables is GBP2,343,000 relating to the
valuation in connection with the contingent deferred consideration
shares relating to the Adventure Bar Group acquisition in May 2021.
Other payables also includes GBP866,822 in respect of deferred
consideration arising from a completion accounts process in
relation to the acquisition of Barrio Familia Limited in November
2021 - see Note 9. This was paid in January 2022.
7. CALLED UP SHARE CAPITAL
26 December 27 December 27 June 2021
2021 2020
(Unaudited) (Unaudited) (Audited)
GBP GBP GBP
-------------------------------------------- ----------- ----------- ------------
Allotted, called up and fully paid ordinary
shares 1,911,578 55,379 1,854,752
-------------------------------------------- ----------- ----------- ------------
26 December 27 December 27 June 2021
2021 2020
Number Number Number
----------------------------------- ----------- ----------- ------------
A Ordinary shares of GBP0.001 each - 55,378,838 -
Ordinary shares of GBP0.01 each 191,157,801 - 185,475,192
----------------------------------- ----------- ----------- ------------
On 21 November 2021 the Company issued 5,682,609 ordinary shares
in connection with the acquisition of Barrio Familia Limited
accounted for at 19.5 pence - see Note 9.
8. RELATED PARTY TRANSACTIONS
Related parties are considered to be the directors of Nightcap
plc, The Cocktail Club, Adventure Bar Group and Barrio Familia.
Transactions with them are detailed below:
26 weeks ended 26 weeks ended 52 weeks
ended
26 December 27 December 27 June
2021 2020 2021
(Unaudited) (Unaudited) (Audited)
GBP GBP GBP
---------------------------------------- -------------- -------------- -----------
Consultancy Fees - 12,000 12,000
---------------------------------------- -------------- -------------- -----------
- 12,000 12,000
---------------------------------------- -------------- -------------- -----------
These transactions are split by related
party as follows:
PAF Ventures Limited - 12,000 12,000
---------------------------------------- -------------- -------------- -----------
- 12,000 12,000
---------------------------------------- -------------- -------------- -----------
9. BUSINESS COMBINATIONS
On 21 November 2021, Nightcap plc acquired 100% of the shares of
Barrio Familia Limited, for the total consideration of GBP5,602,931
comprising cash of GBP3,628,000, 5,682,609 shares issued and
accounted for at a price of 19.5p (GBP1,108,109) and deferred
consideration in relation to the completion accounts process of
GBP866,822. Through the acquisition, Nightcap has become the
operator of an additional five bars, which comprise: i) four Latin
American inspired, Tequila-led, cocktail bars in popular areas of
London which trade under the 'Barrio' brand; and ii) a high end
'60s themed members' cocktail bar which trades under the
'Disrepute' brand in London's Soho area (collectively the "Barrio
Bar Group").
The acquired business contributed revenues of GBP831,000 and
profit before tax of GBP31,000 (in accordance with IFRS) to the
consolidated Group for the period from 21 November 2021 to 26
December 2021.
The values identified in relation to the acquisition are
provisional as at 26 December 2021.
Fair Value
Book Value Adjustments Fair Value
GBP GBP GBP
----------------------------------------- ----------- ------------ -----------
Property, plant and equipment 1,345,503 - 1,345,503
Intangible assets 84,900 1,936,000 2,020,900
Right-of-use assets 5,265,431 - 5,265,431
Inventories 111,741 - 111,741
Receivables 760,097 - 760,097
Cash 3,166,200 - 3,166,200
Payables (2,041,588) - (2,041,588)
Bank loans and borrowings (1,824,278) - (1,824,278)
Lease liabilities (5,265,431) - (5,265,431)
Deferred tax liability (73,874) (568,792) (642,666)
----------------------------------------- ----------- ------------ -----------
Total net assets acquired 1,528,701 1,367,208 2,895,909
----------------------------------------- ----------- ------------ -----------
Fair value of consideration paid GBP
- Cash paid to vendor 3,628,000
- Consideration shares issued 1,108,109
- Deferred consideration 866,822
----------------------------------------- ----------- ------------ -----------
Acquisition date fair value of the total
consideration transferred 5,602,931
----------------------------------------- ----------- ------------ -----------
Goodwill 2,707,022
----------------------------------------- ----------- ------------ -----------
The Group has made certain estimates and judgements in arriving
at the valuation of intangible assets and goodwill.
In accordance with IFRS 3, the identifiable assets acquired and
liabilities and contingent liabilities assumed should be measured
at fair value at the acquisition date in order to determine the
difference between the cost of acquisition and the fair value of
the Group's share of net assets acquired, which should then be
recognised as goodwill on the balance sheet or recognised in the
income statement. In determining the fair value, management has
recognised brand values totalling GBP1.9m in respect of the brands
acquired. Key estimates used in arriving at the brand valuation
include growth rates, discount rate, cashflow assumptions including
working capital estimates, appropriate royalty rates and useful
economic lives.
In addition, the Group has made certain estimates in determining
the deferred consideration payable as part of the completion
accounts process.
10. Reconciliation of Statutory Results to Alternative
Performance Measures
26 weeks ended 26 weeks ended 52 weeks ended
26 December 27 December 27 June 2021
2021 2020
(Unaudited) (Unaudited) (Audited)
GBP GBP GBP
------------------------------------------- -------------- -------------- --------------
Loss from operations (17,214) (49,124) (4,888,900)
Exceptional items (Note 3) 352,984 150,582 713,598
Pre-opening costs 131,322 - -
Share based payment charge 198,140 - 3,823,642
------------------------------------------- -------------- -------------- --------------
Adjusted profit / (loss) from operations 665,232 101,458 (351,660)
Depreciation and amortisation (pre IFRS 16
Right of use asset depreciation) 865,633 245,743 618,544
IFRS 16 Right of use asset depreciation 996,022 279,794 691,192
------------------------------------------- -------------- -------------- --------------
Adjusted EBITDA (IFRS 16) 2,526,887 626,995 958,076
IAS 17 Rent charge (942,727) (136,928) (777,042)
------------------------------------------- -------------- -------------- --------------
Adjusted EBITDA (IAS 17) 1,584,160 490,067 181,034
------------------------------------------- -------------- -------------- --------------
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END
IR DZGMFKFGGZZM
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March 14, 2022 03:00 ET (07:00 GMT)
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