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Half-year Report

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RNS Number : 1718K
Fulham Shore PLC (The)
12 December 2018
 

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 ("MAR").

 

The Fulham Shore PLC

Unaudited interim results for the six months ended 23 September 2018

 

 

The Directors of The Fulham Shore PLC ("Fulham Shore" or the "Group") are pleased to announce the unaudited interim results for the six months ended 23 September 2018 for Fulham Shore.

 

Financial Highlights

 

·      Revenues of £33.0m (2017: £27.5m)

·      Headline EBITDA* of £4.6m (2017: £4.5m)

·      EBITDA of £4.1m (2017: £3.3m)

·      Operating profit of £1.6m (2017: £1.2m)

·      Profit after tax of £0.9m (2017: £0.6m)

·      Operating cash inflow of £4.9m (2017: £3.3m)

·      Net debt of £8.9m (24 September 2017: £9.7m) and down from £12.0m at the last year end

 

* Definition of Headline EBITDA can be found in note 3 to the unaudited interim financial information.

 

Operational Highlights

 

·      Opened 2 new Franco Manca pizzeria

·      Franco Manca made over 2,000,000 pizzas in the period

·      The Real Greek served over 350,000 tables in the period

·      Post the period end:

One further Franco Manca opened near Aldwych, London

Increased restaurant opening programme planned for FY2020

 

 

David Page, Chairman of Fulham Shore, said:

"Our two restaurant businesses performed well in the first half of the year, driven by a number of factors including: new menu initiatives, including vegan and gluten free options, within both businesses and investment in our digital channels. At the same time, we have remained resolutely focussed on both Franco Manca's and The Real Greek's stand out characteristics: exceptional food provenance and outstanding value for money menu pricing.

 

During the current financial year to date we have seen sales and profit growth, improved operating cash flow, and reduced debt exposure for the Group. These factors, together with our successful new opening so far this year, have led us to consider increasing our opening programme beyond the current financial year.

 

The Board remains confident that The Fulham Shore, underpinned by its unique brands and clear growth strategy, remains well positioned for continued growth and a great future."

 

Contacts:

 

The Fulham Shore plc

www.fulhamshore.com

David Page

 

Tel: 020 3026 8129

Allenby Capital Limited (Nominated Adviser and Broker)

Nick Naylor / Jeremy Porter / James Reeve

 

Tel: 020 3328 5656

 

Hudson Sandler (Financial PR)

Alex Brennan / Lucy Wollam

[email protected]

Telephone: 020 7796 4133

 



 

 

Notes for editors

 

Information on The Fulham Shore PLC

 

Fulham Shore was incorporated in March 2012. The Directors believed that there were attractive investment opportunities within the restaurant sector in the UK and that, given their collective experience in the restaurant sector, they could take advantage of the opportunities which existed.

 

The ordinary shares of the Company were admitted to trading on AIM in October 2014 in order to capitalise on such opportunities and to give the company employees, customers and public the ability to share in the enterprise.

 

Today, Fulham Shore owns and operates "The Real Greek" (www.therealgreek.com) and "Franco Manca" (www.francomanca.co.uk) restaurants.

 

The Real Greek

 

Since its foundation in London in 1999, The Real Greek group has grown steadily, now offering modern Greek cuisine in 16 restaurants across London and Southern England.

 

The Real Greek food centres on the delicious, healthy diet of the Eastern Mediterranean, staying true to the Greek ethos of food, family and friends. Dishes are created using premium ingredients sourced from Greece and Cyprus whenever possible, and developed by Tonia Buxton, the face of Greek food in the UK.

 

The Real Greek's menu and atmosphere retain the spirit of eating in Greece, encouraging diners to take their time eating amongst friends and family, be it a relaxed dinner, family get-together, or a fully catered party.

 

Franco Manca

 

Franco Manca opened its first restaurant in 2008 and now has 43 restaurants, primarily in London, but with recent openings in Cambridge, Bath, Oxford and Bristol. Other locations outside London are in the opening pipeline for the next 12 months. Franco Manca also has a franchised pizzeria on the island of Salina in Italy.

 

Franco Manca's pizza is made from slow-rising sourdough and is baked in an oven that produces high heat. The slow levitation and blast cooking process lock in the flour's natural aroma and moisture, giving a soft and easily digestible crust. Where possible, locally sourced and organic ingredients are used. Pizza prices start from £5.00.

 

Franco Manca has received the following accolades:

 

Winner of the R200 Best Value Restaurant Operator- Over 20 Sites Award 2017

 

Winner of the CGA Peach Hero and Icon Awards Best Concept award 2016

 

"Franco Manca is quite possibly the best pizza restaurant to ever exist in London." - Metro (2016)

 



 

 

Chairman's statement

 

Introduction

During the six months ended 23 September 2018 (the "Period"), revenue grew to £33.0m up 20% from £27.5m in the comparable period in the prior year, and Headline EBITDA* increased 1.4% to £4.6m (2017: £4.5m). Profit before taxation for the Period increased 35% to £1.5m (2017: £1.1m).

 

This robust performance was driven by further restaurant openings during the Period as well as increased customer numbers in our existing sites, both of which demonstrate the continued success of the Group's clear growth strategy, popular brands and strong value-for-money proposition.

 

Strategic progress

During the Period the Group made over 2,000,000 pizzas in Franco Manca and served more than 350,000 tables at The Real Greek.

 

The Period saw two Franco Manca pizzeria openings, in Bath and Cambridge. Both sites continue to be busy since opening their doors. Our property team continues to excel in finding interesting and sometimes quirky locations for the brand's successful expansion. Franco Manca in Bath is situated in a converted railway arch under Bath Spa railway station, for example, whilst Cambridge is in a listed (and leaning) ex jewellery shop on the Market Square. During the Period, the Group closed the Franco Manca Brighton Marina pizzeria and surrendered the lease to the landlord.

 

Our 58 strong restaurant estate as at 23 September 2018 performed well in the first half of the year and this was driven by a number of factors. Amongst these were: new menu initiatives, including vegan and gluten free options within both businesses; investment in digital channels; and our policy of keeping menu prices at "everyday value-for-money" levels.

 

Since we acquired the Franco Manca and The Real Greek businesses, we have concentrated on their stand out characteristics: food provenance and menu pricing. We feel it is essential to source the best produce for our chefs and pizzaioli to work with. These ingredients are fresh and not frozen, local where possible, and with lines of supply controlled by us. The last of these, as we cut out middlemen and agents, together with our increased volume, leads to lower menu prices for our customers. This approach still holds true. It has helped our restaurants thrive and has led, we believe, to high levels of customer loyalty and the increased customer numbers throughout the half year.

 

Cash flow

During the Period, the Group generated higher net cash inflow from operating activities of £4.9m (2017: £3.3m). With fewer openings during the Period, the Group invested £1.7m (2017: £7.0m), the majority of which was in new restaurant openings.

 

Overall net cash inflow for the Period was £2.9m (2017: £0.8m) thus reducing net debt. As at 23 September 2018, net debt was £8.9m (2017: £9.7m), some £3.1m less than £12.0m at the end of our last financial year end.

 

Dividends

No dividend is being proposed by the Board in line with its policy that, subject to the availability of distributable reserves, dividends will be paid to shareholders when the Directors believe it is appropriate and prudent to do so.

 

Current trading and outlook

Since the Period end, we have opened a further Franco Manca, close to Aldwych, London. During the current financial year to date we have seen sales and profit growth, improved operating cash flow, and reduced debt exposure for the Group. These factors, together with our successful new opening so far this year, have led us to consider increasing our opening programme beyond the current financial year, subject to how political events in the UK develop.

 

In the financial year ending March 2020 ("FY2020"), we plan to open more restaurants than the current financial year. We have to date exchanged contracts for a new Franco Manca in Edinburgh to open in FY2020 and have a number of further locations in advanced legal negotiations with landlords.

 

We continue to look for well-located new sites at reasonable rents throughout the UK, for both Franco Manca and The Real Greek. The increasing availability of restaurant space, lease incentives and capital contributions, in the current climate, should enable us to achieve higher site returns on capital than we have previously recorded. We are conscious that the longer we wait on a new site or location, the greater the choice of sites, and potentially the better the incentives from landlords. We believe that our two brands are now firmly established; we can afford to grow at a measured pace.

 

Whilst the turmoil in UK retail and restaurant sectors has continued throughout 2018, we believe that restaurant operations which offer value for money and, above all, food quality and provenance, will continue to prosper.  We will respond to Brexit in March 2019 as it occurs, when we understand how it will be implemented and the effect it may have on the UK's mood and prospects. However, we are progressing with contingency plans to prepare for all types of exits.

 

We will continue to invest in our team members, providing better training and support and, as a growing restaurant business, we continue to encourage career progression. Employee share ownership has been integral to the success of our enterprise and we will continue with this theme in the coming years.

 

The Directors believe that The Fulham Shore, underpinned by its unique brands and clear growth strategy, is well placed to mitigate the challenges currently facing the UK restaurant sector. As a profitable, growing restaurant company with a great future, we look forward to the second half of our financial year with confidence.

 

 

David Page

Chairman

 

12 December 2018

 

* Definition of Headline EBITDA can be found in note 3 to the unaudited interim financial information.

 

 



 

 

The Fulham Shore PLC

Unaudited Consolidated Statement of Comprehensive Income

for the six months ended 23 September 2018

 



Six months 

ended 

23 September 

2018 

Six months 

ended 

24 September 

2017 

Year 

ended 

25 March 

2018 


Notes

Unaudited 

£'000 

Unaudited 

£'000 

Audited 

£'000 






Revenue


32,978 

27,533 

54,695 

Cost of sales


(19,632)

(15,760)

(32,039)



             

             

             

Gross profit


13,346 

11,773 

22,656 

Administrative expenses


(10,887)

(8,991)

(18,940)



             

             

             

Headline operating profit


2,459 

2,782 

3,716 

Share based payments


(93)

(345)

(616)

Pre-opening costs


(188)

(819)

(1,209)

Amortisation of brand


(411)

(411)

(821)

Exceptional costs - impairment of property, plant and equipment


 

 

 

(867)

Exceptional costs - loss on disposal of property, plant and equipment


 

(137)

 

 

(61)



             

             

             

Operating profit


1,630 

1,207 

142 

Finance income


Finance costs


(155)

(112)

(254)



             

             

             

Profit before taxation


1,477 

1,095 

(110)

Income tax expense- current year

4

(537)

(25)

(258)

Income tax expense - prior year


218 



             

             

             

Profit for the period from continuing operations


940 

1,070 

(150) 

Loss for the period from discontinued operations

8

(475)

(415)



             

             

             

Profit for the period


940 

595 

(565)



             

             

             






Profit for the period attributable to:





Owners of the company


921  

580  

(576)

Non-controlling interests


19  

15  

11 



             

             

             



940 

595 

(565)



             

             

             

Earnings per share










Continuing and discontinued operations:





Basic

5

0.2p 

0.1p 

(0.1p)

Diluted

5

0.2p 

0.1p 

(0.1p)






Continuing operations:





Basic

5

0.2p 

0.2p 

(0.0p)

Diluted

5

0.2p 

0.2p 

(0.0p)






Headline Basic

5

0.3p 

0.4p 

0.6p 

Headline Diluted

5

0.3p 

0.4p 

0.6p 

 

There were no other comprehensive income items.



The Fulham Shore PLC

Unaudited Consolidated Balance Sheet

as at 23 September 2018

 


 

 

 

 

Notes

As at 

23 September 

2018 

Unaudited 

£'000 

As at 

24 September 

2017 

Unaudited 

£'000 

As at 

25 March 

2018 

Audited 

£'000 

Non-current assets





Intangible assets


26,198 

26,952 

26,550 

Property, plant and equipment


31,390 

31,424 

31,768 

Investments


281 

200 

281 

Trade and other receivables


981 

1,071 

943 

Deferred tax assets


362 

1,419 

193 



             

             

             



59,212 

61,066 

59,735 

Current assets





Inventories


1,586 

1,341 

1,490 

Trade and other receivables


4,054 

3,169 

3,325 

Cash and cash equivalents

6

3,249 

1,374 

359 

Assets classified as held for sale

8

213 

329 



             

             

             



8,889 

6,097 

5,503 



             

             

             

Total assets


68,101 

67,163 

65,238 



             

             

             

Current liabilities





Trade and other payables


(12,989)

(13,677)

(11,521)

Income tax payables


(961)

(917)

(486)

Borrowings


(513)

- 



             

             

             



(13,950)

(15,107)

(12,007)



             

             

             

Net current liabilities


(5,061)

(9,010)

(6,504)






Non-current liabilities





Trade and other payables


(1,378)

(1,470)

Borrowings


(12,100)

(10,550)

(12,350)

Deferred tax liabilities


(1,724)

(2,161)

(1,779)



             

             

             



(15,202)

(12,711)

(15,599)



             

             

             

Total liabilities


(29,152)

(27,818)

(27,606)



             

             

             

Net assets


38,949 

39,345 

37,632 



             

             

             

Equity





Share capital


5,714 

5,714 

5,714 

Share premium account


6,889 

6,889 

6,889 

Merger relief reserve


30,459 

30,459 

30,459 

Reverse acquisition reserve


(9,469)

(9,469)

(9,469)

Retained earnings


5,234 

5,645 

3,936 



             

             

             

Total equity attributable to owners of the company


38,827 

39,238 

37,529 

Non-controlling interest


122 

107 

103 



             

             

             

Total equity


38,949

39,345

37,632 



             

             

             



The Fulham Shore PLC

Unaudited Consolidated Statement of Changes in Equity

for the six months ended 23 September 2018

 

Six months ended 23 September 2018

Unaudited

 


Attributable to owners of the Company 




 

 

Share 

capital 

£'000 

 

 

Share 

premium 

£'000 

 

Merger 

Relief 

Reserve 

£'000 

Reverse 

Acq-uisition 

Reserve 

£'000 

 

 

Retained 

earnings 

£'000 

Equity 

Share-

holders '

Funds 

£'000 

Non- 

Control-ling 

Interests 

£'000 

 

 

Total 

equity 

£'000 










At 25 March 2018

5,714 

6,889 

30,459 

(9,469)

3,936 

37,529 

103 

37,632 










Profit for the period

921 

921 

19 

940 


             

             

             

             

             

             

             

             

Total comprehensive income for the period

 

 

 

 

 

921 

 

921 

 

19 

 

940 










Transactions with owners








  Share based payments

 

 

 

 

 

93 

 

93 

 

 

93 

  Deferred tax on share based payments

 

 

 

 

 

 

 

 

 

 

284 

 

 

284 

 

 

 

 

284 


             

             

             

             

             

             

             

             

Total transactions with owners

 

 

 

 

 

377 

 

377 

 

 

377 


             

             

             

             

             

             

             

             

At 23 September 2018

 

5,714 

 

6,889 

 

30,459 

 

(9,469)

 

5,234

 

38,827

 

122 

 

38,949 


             

             

             

             

             

             

             

             

 



 

 

Six months ended 24 September 2017

Unaudited

 


Attributable to owners of the Company 




 

 

Share 

capital 

£'000 

 

 

Share 

premium 

£'000 

 

Merger 

Relief 

Reserve 

£'000 

Reverse 

Acq-uisition 

Reserve 

£'000 

 

 

Retained 

earnings 

£'000 

Equity 

Share-

holders '

Funds 

£'000 

Non- 

Control-ling 

Interests 

£'000 

 

 

Total 

equity 

£'000 










At 26 March 2017

5,714 

6,889 

30,459 

(9,469)

4,963 

38,556 

92 

38,648 










Profit for the period

580 

580 

15 

595 


             

             

             

             

             

             

             

             

Total comprehensive income for the period

 

 

 

 

 

580 

 

580 

 

15 

 

595 










Transactions with owners








  Share based payments

 

 

 

 

 

345 

 

345 

 

 

345 

  Deferred tax on share based payments

 

 

 

 

 

 

 

 

 

 

(243)

 

 

(243)

 

 

 

 

(243)


             

             

             

             

             

             

             

             

Total transactions with owners

 

 

 

 

 

102 

 

102 

 

 

102 


             

             

             

             

             

             

             

             

At 24 September 2017

 

5,714 

 

6,889 

 

30,459 

 

(9,469)

 

5,645

 

39,238

 

107 

 

39,345 


             

             

             

             

             

             

             

             

 



 

 

Year ended 25 March 2018

Audited

 


Attributable to owners of the Company




 

 

Share 

Capital 

£'000 

 

 

Share 

Premium 

£'000 

 

Merger 

Relief 

Reserve 

£'000 

Reverse 

Acq- 

uisition 

Reserve 

£'000 

 

 

Retained 

Earnings 

£'000 

Equity 

Share-

holders '

Funds 

£'000 

Non- 

Control- 

ling 

Interests 

£'000

 

 

Total 

Equity 

£'000 










At 26 March 2017

5,714 

6,889 

30,459 

(9,469)

4,963 

38,556 

92 

38,648 










(Loss)/profit for the year

 

 

 

 

 

(576)

 

(576)

 

11 

 

(565)


             

             

             

             

             

             

             

             

Total comprehensive income

 

 

 

 

 

 

 

 

 

 

(576)

 

 

(576)

 

 

11 

 

 

(565)










Transactions with owners








Share based payments

 

 

 

 

 

616 

 

616 

 

 

616 

Deferred tax on share based payments

 

 

 

 

 

(1,067)

 

(1,067)

 

 

(1,067)


             

             

             

             

             

             

             

             

Total transactions with owners

 

 

 

 

 

(451)

 

(451)

 

 

(451)











             

             

             

             

             

             

             

             

At 25 March 2018

5,714 

6,889 

30,459 

(9,469)

3,936 

37,529 

103 

37,632 


             

             

             

             

             

             

             

             

 



The Fulham Shore PLC

Unaudited Consolidated Cash Flow Statement

for the six months ended 23 September 2018

 


 

 

 

 

 

Notes

Six months 

ended 

23 September 

2018 

Unaudited 

£'000 

Six months 

ended 

24 September 

2017 

Unaudited 

£'000 

Year 

ended 

25 March 

2018 

Audited 

£'000 






Net cash from operating activities

7

4,888 

3,327 

4,522 






Investing activities





Acquisition of property, plant and equipment


(1,710)

(6,791)

(10,044)

Acquisition of intangible assets


(77)

(4)

(27)

Acquisition of investments


(200)

(281)

Disposal of property, plant and equipment


(137)

Disposal of discontinued operation


329 



             

             

             

Net cash flow used in investing activities


(1,595)

(6,995)

(10,352)



             

             

             

Financing activities





Capital received from bank borrowings


4,550 

6,350 

Repayment of bank borrowings


(250)



Interest received


Interest paid


(155)

(112)

(254)



             

             

             

Net cash from financing activities


(403)

4,438 

6,098 



             

             

             

Net increase in cash and cash equivalents


2,890 

770 

268 






Cash and cash equivalents at beginning of the period


359 

91 

91 



             

             

             

Cash and cash equivalents at end of period

7

3,249 

861 

359 



             

             

             

 



The Fulham Shore PLC

Notes to the Unaudited Interim Financial Information

for the six months ended 23 September 2018

 

1.             General information

 

The Fulham Shore PLC is a public limited company incorporated and domiciled in England and Wales. The address of the registered office is 1st Floor, 50-51 Berwick Street, London, W1F 8SJ, United Kingdom. Copies of this Interim Statement may be obtained from the above address or the investor section of the Group's website at http://www.fulhamshore.com.

 

2.             Basis of preparation

 

The unaudited interim financial information for the six months ended 23 September 2018 has been prepared under the recognition and measurement principles of International Financial Reporting Standards as adopted by the EU ("IFRS") based on the accounting policies consistent with those used in the financial statements for the period ended 25 March 2018, and those to be applied for the year ending 31 March 2019.

 

The unaudited interim financial information was approved and authorised for issue by the Board on 12 December 2018.

 

The unaudited interim financial information for the six months ended 23 September 2018 does not constitute statutory accounts within the meaning of section 434 of the Companies Act 2006 and should be read in conjunction with the statutory accounts for the period ended 25 March 2018. The information for the year ended 25 March 2018 has been extracted from the statutory accounts for that year which have been delivered to the Registrar of Companies. The audit report on these statutory accounts was unqualified, did not contain an emphasis of matter paragraph, and did not contain a statement either under section 498(2)-(3) of the Companies Act 2006.

 

The interim financial statements are presented in Pounds Sterling because that is the currency of the primary economic environment in which the company operates. All values are rounded to the nearest one thousand Pounds (£'000) except when otherwise indicated.

 

Changes in accounting policies and disclosures:

 

IFRS 9 Financial Instruments (became effective for accounting period commencing on or after 1 January 2018)

This standard deals with the classification, measurement and recognition of financial assets and liabilities. The Group has adopted this accounting standard during the year and the implementation has not had a material impact on the Group.

 

IFRS 15 Revenue from Contracts with Customers (became effective for accounting periods commencing on or after 1 January 2018)

This standard deals with revenue recognition in contracts with customers. The Group has adopted this accounting standard during the year and the implementation has not had a material impact on the Group.

 

IFRS 16 Leases (became effective for accounting periods commencing on or after 1 January 2019)  

The Group will be required to adopt the new standard for its financial year commencing 1 April 2019.

Under IFRS 16, the majority of the Group's operating leases will be 'on balance sheet' as reflected by a right-of-use asset and corresponding lease liability. As a result, Headline EBITDA will increase as the current operating lease/rental charge will be substituted for an increased depreciation charge, arising from the right-of-use asset, and an increased interest charge, arising from the unwinding of discount on the lease liability, both which are presented below Headline EBITDA. Management are currently assessing the impact of adopting IFRS 16 and accordingly it is not yet practicable to quantify the effects or the option which the Group may select upon transition.



 

3.             Segment information

 

For management purposes, the Group was organised into two operating divisions during the 6 months ended 23 September 2018. These divisions, The Real Greek and Franco Manca, are the basis on which the Group reports its primary segment information as identified by the chief operating decision maker which is the Group's board of directors.

 

For the six months ended 23 September 2018 (Unaudited)

 


The Real 

Greek 

segment 

£'000 

Franco 

Manca 

segment 

£'000 

 

Other 

unallocated 

£'000 

 

 

Total 

£'000 






External revenue

11,896 

21,082 

32,978 






Headline EBITDA*

2,014 

2,952 

(401)

4,565 

Depreciation and amortisation

(515)

(1,575)

(16)

(2,106)


             

             

             

             

Headline operating profit/(loss)

1,499 

1,377 

(417)

2,459 






Pre-opening costs

(188)

(188)






Operating profit/(loss)

1,460 

594 

(424)

1,630 






Finance income

Finance costs

(1)

(154)

(155)


             

             

             

             

Segment profit/(loss) before taxation

1,461 

594 

(578)

1,477 

Income tax expense

(537)

(537)


             

             

             

             

Profit for the period from continuing operations

 

1,461 

 

594 

 

(1,115)

 

940 


             

             

             

             






Assets

13,061 

54,285 

755 

68,101 

Liabilities

(4,881)

(11,147)

(13,124)

(29,152)


             

             

             

             

Net assets

8,180 

43,138 

(12,369)

38,949 


             

             

             

             






Capital expenditure

296 

1,415 

1,711 


             

             

             

             

 



 

 

For the six months ended 24 September 2017 (Unaudited)

 


The Real 

Greek 

segment 

£'000 

Franco 

Manca 

segment 

£'000 

 

Other 

unallocated 

£'000 

 

 

Total 

£'000 






External revenue

9,596 

17,937 

27,533 






Headline EBITDA*

1,840 

3,008 

(348)

4,500 

Depreciation and amortisation

(422)

(1,280)

(16)

(1,718)


             

             

             

             

Headline operating profit/(loss)

1,418 

1,728 

(364)

2,782 






Pre-opening costs

(246)

(573)

(819)






Operating profit/(loss)

1,059 

599 

(451)

1,207 






Finance costs

(112)

(112)


             

             

             

             

Segment profit/(loss) before taxation

1,059 

599 

(563)

1,095 

Income tax expense

(25)

(25)


             

             

             

             

Profit/(loss) for the period from continuing operations

 

1,059 

 

599 

 

(588)

 

1,070 


             

             

             

             






Assets

10,306 

52,633 

4,224 

67,163 

Liabilities

(5,176)

(10,412)

(12,230)

(27,818)


             

             

             

             

Net assets

5,130 

42,221 

(8,006)

39,345 


             

             

             

             






Capital expenditure

2,072 

4,295 

20 

6,387 


             

             

             

             

 

 



 

 

For the year ended 25 March 2018 (Audited)

 


The Real 

Greek 

segment 

£'000 

Franco 

Manca 

segment 

£'000 

 

Other 

unallocated 

£'000 

 

 

Total 

£'000 






External revenue

18,139 

36,556 

54,695 






Headline EBITDA*

2,436 

5,427 

(433)

7,430 

Depreciation and amortisation

(931)

(2,751)

(32)

(3,714)


             

             

             

             

Headline operating profit/(loss)

1,505 

2,676 

(465)

3,716 






Pre-opening costs

(375)

(834)

(1,209)

Impairment of property, plant and equipment

 

(214)

 

(653)

 

 

(897)






Operating profit/(loss)

718 

78 

(654)

142 

Finance income

Finance costs

(1)

(254)

(254)


             

             

             

             

Segment profit/(loss) before taxation

718 

80 

(908)

(110)

Income tax expense

(40)

(40)


             

             

             

             

Loss for the year from continuing operations

 

718 

 

80 

 

(948)

 

(150)


             

             

             

             






Assets

11,585 

52,757 

896 

65,238 

Liabilities

(3,969)

(10,208)

(13,429)

(27,606)


             

             

             

             

Net assets

7,616 

42,549 

(12,533)

37,632 


             

             

             

             






Capital expenditure

2,874 

6,741 

26 

9,641 


             

             

             

             

 

Head office and PLC costs, previously treated as an operating segment, are not related to the Group's two business segments and are therefore included in other unallocated and are not part of a business segment.

 

The Group's two business segments primarily operate in one geographical area which is the United Kingdom.



 

 

*Headline EBITDA is a key measure for the Group as well as industry analysts as it is indicative of ongoing EBITDA generation of the businesses. Headline EBITDA is defined as EBITDA before amortisation of brand, impairment of property, plant and equipment, impairment of goodwill and intangible assets, onerous lease costs, restructuring costs, costs of reverse acquisition, cost of acquisition, share based payments, loss on disposal of property, plant and equipment and pre-opening costs.

 


Six months 

ended 

23 September 

2018 

Six months 

ended 

24 September 

2017 

Year 

ended 

25 March 

2018 


Unaudited 

£'000 

Unaudited 

£'000 

Audited 

£'000 





Profit/(loss) before taxation from continuing operations

 

1,477 

 

1,095 

 

(110)

Finance costs

155 

112 

254 

Finance income

(2)

(2)


             

             

             

Operating profit

1,630 

1,207 

142 

Share based payments

93 

345 

616 

Pre-opening costs

188 

819 

1,209 

Amortisation of brand

411 

411 

821 

Exceptional costs- impairment of property, plant and equipment

 

 

 

867 

Exceptional costs - loss on disposal of property, plant and equipment

 

137 

 

 

61 

Depreciation and amortisation

2,106 

1,718 

3,714 


             

             

             

Headline EBITDA

4,565 

4,500 

7,430 


             

             

             



 

 

4.             Income Tax Expense

 


Six months 

ended 

23 September 

2018 

Unaudited 

£'000 

Six months 

ended 

24 September 

2017 

Unaudited 

£'000 

Year 

ended 

25 March 

2018 

Audited 

£'000 





Income tax expense on continuing operations




Based on the result for the period:




UK Corporation tax at 19% (2017: 19%)

478 

384 

432 

Adjustment in respect of prior periods

(65)


             

             

              

Total current tax

478 

384 

367 





Deferred taxation:




Origination and reversal of temporary differences




Current year

59 

(359)

(109)

Prior year

(218)


             

             

              

Total deferred tax

59 

(359)

(327)


             

             

             

Total taxation expense on profit from continuing operations

 

537 

 

25 

 

40 


             

             

             





The above is disclosed as:




Income tax expense - current year

537 

25 

258 

Income tax expense - prior year

(218)


             

             

             


537 

25 

40 


             

             

             

 

During the period ended 23 September 2018, the Group recognised deferred taxation on share based payments crediting equity of £284,000 (2017: charge of £243,000)



 

 

5.             Earnings per share

 


Six months 

ended 

23 September 

2018 

Unaudited 

£'000 

Six months 

ended 

24 September 

2017 

Unaudited 

£'000 

Year 

ended 

25 March 

2018 

Audited 

£'000 





Profit/(loss) for the purpose of basic and diluted earnings per share:

 

921 

 

580 

 

(576)

Add back loss for the purposes of basic and diluted earnings per share (discontinued operations):

 

 

 

 

475 

 

 

415 


             

             

             

Profit/(loss) for the purposes of basic and diluted earnings per share (continuing operations):

 

921 

 

1,055 

 

(161)





Share based payments

93 

345 

616 

Deferred tax on share based payments

(115)

(255)

146 

Pre-opening costs

188 

819 

1,209 

Amortisation of brand

411 

411 

821 

Deferred tax on amortisation of brand

(68)

(68)

(137)

Exceptional costs - impairment of property, plant and equipment

 

 

 

867 

Deferred tax on impairment of property, plant and equipment

 

 

 

(98)

Exceptional costs - loss on disposal of property, plant and equipment

 

137 

 

 

61 


             

             

             

Headline profit for the period for the purposes of Headline basic and diluted earnings per share

 

1,567 

 

2,307 

 

3,324 


             

             

             

 


Six months 

ended 

23 September 

2018 

Unaudited 

No. '000 

Six months 

ended 

24 September 

2017 

Unaudited 

No. '000 

Year 

ended 

25 March 

2018 

Audited 

No. '000 





Weighted average number of ordinary shares in issue for the purposes of basic earnings per share

 

571,385 

 

571,385 

 

571,385 

Effect of dilutive potential ordinary shares:

- Share options

 

7,909 

 

29,467 

 

24,495 


             

             

             

Weighted average number of shares for the purpose of diluted earnings per share

 

579,294 

 

600,852 

 

595,880 


             

             

             

 



 

 


Six months 

ended 

23 September 

2018 

Unaudited 

Six months 

ended 

24 September 

2017 

Unaudited 

Year 

ended 

25 March 

2018 

Audited 

Earnings per share:








Basic




From continuing operations

0.2p 

0.2p 

(0.0p)

From discontinued operations

0.0p 

(0.1p)

(0.1p)


             

             

             

Total basic earnings per share

0.2p 

0.1p 

(0.1p)


             

             

             

Diluted




From continuing operations

0.2p 

0.2p 

(0.0p)

From discontinued operations

0.0p 

(0.1p)

(0.1p)


             

             

             

Total diluted earnings per share

0.2p 

0.1p 

(0.1p)


             

             

             





Headline basic

0.3p 

0.4p 

0.6p 

Headline diluted

0.3p 

0.4p 

0.6p 


             

             

             

 

 



 

 

6.             Cash and cash equivalents

 


As at 

23 September 

2018 

Unaudited 

£'000 

As at 

24 September 

2017 

Unaudited 

£'000 

As at 

25 March 

2018 

Audited 

£'000 





Cash at bank and in hand

3,249 

1,374 

359 


             

             

             

Cash and cash equivalents as presented

in the balance sheet

 

3,249 

 

1,374 

 

359 

Bank overdraft

- 

(513)

- 


             

             

             


3,249 

861 

359 


             

             

             

 

Bank balances comprise cash held by the Group on a short term basis with maturity of three months or less. The carrying amount of these assets approximates their fair value.

 

7.             Reconciliation of net cash flows from operating activities

 

 

 

Six months 

ended 

23 September 

2018 

Unaudited 

£'000 

Six months 

ended 

24 September 

2017 

Unaudited 

£'000 

Year 

ended 

25 March 

2018 

Audited 

£'000 





Profit/(loss) from continuing operations

940 

1,070 

(150)

Loss from discontinued operations

(475)

(415)


             

             

             

Profit/(loss) for the period

940 

595 

(565)





Adjustments:




Income tax expense

537 

29 

27 

Finance income

(2)

(2)

Finance costs

155 

112 

254 


             

             

             

Operating profit for the period

1,630 

736 

(286)

Depreciation and amortisation

2,517 

2,169 

4,575 

Impairment of property, plant and equipment

312 

1,062 

Loss on disposal of property, plant and equipment

138 

63 

Share based payments expense

93 

345 

616 

Provision against inventory

19 


             

             

             

Operating cash flows before movement in working capital

 

4,378 

 

3,581 

 

6,030 

Increase in inventories

(96)

(308)

(438)

Increase in trade and other receivables

(767)

(690)

(719)

Increase in trade and other payables

1,376 

748 

63 


             

             

             

Cash generated from operations

4,891 

3,331 

4,936 

Income taxes (paid)/received

(3)

(4)

(414)


             

             

             

Net cash from operating activities

4,888 

3,327 

4,522 


             

             

             

 



 

 

8.             Discontinued operations and non-current assets classed as held for sale

 

During the period ended 23 September 2018, the Group disposed of the property and business of the Bukowski franchise at D'Arblay Street, Soho, London. An impairment loss was recognised on reclassification of the property, plant and equipment as held for sale during the year ended 25 March 2018.

 

 

 

Six months 

ended 

23 September 

2018 

Unaudited 

£'000 

Six months 

ended 

24 September 

2017 

Unaudited 

£'000 

Year 

ended 

25 March 

2018 

Audited 

£'000 





Revenue

342 

617 

Expenses


(501)

(850)


             

             

             

Operating profit

(159)

(233)

Net finance costs


             

             

             

Loss before taxation

(159)

(233)

Income taxation expense

(4)

13 


             

             

             


(163)

(220)

Impairment

(312)

(195)


             

             

             

Loss from discontinued operations attributable to the owners of the company

 

 

(475)

 

(415)


             

             

             





Cash flows from discontinued operations included in the consolidated cash flow statement are as follows:




Net cash used in operating activities

(114)

(301)

Net cash used in investing activities

(18)

18 


             

             

             


(132)

(283)


             

             

             





Property, plant and equipment held for sale

213 

329 


             

             

             

 

The impairment charge above relates to the impairment of the property, plant and equipment for the D'Arblay Street restaurant business. The Group expect the fair value (estimated based on the recent market prices of similar properties in similar locations and initial offers from potential buyers) less costs to be approximately £329,000. There are no liabilities expected to be held for sale.

 


This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact [email protected] or visit www.rns.com.
 
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Quick facts: Fulham Shore PLC

Price: 11

Market: AIM
Market Cap: £63.1 m
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