TIDMSHEP
RNS Number : 7286R
Shepherd Neame Limited
09 November 2021
Shepherd Neame
Full Year Results to 26 June 2021
Shepherd Neame, Britain's Oldest Brewer and owner and operator
of 310 high quality pubs in Kent and the South East, today
announces results for the 52 weeks ended 26 June 2021.
Key points
-- Demand has been strong since reopening.
-- Cashflow is good and net debt [1] reducing.
-- Supply Chain challenges and inflation costs will persist into 2022.
Full year results
To put the year's results in context, our pubs had been closed
for 296 of the previous 421 days when they were allowed to reopen
indoors on 17 May 2021.
-- Total revenue for the year was GBP86.9m (2020 restated [2] : GBP118.2m).
-- Underlying operating loss before tax [3] was GBP(4.2)m (2020
restated2: profit of GBP1.5m). Statutory loss before tax was
GBP(16.4)m (2020 restated2: GBP(21.0)m).
-- Despite making a loss, the Company has managed its net debt 1
and cash flow tightly. Net debt 1 was GBP149.1m (2020 restated 2 :
GBP140.3m) of which lease liabilities were GBP58.3m (2020 restated
2 : GBP55.9m). Bank and private placement debt was GBP90.8m (2020
restated 2 : GBP84.5m) giving headroom to facilities of
GBP41.7m.
-- The Company Net Asset Value per share fell to GBP11.40 (2020
restated2: GBP12.47) as a result of the IFRS transition and
accumulated Covid losses. As at 26 June 2021 the Company carried
out a revaluation of its licensed assets which showed a surplus
over book value of GBP35.9m, +13%.
Trade since re-opening to year end
-- For the initial period from 12 April (when pubs reopened) to
16 May, open retail pubs achieved 62% of 2019 sales [4] and from 17
May, when indoor trading resumed, to the year end on 26 June, those
same sites achieved 97% of 2019 sales4.
-- Total beer volume has been resilient throughout the pandemic.
We have obtained new on-trade customers since re-opening and new
listings in other channels. Total volume in all channels was +8.4%
in May and June versus 20194.
-- For the 11 weeks from 12 April to 26 June, tenanted pubs
achieved 77% of their 2019 volume4. For the four weeks to 26 June,
they achieved 91% of their 2019 beer volumes4. Rent was phased back
in stages during this period to reach normal levels by August
2021.
Trading since the year end
-- The start of the new financial year has been encouraging.
Demand for food and accommodation, in particular, has been strong
since July. Drinks trade is recovering since the return to offices
in London from September.
-- For the 18 weeks from 27 June to 30 October, same outlet
like-for-like sales [5] in retail pubs were 91%
of 2019 [6] and up +37.0% vs 2020 [7] .
-- For the 18 weeks to 30 October, same outlet like-for-like
drinks sales in our retail pubs were 76% of 20196 and up +49.1% vs
20207; food sales were 106% of 20196 and up +22.2% vs 20207; room
sales were 129% of 20196 and up +44.0% vs 20207. Occupancy was
81%.
-- For the 13 weeks to 25 September, same outlet like-for-like
tenanted pub income was 93% of 20196 and up +26.2% vs 20207.
-- For the 18 weeks to 30 October, total beer volume was 106% of
20196 and up +9.6% vs 20207. Own beer and cider volume was 93% of
20196 and up +1.6% vs 20207.
-- As at 1 November 2021 the Company exchanged contracts to sell
two hotels that no longer fit our portfolio for GBP5.75m to RedCat
Pub Company. This will complete in mid-November.
Jonathan Neame, CEO of Shepherd Neame said:
" We are greatly encouraged by the customer response since
re-opening and are confident that beer and pubs remain every bit as
core to British life as pre-pandemic.
We have spent the last year productively: building a better
business, strengthening our brand presence and maintaining our pubs
to be in optimal shape for reopening. Our relationships with our
licensees remain strong and we have few tenanted vacancies. We feel
we are in the best shape we can be, in the circumstances, and this
has resulted in a strong and sustainable recovery.
We face challenges ahead, particularly with supply chain and
inflationary pressures. That said, we are confident that the long
term fundamental drivers for the business remain strong, including
the ongoing infrastructure investment in our heartland, anticipated
local population growth, changes in consumer and workplace trends,
and our position at the centre of the community.
We have a solid platform and a clear plan to build on our
recovery, assisted by our strong balance sheet. For the rest of
this year, we remain focused on meticulous cost control, tight
cashflow management and further reducing net debt.
We look forward to 2022 with optimism and, with every day that
passes, confidence grows that we can not only recover lost ground,
but recover well, unlock growth opportunities and release the full
potential of the business.
We intend to return to prior levels of investment and restore
the dividend as soon as circumstances allow."
9 November 2021
Shepherd Neame Tel: 01795 532206
Jonathan Neame, Chief Executive
Mark Rider, Chief Financial Officer
Instinctif Partners Tel: 020 7457 2020
Matthew Smallwood
NOTES FOR EDITORS
Shepherd Neame is Britain's oldest brewer. Established in 1698,
with earlier origins and based in Faversham,
Kent it employs 1,475 people.
At the year end, the Company operated 310 pubs, of which 235
were tenanted or leased, 65 managed and 10 were held as investment
properties under commercial free of tie leases. The pub estate
ranges from inns and hotels to destination dining, great
traditional and local community pubs.
The Company brews, markets and distributes its own beers to
national and export customers under a range of highly successful
brand names including traditional classics such as Spitfire and
Bishops Finger as well as newer brands, such as Whitstable Bay,
Bear Island and Orchard View Cider.
The Company also has partnerships with Boon Rawd Brewery Company
for Singha beer, Thailand's original premium beer and with Boston
Beer Company for Samuel Adams Boston Lager and Angry Orchard Hard
Cider.
Shepherd Neame's shares are traded on the AQUIS Exchange Growth
Market.
See http://www.aquisexchange.com/ for further information and
the current share price.
For further information on the Company, see
www.shepherdneame.co.uk .
CHAIRMAN'S STATEMENT
OVERVIEW
When our pubs were allowed to welcome customers indoors on 17
May 2021, they had been closed for 296 of the last 421 days. It
would be hard to imagine worse circumstances. Indeed, it has been
pointed out that since brewing began on the Faversham site around
1573, there had never been a prolonged cessation of any part of our
business until March 2020.
The Company made a statutory loss before taxation of GBP(16.4)m
(2020 restated: loss of GBP(21.0)m) and an underlying loss before
taxation of GBP(10.1)m (2020 restated: loss of GBP(3.6)m). Revenue,
at GBP86.9m, was respectively -26% and -40% down on the levels in
2020 (restated) and 2019. As a result, there will be no dividend in
respect of this year.
The losses resulting from COVID-19 and the change in technical
requirements (in relation to accounting for leases) of the
International Financial Reporting Standards have impacted the
accumulated profits of the Company, as reflected in its net assets.
As a result, Net Asset Value per share has fallen to GBP11.40 (2020
restated: GBP12.47).
We are now moving forward with confidence. Trade since the
restart has been encouraging in all parts of the business; the
Statement of Financial Position remains strong and net debt is
reducing fast through good cash generation and targeted disposals;
we have a clear plan and the management and team spirit to execute
it; and we see new opportunities on the horizon. Whilst we are
likely to face further supply chain disruption in the short term,
the fundamental drivers for the business remain solid for the long
term and we look to the future with great enthusiasm.
In the face of such exceptional challenges, to comment on
successes may seem incongruous; but there are, in the board's view,
strong indicators that we have a solid platform for future
success.
First, the Company, in the sense of the teams of people who are
employees or, as licensees and other partners, work with Shepherd
Neame, has shown remarkable resilience. In the pubs, all concerned
worked diligently to ensure the safety of our customers, putting in
place social distancing, masks, sanitiser, and good ventilation
indoors in line with guidelines and best practice. The spirit of
those who have gathered at the brewery in recent weeks for the
first time, and of those working in the pubs, is upbeat and
positive. This is an encouraging reflection of the Company's
culture.
Second, the Company's three-legged strategy - retail pubs,
tenanted pubs, and brewing - has shown its value. There are
occasionally questions about the value of the combination of these
three areas of business, with other companies having separated
their brewing operations. The Board believes that this strategy has
been vindicated over the past two years, making the most of an
integrated brand but also in diversifying revenues and business
risk. In a period in which there was sharply reduced pub revenue,
beer revenue grew over the previous year. Grocery sales were
particularly strong.
Third, in being among the earliest pub companies to announce
that we would forgo tenants' rents, we helped to cement our
relationships with them and our reputation with the public. The
style of management in an individual pub is critical to it
thriving; every licensee contributes something to the idiocentric
atmosphere of his or her pub, and for the Company to maintain a
good relationship with all licensees and managers is part of the
recipe for success. In visiting the pubs since lockdown we have
been encouraged by the positive attitude to the Company that
licensees have.
Fourth, the senior management team has shown endless
adaptability and originality of thought in hard and exhausting
times. On behalf of shareholders, and of the Non-Executive members
of the Board, I thank them for their unfailing commitment and
dependability.
Fifth, a few lessons have been learned from managing pubs during
periods of partial opening. We have been able to make the most of
the outdoors. With limited capital spending, we have expanded on
the use of outdoor space, in particular by installing stretch
tents. We believe these will continue to be attractive to
customers. We are fortunate in having a strong rural and coastal
pub base to benefit from the increased custom that could come from
less commuting as well as from the presumed trend to warmer
weather. We have also been able to innovate with increased use of
booking and ordering systems and table service.
Finally, cost control has been meticulous. We have of course
benefited from the Government's Coronavirus Job Retention Scheme
(CJRS) and other support measures, as the Chief Executive's Review
sets out. This support, our own cost controls, and some judicious
property sales have enabled the Company to keep debt down during
loss-making periods. Net debt, excluding lease liabilities, was
GBP90.8m at the year-end, only GBP6.4m above the level in 2020.
Statutory net debt, including lease liabilities, was GBP149.1m at
the year-end (2020 restated: GBP140.3m. See note 7b to the
financial statements). These financial controls helped in the
renegotiation of our borrowing agreements, necessary because of
covenants dependent on cash flow.
MANAGEMENT AND GOVERNANCE
At the last AGM Miles Templeman stood down as Chairman after 15
years and as a Director after 18 years, as foreshadowed in last
year's report. During the first part of the COVID-19 and lockdown
crisis he was, as ever, a rock of calm, measured and wise counsel
to the Board and management. All the Board join me in wishing him
well after his long period with the Company.
We also reported in 2020 that Kevin Georgel would join as a
Non-Executive Director from the beginning of the financial year. As
Chief Executive of St Austell Brewery and former Chief Executive of
Admiral Taverns, his knowledge of the industry is already proving
immensely valuable.
The Board has appointed Hilary Riva to be Senior Independent
Director and I am grateful to her for taking this on.
Robin Duncan has retired after a marathon career in which he has
been a much-respected figure within the Company, and the Board is
grateful to Glenda Flanagan for stepping into his shoes as Company
Secretary.
Mark Rider has been appointed Chief Financial Officer and Nigel
Bunting will become Commercial Director once we have recruited a
Director of Retail Pub Operations; I and their colleagues on the
Board are grateful to them for assuming these roles.
We have continued our corporate governance progression by
adopting the Quoted Companies Alliance Corporate Governance Code
(QCA Code) and by transitioning our accounting standards from FRS
102 to IFRS (International Financial Reporting Standards). IFRS are
now regarded as the accepted accounting standards for publicly
listed companies and we feel that this move is appropriate for us
as technically a private company with a stock market listing.
AUDITORS
Regular review of the role of auditors is a necessary part of
good governance. The Audit Committee conducted a review and tender
during the year and decided to appoint BDO LLP as auditors in place
of Deloitte LLP, who had been the Company's auditors since 2009. We
thank Deloitte LLP and the team there for their service and we look
forward to working with BDO LLP.
DIVID POLICY
The Board very much appreciates the importance of dividends to
our shareholders and is determined to return to payment of a
dividend as soon as it is prudent to do so. When this time comes,
we expect to resume broadly the same policy as in the past:
dividend cover at or above two times underlying earnings.
OUTLOOK
Our aims are straightforward. We want people to come to our
pubs, drink our beer and enjoy our food, accommodation and general
hospitality. We want them to tell others about it and come back for
more. The past year has emphasised how important pubs, and
breweries, are to their communities. Shepherd Neame is rooted in
the community - indeed, several sorts of community: the community
of Faversham where the brewery and head office are significant
landmarks, the particular community surrounding every pub, and the
community of customers who enjoy Shepherd Neame brands. Pub and
brewing operators are by their nature strong businesses which form
part of Britain's social fabric, and Shepherd Neame is a proud
member of the community of such businesses.
The foundations of our own business are strong. We look ahead to
recovery and renewed strength, chastened by the problems of the
last year. We are cautious about challenges to the supply chain and
the inflationary impacts this will bring, but above all, we are
positive and optimistic that we have the people, the assets, and
the culture to bring future success.
RICHARD OLDFIELD
Chairman
CHIEF EXECUTIVE'S REVIEW
OVERVIEW
The last financial year has proved every bit as challenging as
the prior year, and has been equally dominated by COVID-19
uncertainty. However, we are greatly encouraged by the customer
response since re-opening, and are confident that beer and pubs
remain every bit as core to British life as before the
pandemic.
After the optimism of the summer of 2020, when hospitality was
re-opened following Lockdown 1, we then faced increasing
restrictions through the autumn of 2020, such that the majority of
our pubs ended up being shut for half the financial year; in fact
it is only in recent weeks that some London pubs have re-opened for
the first time since March 2020.
It is no wonder therefore that the Company has recorded a
significant loss for the year, albeit this is less than originally
anticipated.
Throughout this period, we have set out to do the right thing
for our people and our licensees, and to protect the business and
its assets so that we are in the best possible position to bounce
back strongly.
I am extremely proud of the way that our teams throughout the
business have handled the crisis and responded with great energy
and enthusiasm during the summer, in spite of many logistical and
operational challenges during the re-opening phase.
I believe that we have achieved our goals during the year and
now look forward to the re-build phase with great optimism.
THE IMPACT OF COVID-19 RESTRICTIONS
The financial year started on 28 June 2020. Pubs were not
allowed to re-open until 4 July 2020. We then had a phased
re-opening through July and early August, of all but our central
London and city pubs. We traded well through this period, helped in
part by the Eat Out to Help Out (EOTHO) scheme. However, as we
moved into the autumn, measures were introduced to reduce social
contact, including curfews, the requirement to eat a meal in a pub,
and other regional restrictions.
This ended in a further lockdown on 5 November for four weeks.
Approximately one quarter of our pubs were able to re-open on 3
December, but this lasted for anything from a few days to three
weeks, after which the country was again placed in national
lockdown until 12 April 2021. Restrictions were lifted to allow
outdoor trading only from 12 April to 17 May, when indoor trade was
permitted. All legal restrictions were lifted on 19 July 2021,
after a delay from the originally proposed date of 21 June.
PERFORMANCE FOR THE YEAR TO JUNE 2021
Throughout the whole of the COVID-19 crisis we have maintained
the production of beer. Total beer volumes have been resilient and
we have supplied record volumes to the grocery trade. Export trade
has continued to be good, although impacted at times by the closure
of many of our markets and the UK's exit from the EU in the early
part of 2021. This trade has recovered since.
Our pubs traded strongly in the summer of 2020 and again in the
spring of 2021, with particularly good performance from food and
accommodation, when trading restrictions were eased. We did not
charge our licensees any rent during periods of closure, but
re-introduced rent on a phased basis whilst restrictions remained
in place until August 2021, after which normal rent was applied in
full.
Total revenue for the year was GBP86.9m (2020 restated:
GBP118.2m), down -26% on 2020. Total revenue in the Tenanted Pubs
division was down -33.5%, in Retail Pubs down -40.9% vs 2020, but
we achieved growth in the Brewing and Brands business of +1.0%.
Overall the Company generated GBP7.7m of underlying EBITDA (2020
restated: GBP13.6m), but fell to an underlying operating loss of
GBP(4.2)m (2020 restated: profit of GBP1.5m). Statutory operating
loss was GBP(10.5)m (2020 restated: GBP(16.0)m).
Statutory loss before tax was GBP(16.4)m (2020 restated: loss of
GBP(21.0)m). Underlying loss before tax was GBP(10.1)m (2020
restated: GBP(3.6)m).
TRADE SINCE RE-OPENING
On 12 April we re-opened over two thirds of our pubs and the
customer response was immediate. We experienced strong demand as
friends and family wanted to re-connect in pub gardens, in spite of
bitterly cold but sunny conditions. As soon as indoor opening was
allowed on 17 May, trade increased materially and food and
accommodation trade has remained strong ever since.
For the 11 weeks from 12 April to 26 June, retail pubs and
hotels that were open achieved 84% of their 2019 [8] revenue. Total
retail sales were 60% of their 2019 levels, as 15 pubs in central
London remained closed. For the initial period from 12 April to 16
May, open pubs achieved 62% of 2019 sales and from 17 May, when
indoor trading resumed, to the year end on 26 June, those same
sites achieved 97% of 2019 sales.
For the 11 weeks from 12 April to 26 June, tenanted pubs
achieved 77% of their 2019 volume. For the four weeks of June, they
achieved 91% of their 2019(8) beer volumes. After paying no rent
for all the weeks of lockdown, our tenanted pubs returned to 90% of
normal rent as from 21 June and to full rent from 2 August
2021.
Total beer volume has been resilient throughout the pandemic. We
have obtained new on-trade customers since re-opening and new
listings in other channels. Total volume in all channels was +8.4%
in May and June versus 2019(8) and total own beer volume, excluding
contract, was down -3.6% for the same period.
The third wave of infections, the "pingdemic" and the delay in
lifting restrictions to 19 July, slowed demand somewhat in July,
but confidence returned in August as accommodation and food
performed strongly.
GOVERNMENT SUPPORT
During this financial year, the Company has received GBP15.0m
(2020: GBP6.1m) of overall support in various forms from the
Government, which flows through our numbers. The largest of these
is furlough support, which amounted to GBP9.3m during this
financial year (2020: GBP5.0m). At one stage, 97% of the total team
was on furlough. Whilst this support enabled us to protect the
majority of jobs, we did have to undertake a redundancy process
which resulted in an approximate 10% reduction in roles.
We received business grants that totalled GBP2.8m (2020:
GBP0.5m). Additional support was received through the cancellation
of business rates (2021: GBP2.9m; 2020: GBP0.6m) and a reduction in
VAT on food, accommodation and soft drinks, to 5% for the periods
we have been allowed to trade.
As at the end of September 2021, all furlough support has
ceased; business rates support runs through until the end of March
2022; the temporary reduction in VAT to 5% has started to unwind
and is now 12.5% from 1 October through to the end of March 2022.
The industry is lobbying for permanent re-alignment of business
rates, excise duties and VAT.
NET DEBT
In spite of making a loss, the Company has managed its net debt
and cash flow tightly.
Statutory net debt, including lease liabilities, was GBP149.1m
at the year-end (2020 restated: GBP140.3m). Net debt, excluding
lease liabilities, was GBP90.8m (2020 restated: GBP84.5m). At the
end of the 2020 financial year, GBP11.0m in excise duty and VAT was
deferred, in agreement with HMRC. This balance had reduced to
GBP2.4m at June 2021 and will be settled over the coming year. All
rent arrears to our landlords have been met, following constructive
discussions with the majority.
We have managed our cost base prudently during this time and we
have restricted capital expenditure to GBP3.9m (2020: GBP12.3m;
2019: GBP19.3m).
Our net debt position has been helped by cash from disposals.
The property market has remained good and we have disposed of two
pubs (2020: two) and 12 (2020: six) investment properties for total
proceeds of GBP4.5m (2020: GBP1.6m).
FINANCING AND REVALUATION
Prior to the pandemic we had total committed facilities of
GBP107.5m. In July 2020, we secured a GBP25.0m revolving credit
facility from our banking lenders, Lloyds Bank plc and Santander
plc, utilising the Government's Coronavirus Large Business
Interruption Lending Scheme (CLBILS), of which GBP15.0m was
committed and a further GBP10.0m was available on request. In April
2021, in the light of the extended lockdown, new covenant waivers
were agreed with our lenders. Normal covenant tests were relaxed
through to September 2022, and have been replaced with minimum
liquidity covenants.
The Company has not drawn on its CLBILS facility during the
year. This robust financial position is now underpinned by the
revaluation of our licensed premises, carried out as at 26 June
2021, which indicates a surplus over book value of GBP35.9m, or
+13%. As our freehold properties are carried at cost less
accumulated depreciation and any impairment in value, this increase
in value is not reflected in these financial statements.
Taken together, the Company has ample liquidity for the
foreseeable future and retains a strong balance sheet. We have not
raised equity from shareholders. The primary focus now is to return
underlying EBITDA to prior levels, to restore our previously lower
levels of leverage, and thereby return to within pre-pandemic
covenants, during this financial year.
INVESTMENT
We completed the major development at The Wharf in Dartford that
was under construction when the pandemic hit, and installed a new
yeast propagation plant that had been previously committed.
In addition we have made a limited number of other targeted
investments. These include around 30 projects to install stretched
tents to create attractive covered external areas at our pubs, the
final payment on the pub site at Ebbsfleet, and certain minor
investments in the brewery.
To ensure that the business is best placed to recover quickly,
we have maintained our pubs to a high standard and have continued
our roll out programme of external decoration and signage schemes.
Two thirds of our pubs now have the newer signage scheme and we are
on track to complete the whole estate within two years. We have
continued to invest in our marketing, brands and communication.
BUILDING BACK BETTER
Throughout the pandemic, we have been focussed on ensuring that
the Company is in the best possible shape to recover fast and be
well placed to take advantage of any opportunities that
subsequently arise.
In our pubs, food has been a major driver of our recovery and
returned quickly to prior levels. We have developed our offer
further with expanded dishes, pizza offers and more vegetarian,
vegan and lower-calorie options.
We have benefited greatly from the restrictions on international
travel and the staycation summer. We are very pleased with how low
the turnover of licensees has been, and we see this as a reflection
of the strong relationships we enjoy.
We have spent time on building better brands for the future. We
have introduced more craft beers to our pub list; have developed a
0.5% low-alcohol beer under the Noughty Bear brand; have added the
Truly Hard Seltzer range to the portfolio, which has seen great
success in the US; and have partnered with Canterbury-based
cider-maker Kentish Pip to introduce a bespoke range of local
ciders.
Towards the end of 2019, we formed a partnership with the
BoonRawd Brewery of Thailand to distribute Singha beer in the UK.
This has already been successful and has grown volume despite the
on-trade being shut for large parts of this time. We are optimistic
about the potential for this brand in the UK, in spite of incurring
high international freight costs at this time.
We have also developed a number of key new partnerships to
support our brand work. Locally, we were delighted to be the
Official Beer provider of The Open at The Royal St George's Golf
Club. Other events and festivals returned towards the end of the
summer and we partnered with organisations such as Dreamland in
Margate, Live Nation and many other festival organisers throughout
the country. We had a particularly strong presence of the Bear
Island range at the Gone Wild Festival in Devon.
BUILDING A STRONG TEAM
Throughout the pandemic, we have worked hard to keep our teams
together and engaged in the business. We supported those on
furlough as best we could and maintained regular communications,
providing training as appropriate and on going support for mental
health and physical wellbeing.
Our support for our people has been richly rewarded with an
excellent response since re-opening, and great energy and
enthusiasm for all the difficult challenges we have faced. We have
a loyal, dedicated and experienced team. Thankfully, we do not seem
to have faced the extreme staff shortages that some operators have
encountered, albeit it has been difficult at times. So far we have
been able to recruit in most roles when vacancies occur, although
finding chefs and kitchen staff remains challenging. Such skills
shortages are expected to last for some time and may lead to higher
costs of employment. All employees are paid above the national
minimum wage.
As we emerge from the pandemic, we have made some management
changes and created a new Operations Committee in place of the
separate Pubs and Brewing & Brands Committees, to provide a
single point of focus for our decision-making. We have introduced
new members to the senior team: specifically Kate Ware, who joined
as Head of People following Robin Duncan's retirement.
During the coming year, Nigel Bunting will become Commercial
Director with overall responsibility for all sales, brewing,
procurement and logistics operations in the Brewing and Brands
business. We have commenced recruitment for a Director of Retail
Pubs.
RECOGNISING OUR ACHIEVEMENTS
Our response to the pandemic has been widely commended by our
customers. We have tried to maintain a high profile throughout and
to communicate as clearly and regularly as possible to all our
stakeholders.
The feedback has generally been positive and our audiences and
engagement on all social channels have grown materially. We hope
that this goodwill and high recognition will benefit the Company in
the years ahead.
In this regard, it is also pleasing that our efforts continue to
be recognised in multiple awards for our beers and pubs: most
notably the Good Pub Guide Brewery of the Year 2021 and a CAMRA
Golden Award. We were delighted that our 1698 Strong Ale was the UK
winner in the International Beer Awards for strong pale ale.
CONSUMER TRS
There has been much comment during the pandemic about changes in
lifestyle and shifts in consumer behaviour. From what we can see so
far from the trade over the summer, such changes may be marginal,
or rather an acceleration of changes already happening.
We have seen continued growth in food and accommodation sales
and an on-going shift from on-trade beer consumption to off-trade
beer consumption. But many of these trends have been in place for a
number of years. The consumer is increasingly looking to make
healthy choices and purchase lower-alcohol products.
In many situations, consumers appear to value the quality of the
experience, and are seeking premium products. Our whole focus
therefore is to ensure that they can enjoy a rewarding and
differentiated experience in our pubs.
Hybrid working does look as though it is here to stay, with
employees going to the office only two or three days per week. This
is providing city-centre pubs with a mid-week boost but a quieter
Monday and Friday. Thus far, we have been encouraged by trade
levels in the City of London, which are above expectations, albeit
some way below 2019 levels.
In time, it is likely that city centres will evolve into hybrid
work and residential spaces, resulting in enhanced weekend trade.
Many high streets are already evolving to become more
pedestrianised, stimulating al fresco hospitality. Meanwhile
suburbs and villages are seeing more footfall than they did
historically during the week, and many of our pubs in these areas
have achieved record sales over the summer.
Overall, we feel these emerging trends play to our strengths and
provide us with growth opportunities for the future.
DOING THE RIGHT THING FOR OUR COMMUNITIES
Over the years up to the pandemic, we had built a strong
platform for the business. It is our priority to restore prior
levels of financial success and return to growth. But we must do so
in a way that recognises the impact our activities have on our
environment and the wider community. We have always prided
ourselves on the positive contribution we make to Faversham and the
communities our pubs support. Nevertheless, we are ever more
mindful that over the coming years we must develop new ways to
reduce carbon and waste to ensure our long-term success. We are
working on plans to this effect.
SUPPLY CHAIN CHALLENGES
Consumer demand to return to the great British pub has never
been in doubt and most customers have been delighted by the
experience they have enjoyed.
However, our teams have battled throughout this re-opening phase
with unforeseen staffing, supply chain and logistics challenges. At
various times, we had temporary pub closures due to staff members
being "pinged" by Test and Trace. This has compounded a
pre-existing shortage of key hospitality workers. At other times,
key supplies such as building materials, process gases such as CO2
or other key materials, have been in short supply or have been
subject to material price inflation. However, our practice of
supporting local suppliers where possible has enabled the Company
to avoid some of the extreme shortages experienced by other
operators.
Most suppliers have experienced severe logistics challenges due
to shortages of HGV drivers, and in August 2021 we were threatened
with industrial action affecting our logistics partner GXO
(formerly XPO, formerly KNDL). Thankfully industrial action was
averted, but this impacted supply for several weeks at a period of
high demand, resulting in additional direct costs in the region of
GBP0.25m.
Many have worked long hours to help the Company get back on its
feet and trade successfully through these issues.
CURRENT TRADING
The start of the new financial year has been encouraging. Demand
for food and accommodation, in particular, has been strong since
July. Some consumers curtailed their going out as restrictions were
extended from June in to July, but once they were lifted, demand
accelerated in August and into September.
As schools returned, we saw a pickup in activity in our
city-based pubs, and remain optimistic that they will recover in
full in due course. Outside London, traditional pub trade is
returning. At this stage, all the indications are that we will have
a strong Christmas trading period.
For the 18 weeks from 27 June to 30 October, same outlet
like-for-like sales in retail pubs were 91% of 2019 [9] and up
+37.0% vs 2020(9) . For the 9 weeks to 30 October, same outlet
like-for-like sales in retail pubs were 99% of 2019(9) and up
+26.4% vs 2020(9) . This is inclusive of the benefit of the
temporary VAT reduction.
For the 13 weeks from 27 June to 25 September, same outlet
like-for-like tenanted pub income was 93% of 2019(9) and up +26.2%
vs 2020(9) . For the four weeks to 27 September, same outlet
like-for-like tenanted pub income was 99% of 2019(9) and up +17.3%
vs 2020(9) . For the 18 weeks to 30 October, total beer volume was
106% of 2019(9) and up +9.6% vs 2020(9) . Own beer volume was 93%
of 2019(9) and up +1.6% vs 2020(9) . For the 9 weeks to 30 October,
total beer volume was 104% of 2019(9) and up +15.4% vs 2020(9) .
Own beer volume was 94% of 2019(9) and up +4.8% vs 2020(9) .
POST YEAR
The balance sheet position has been enhanced since the year end,
through good trading and the sale of two hotels that no longer fit
our portfolio.
We have sold The Royal Wells in Tunbridge Wells and the
Conningbrook in Ashford, for total consideration of GBP5.75m. Both
hotels rely on business trade and therefore have a different
profile from our coastal hotels which target the leisure market.
Our coastal hotels remain core to the operation and have performed
very well since re-opening.
THE YEAR AHEAD
We enter the winter months with a degree of caution after the
turmoil of the last year when the second wave of COVID-19 took
hold. But the vaccination programme appears to have been a success
and has given consumers the underlying confidence to re-connect
again. Clearly we hope that there will be no further requirement
for lockdowns, nor the introduction of any other restrictions that
impact hospitality but not other non-essential retail.
We remain confident about demand, but the inflation outlook is
much less certain, as we anticipate on-going price rises from
various vendors and skills shortages in parts of the supply chain.
We anticipate materially higher costs in freight, logistics, input
prices and energy. We are working hard to ensure that our customers
remain supplied and that we mitigate as much cost pressure as
possible, but anticipate these cost pressures will continue for a
while yet.
Assuming that we do not experience further disruption, our plan
is to run the business as tightly as possible, throughout the rest
of the financial year, to generate free cash and so restore
leverage back to the pre-pandemic lower levels. In due course we
aim to resume our prior levels of inward investment in the business
and restore a dividend.
SUMMARY
We have a great business platform and the balance sheet remains
strong. We can now look forward to 2022 with optimism and, with
every day that passes, confidence grows that we can not only
recover lost ground, but recover well, unlock growth opportunities
and release the full potential of the business.
We have identified many opportunities to develop our beer and
pubs businesses further. With the work that we are putting in to
develop our marketing and brand partnerships, and the strength of
our pub business, we feel increasingly confident that we will
bounce back strongly and achieve full recovery to prior levels over
the next two years.
Many parts of the economy have taken a battering from the
pandemic, in particular hospitality, but the housebuilding and
Infrastructure development that has been a feature of the Kent
economy now for a number of years, has continued unabated. Thus we
see many opportunities arising in coming years for transformational
pub developments.
A BIG THANK YOU
Our teams have demonstrated that they are extremely resilient,
resourceful and entrepreneurial people. Many have worked long
hours, but with great enthusiasm, to help the Company get back on
its feet and trade successfully through these issues. That can-do
attitude is recognised by suppliers and customers alike, and will
undoubtedly lead us to a successful future. The spirit of Shepherd
Neame is alive and well.
As well as paying tribute to our team members, I would like to
thank my Board colleagues and the senior management team for their
wisdom, leadership and support; and in particular I thank Richard
for his guidance and great personal encouragement.
Finally I would like to thank our customers and shareholders for
their support in helping us through this crisis.
JONATHAN NEAME
Chief Executive
GROUP INCOME STATEMENT 52 weeks ended 26 June 2021
52 weeks to 27 June 2020
52 weeks to 26 June 2021 Restated
Items Items
excluded excluded
from Total from
Underlying underlying s tatu Underlying underlying Total
results results t ory results results statutory
note GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------------- ------- -------------- --------------------- --------- -------------- --------------------- ------------
Revenue 1,2 86,884 - 86,884 118,207 - 118,207
Other income 2,839 - 2,839 450 - 450
Operating
charges (93,963) (6,307) (100,270) (117,142) (17,515) (134,657)
-------------- ------- -------------- --------------------- --------- -------------- --------------------- ------------
Operating
(loss)/profit 1 (4,240) (6,307) (10,547) 1,515 (17,515) (16,000)
Net finance
costs (5,817) (471) (6,288) (5,155) (185) (5,340)
Fair value
movements on
financial
instruments
charged to
profit and
loss - 115 115 - 35 35
-------------- ------- -------------- --------------------- --------- -------------- --------------------- ------------
Total net
finance costs (5,817) (356) (6,173) (5,155) (150) (5,305)
Profit on
disposal of
property 3 - 221 221 - 274 274
Investment
property fair
value
movements 3 - 87 87 - 50 50
-------------- ------- -------------- --------------------- --------- -------------- --------------------- ------------
Loss before
taxation (10,057) (6,355) (16,412) (3,640) (17,341) (20,981)
Taxation 4 1,868 (3,247) (1,379) 449 1,141 1,590
-------------- ------- -------------- --------------------- --------- -------------- --------------------- ------------
Loss after
taxation (8,189) (9,602) (17,791) (3,191) (16,200) (19,391)
-------------- ------- -------------- --------------------- --------- -------------- --------------------- ------------
Loss per 50p
ordinary
share 6
Basic (120.5)p (131.6)p
Diluted (120.5)p (131.6)p
-------------- ------- -------------- --------------------- --------- -------------- --------------------- ------------
All results are derived from continuing activities.
GROUP STATEMENT OF COMPREHENSIVE INCOME 52 weeks ended 26 June
2021
52 weeks 52 weeks
ended 26 ended 27
June 2021 June 2020
GBP'000 GBP'000
-------------------------------------------- ---------- ----------
Loss after taxation (17,791) (19,391)
Items that may be reclassified subsequently
to profit and loss:
Gains/(losses)arising on cash flow hedges
during the period 1,605 (96)
Income tax relating to these items (166) 123
Items that will not be reclassified
subsequently to profit and loss:
Unrealised gain on revaluation of property 31 17
Other comprehensive gains 1,470 44
----------------------------------------------- ---------- ----------
Total comprehensive loss (16,321) (19,347)
----------------------------------------------- ---------- ----------
GROUP STATEMENT OF FINANCIAL POSITION
As at 26 June 2021
Restated Restated
Group Group Group
26 June 2021 27 June 2020 29 June
2019
GBP'000 GBP'000 GBP'000
--------------------------------- --------------- ----------------- ---------
Non-current assets
Goodwill and intangible
assets 328 674 760
Property, plant and equipment 285,063 297,297 302,541
Investment properties 6,068 8,811 8,309
Other non-current assets 5 5 10
Right-of-use assets 47,311 46,262 58,037
------------------------------------ --------------- ----------------- ---------
338,775 353,049 369,657
--------------------------------- --------------- ----------------- ---------
Current assets
Inventories 7,320 8,230 7,111
Trade and other receivables 15,360 10,329 13,570
Cash and cash equivalents 5,560 9,807 -
Assets held for sale 2,419 850 485
------------------------------------ --------------- ----------------- ---------
30,659 29,216 21,166
--------------------------------- --------------- ----------------- ---------
Current liabilities
Trade and other payables (26,383) (27,846) (22,827)
Borrowings (1,600) (94,262) (2,082)
Income tax payable - - (269)
Lease liabilities (5,100) (5,360) (3,953)
------------------------------------ --------------- ----------------- ---------
(33,083) (127,468) (29,131)
--------------------------------- --------------- ----------------- ---------
Net current liabilities (2,424) (98,252) (7,965)
------------------------------------ --------------- ----------------- ---------
Total assets less current
liabilities 336,351 254,797 361,692
------------------------------------ --------------- ----------------- ---------
Non-current liabilities
Lease liabilities (53,226) (50,500) (52,604)
Borrowings (94,765) - (81,160)
Derivative financial instruments (5,414) (7,107) (6,822)
Provisions (498) (498) -
Deferred tax liabilities (13,101) (11,456) (12,990)
------------------------------------ --------------- ----------------- ---------
(167,004) (69,561) (153,576)
--------------------------------- --------------- ----------------- ---------
Net assets 169,347 185,236 208,116
------------------------------------ --------------- ----------------- ---------
Capital and reserves
Share capital 7,429 7,429 7,429
Share premium account 1,099 1,099 1,099
Revaluation reserve 31 17 -
Own shares (1,010) (1,328) (1,551)
Hedging reserve (3,524) (4,963) (4,990)
Retained earnings 165,322 182,982 206,129
------------------------------------ --------------- ----------------- ---------
Total equity 169,347 185,236 208,116
------------------------------------ --------------- ----------------- ---------
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY 5 2 weeks ended 26
June 2021
Share
Share premium Revaluation Own Hedging Retained
capital account reserve shares reserve earnings Total
----------------
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
---------------- -------- -------------- ------------- --------------- ------------- ------------- -------------
Balance at 29
June 2019 7,429 1,099 71,858 (1,551) (4,990) 134,252 208,097
Changes on
transition to
IFRS - - (71,858) - - 71,877 19
---------------- -------- -------------- ------------- --------------- ------------- ------------- -------------
Balance at 29
June 2019 as
restated 7,429 1,099 - (1,551) (4,990) 206,129 208,116
Loss for the
financial year - - - - - (19,391) (19,391)
Losses arising
on cash flow
hedges during
the year - - - - (96) - (96)
Gains on
revaluation of
property,
plant and
equipment - - 17 - - - 17
Tax relating to
components
of other
comprehensive
income - - - - 123 - 123
---------------- -------- -------------- ------------- --------------- ------------- ------------- -------------
Total
comprehensive
income/(loss) - - 17 - 27 (19,391) (19,347)
Ordinary
dividends paid - - - - - (3,573) (3,573)
Accrued
share-based
payments - - - - - 317 317
Purchase of own
shares - - - (290) - - (290)
Distribution of
own shares - - - 353 - (340) 13
Unconditionally
vested share
awards - - - 160 - (160) -
---------------- -------- -------------- ------------- --------------- ------------- ------------- -------------
Balance at 27
June 2020 as
restated 7,429 1,099 17 (1,328) (4,963) 182,982 185,236
Loss for the
financial year - - - - - (17,791) (17,791)
Gains arising on
cash flow
hedges during
the year - - - - 1,605 - 1,605
Gains on
revaluation of
property,
plant and
equipment - - 31 - - - 31
Tax relating to
components
of other
comprehensive
income - - - - (166) - (166)
Total
comprehensive
income/(loss) - - 31 - 1,439 (17,791) (16,321)
Revaluation
reserve
realised
on disposal of
properties - - (17) - - 17 -
Accrued
share-based
payments - - - - - 428 428
Distribution of
own shares - - - 125 - (121) 4
Unconditionally
vested share
awards - - - 193 - (193) -
---------------- -------- -------------- ------------- --------------- ------------- ------------- -------------
Balance at 26
June 2021 7,429 1,099 31 (1,010) (3,524) 165,322 169,347
---------------- -------- -------------- ------------- --------------- ------------- ------------- -------------
GROUP STATEMENT OF CASH FLOWS 52 weeks ended 26 June 2021
Restated
52 weeks 52 weeks
ended ended
26 June 27 June
2021 2020
GBP'000 GBP'000 GBP'000 GBP'000
-------------------------------------------------- ------- -------------- -------- ------------
Cash flows from operating activities (note
7)
Cash generated from operations 1,630 19,182
Income taxes received/(paid) 195 (185)
------- --------
Net cash generated by operating activities 1,825 18,997
Cash flows from investing activities
Proceeds from disposal or property, plant
and equipment and investment properties 4,526 1,752
Purchase of property, equipment and lease
premiums (3,878) (12,025)
Purchase of intangible assets - (92)
Customer loan redemptions 1 2
Acquisition of subsidiaries - (151)
------- --------
Net cash used in investing activities 649 (10,514)
Cash flows from financing activities
Dividends paid - (3,573)
Interest paid (4,796) (3,211)
Payment of principal portion of lease liabilities (3,930) (2,533)
Proceeds from borrowings 2,000 13,000
Purchase of own shares - (290)
Share option proceeds 5 13
------- --------
Net cash generated by financing activities (6,721) 3,406
-------------------------------------------------- ------- -------------- -------- ------------
Net movement in cash and cash equivalents (4,247) 11,899
Cash and cash equivalents at beginning of
the period 9,807 (2,082)
-------------------------------------------------- ------- -------------- -------- ------------
Cash and cash equivalents at end of the period 5,560 9,807
-------------------------------------------------- ------- -------------- -------- ------------
NOTES TO THE ACCOUNTS 26 June 2021
1 Segmental reporting
The accounting policy for identifying segments is based on
internal management reporting information that is regularly
reviewed by the Chief Operating Decision Maker (CODM).
The Group has three operating segments, which are largely
organised and managed separately according to the nature of the
products and services provided and the profile of their
customers:
-- Brewing and Brands which comprises the brewing, marketing and
sales of beer and other products;
-- Retail Pubs; and
-- Tenanted Pubs which comprises pubs operated by third parties
under tenancy or tied lease agreements.
Transfer prices between operating segments are set on an
arm's-length basis.
As segment assets and liabilities are not regularly provided to
the CODM, the Group has elected, as provided under IFRS 8 Operating
Segments (amended), not to disclose a measure of segment assets and
liabilities.
Brewing Retail Tenanted
and Brands Pubs Pubs Unallocated Total
52 weeks ended 26 June 2021 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------------------------------- ------------------ --------- ------------- ----------- -------------
Revenue and other income 42,018 29,907 16,748 1,050 89,723
--------------------------------------- ------------------ --------- ------------- ----------- -------------
Underlying operating (loss)/profit (1,287) 983 2,343 (6,279) (4,240)
Items excluded from underlying
results - (4,816) (562) (929) (6,307)
--------------------------------------- ------------------ --------- ------------- ----------- -------------
Divisional operating (loss)/profit (1,287) (3,833) 1,781 (7,208) (10,547)
Net underlying finance costs (5,817)
Finance costs excluded from underlying
results (471)
Fair value movements on ineffective
elements of cash flow hedges 115
Profit on disposal of property 221
Investment property fair value
movements 87
--------------------------------------- ------------------ --------- ------------- ----------- -------------
Loss before taxation (16,412)
--------------------------------------- ------------------ --------- ------------- ----------- -------------
Other segment information
Capital expenditure - tangible
and intangible assets 779 1,494 847 123 3,243
Depreciation and amortisation pre
IFRS 16 1,662 3,280 2,698 386 8,026
Depreciation and amortisation 1,752 4,629 4,248 481 11,110
Impairment of property, plant and
equipment, goodwill and assets
held for sale - 3,407 352 331 4,090
Impairment of right-of-use assets - 1,409 210 - 1,619
Underlying divisional EBITDA pre
IFRS 16 449 2,855 5,150 (5,732) 2,722
Underlying divisional EBITDA 546 6,184 6,616 (5,636) 7,710
Number of pubs - 65 235 10 310
Brewing Retail Tenanted
and Brands Pubs Pubs Unallocated Total
52 weeks ended 27 June 2020 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------------------------------- ----------------- --------- ------------- ----------- -------------
Revenue and other income 41,594 50,642 25,181 1,240 118,657
--------------------------------------- ----------------- --------- ------------- ----------- -------------
Underlying operating (loss)/profit (249) 2,872 6,957 (8,065) 1,515
Items excluded from underlying
results - (12,297) (3,291) (1,927) (17,515)
--------------------------------------- ----------------- --------- ------------- ----------- -------------
Divisional operating (loss)/profit (249) (9,425) 3,666 (9,992) (16,000)
Net underlying finance costs (5,155)
Finance costs excluded from underlying
results (185)
Fair value movements on ineffective
elements of cash flow hedges 35
Profit on disposal of property 274
Investment property fair value
movements 50
--------------------------------------- ----------------- --------- ------------- ----------- -------------
Loss before taxation (20,981)
--------------------------------------- ----------------- --------- ------------- ----------- -------------
Other segment information
Capital expenditure - tangible
and intangible assets 1,126 6,730 3,984 720 12,470
Depreciation and amortisation pre
IFRS 16 1,702 3,413 2,712 528 8,355
Depreciation and amortisation 1,793 5,430 3,968 625 11,816
Impairment of property, plant and
equipment, goodwill and assets
held for sale - 5,556 1,150 483 7,189
Impairment of right-of-use assets - 6,741 2,141 - 8,882
Underlying divisional EBITDA pre
IFRS 16 1,459 5,998 9,713 (7,495) 9,675
Underlying divisional EBITDA 1,571 8,382 10,989 (7,392) 13,550
Number of pubs - 69 234 16 319
Net underlying finance costs include IFRS16 related interest
costs of GBP1,285,000 (2020: GBP1,298,000) meaning pre IFRS 16 net
finance costs were GBP4,532,000 (2020: GBP3,857,000).
Geographical information
An analysis of the Group's revenue by geographical
market is set out below:
52 weeks ended 52 weeks
ended
26 June 2021 27 June
2020
GBP'000 GBP'000
---------------------------------------------------- ---------------- ----------
Revenue
UK 84,606 116,083
Rest of the World 2,278 2,124
---------------------------------------------------- ---------------- ----------
86,884 118,207
---------------------------------------------------- ---------------- ----------
2 Revenue
An analysis of the Group's revenue by category
is as follows:
52 weeks
52 weeks ended ended
27 June
26 June 2021 2020
GBP'000 GBP'000
-------------------------------------------------- ---------------- ----------
Sale of goods and services(1) 83,707 111,568
Rental income 3,177 6,639
Revenue 86,884 118,207
-------------------------------------------------- ---------------- ----------
(1) Revenue includes GBP609,000 received from the Government
under the Eat Out to Help Out Scheme.
3 Non-GAAP reporting measures
Certain items recognised in reported profit or loss before tax
can vary significantly from year to year and therefore create
volatility in reported earnings which does not reflect the
underlying performance of the Group. The Directors believe that
'underlying operating profit', 'underlying profit before tax',
'underlying basic earnings per share', 'underlying earnings before
interest, tax, depreciation, and amortisation' as presented provide
a clear and consistent presentation of the underlying performance
of the ongoing business for shareholders. Underlying profit is not
defined by IFRS and therefore may not be directly comparable with
the 'adjusted' profit measures of other companies. The adjusted
items are:
-- Profit or loss on disposal of properties;
-- Investment property fair value movements;
-- Operating and finance charges which are either material or
infrequent in nature and do not relate to the underlying
performance;
-- Fair value movements on financial instruments charged to profit and loss; and
-- Taxation impacts of the above (see note 4)
52 weeks 52 weeks
ended ended
----------------------------------------------------------
26 June 27 June
2021 2020
----------------------------------------------------------
GBP'000 GBP'000
---------------------------------------------------------- -------- -----------
Underlying EBITDA 7,710 13,550
Depreciation and amortisation (11,110) (11,816)
Free trade loan discounts - (3)
Loss on sale of assets (excluding property) (840) (216)
---------------------------------------------------------- -------- -----------
Underlying operating (loss)/profit (4,240) 1,515
Net underlying finance costs pre IFRS 16 (4,532) (3,857)
---------------------------------------------------------- -------- -----------
Net underlying finance costs (5,817) (5,155)
---------------------------------------------------------- -------- -----------
Underlying loss before taxation (10,057) (3,640)
Profit on disposal of properties 221 274
Investment property fair value movements 87 50
Separately disclosed operating charges:
Impairment of intangible assets, properties, right-of-use
assets and assets held for sale (5,709) (16,071)
Restructuring costs (709) -
Other operating charges excluded from underlying results 111 (1,444)
Separately disclosed finance costs:
Cost related to putting in place CLBILS loan (201) (185)
Costs relating to the agreement of covenant waivers with
our lenders (270) -
Fair value movements on financial instruments charged
to profit and loss 115 35
---------------------------------------------------------- -------- -----------
Loss before taxation (16,412) (20,981)
---------------------------------------------------------- -------- -----------
Separately disclosed operating charges:
a) An impairment charge of GBP5,709,000 (2020: GBP16,071,000) in
relation to 14 freehold properties and 17 right-of-use assets.
b) A charge of GBP709,000 in respect of restructuring costs.
c) A recovery of GBP111,000 in relation to previously disclosed
unlawful activity carried out by an employee.
During the 52 weeks ended 27 June 2020, there was a one-off net
charge of GBP946,000 relating to the correction of erroneous
charges made against certain accounts as a result of unlawful
action by one employee, acting independently.
In addition, there was a provision of GBP498,000 in respect of
potential charges relating to an enquiry opened by HMRC relating to
the provision of uniforms and training to employees.
Separately disclosed finance costs:
During the 52 weeks ended 26 June 2021, the Group incurred
GBP471,000 of legal and professional fees associated with agreeing
revised covenants and agreeing covenant waivers with our lenders,
as well as fees associated with the CLBILS loan. These charges are
offset by GBP115,000 credited in respect of the ineffective portion
of the movement in fair value interest rate swaps.
The non-underlying finance charges for the 52 weeks ended 27
June 2020 comprise GBP185,000 for fees in relation to putting in
place the CLBILS loan following the COVID-19 outbreak, offset by
GBP35,000 credited in respect of the ineffective portion of the
movement in fair value interest rate swaps.
4 Taxation
a Tax on loss
52 weeks ended 26 June 52 weeks ended
2021 27 June 2020
Excluded Excluded
from from
Underlying underlying Total Underlying underlying Total
results results statutory results results statutory
Tax charged to the GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Income
Statement
------------------- ---------- ----------- --------- ------------------- ----------- ------------
Current income tax
Current tax on loss
for the
year (37) - (37) (165) (206) (371)
Adjustments for
current tax
on prior periods (110) 47 (63) 187 6 193
------------------- ---------- ----------- --------- ------------------- ----------- ------------
Total current
income tax
(credit)/charge (147) 47 (100) 22 (200) (178)
------------------- ---------- ----------- --------- ------------------- ----------- ------------
Deferred income tax
Origination and
reversal of
timing differences (1,724) (784) (2,508) (280) (2,575) (2,855)
Change in
corporation tax
rate - 4,032 4,032 - 1,634 1,634
Adjustments for
current tax
on prior periods 3 (48) (45) (191) - (191)
Total deferred tax
(credit)/charge (1,721) 3,200 1,479 (471) (941) (1,412)
------------------- ---------- ----------- --------- ------------------- ----------- ------------
Total tax
(credited)/charged
to the Income
Statement (1,868) 3,247 1,379 (449) (1,141) (1,590)
------------------- ---------- ----------- --------- ------------------- ----------- ------------
Tax charged to
other comprehensive
income
------------------- ---------- ---------------------- ------------------- -----------
Deferred tax
Gains/(losses)
arising on
cash flow hedges
in the period 305 (18)
Effect of increase
in future
rate of
corporation tax (139) (105)
Total tax
charged/(credited)
to other
comprehensive
income 166 (123)
------------------- ---------- ---------------------- ------------------- ------------------------- ------
b Reconciliation
of the total
tax charge
52 weeks 52 weeks ended
ended
------------------- -------------------------
26 June 27 June 2020
2021
------------------- -------------------------
GBP'000 GBP'000
------------------- ---------- ---------------------- ------------------- ------------------------- ------
Loss before income
tax (16,412) (20,981) 12,119
------------------- ---------- ---------------------- ------------------------- ------
Tax on Group loss at UK standard rate of corporation
tax of 19.0% (2020: 19.0%) (3,118) (3,986) 659
Expenses not
deductible for
tax purposes (9) 141 96
Profit on sale of
property
less chargeable
gains 582 619 (310)
Effect of a change
in tax
rate 4,032 1,634
Current and
deferred tax
(over)/under
provided in
previous years (108) 2 15
------------------- ---------- ---------------------- ------------------ ------------------------- ------
Total tax
charged/(credited)
to the Income
Statement 1,379 (1,590) 2,104
------------------- ---------- ---------------------- ------------------ ------------------------- ------
c Factors that may affect future tax charges
An increase in the future main corporation tax rate to 25% from
1 April 2023, from the previously enacted 19%, was announced in the
Budget on 3 March 2021, and substantively enacted on 24 May 2021.
Therefore deferred tax assets and liabilities that are expected to
reverse on or after 1 April 2023 have been calculated at the rate
of 25% as at the reporting date.
There is no expiry date on timing differences.
5 Dividends
52 weeks ended 52 weeks
ended
26 June 2021 27 June
2020
GBP'000 GBP'000
------------------------------------------------ ----------------- ----------
Declared and paid during the year
Final dividend for 2020: nil (2019: 24.21p) per
ordinary share - 3,573
Dividends paid - 3,573
------------------------------------------------ ----------------- ----------
No interim dividends were paid during the period (2020: nil) and
no final dividend has been proposed for approval at the Annual
General Meeting due to the Board wishing to preserve cash for the
long-term health of the Company and the terms and conditions of the
new financing arrangements that prohibit payment of dividends by
the Group whilst the CLBILS facility and alternative covenants
remain in place.
Shares held by the Company (and not allocated to employees under
the Share Incentive Plan) are treated as cancelled when calculating
dividends and earnings per share.
6 Earnings per share
52 weeks 52 weeks
ended ended
26 June 27 June
2021 2020
GBP'000 GBP'000
---------------------------------------------------- -------- --------
Loss attributable to equity shareholders (17,791) (19,391)
Items excluded from underlying results 9,602 16,200
---------------------------------------------------- -------- --------
Underlying loss attributable to equity shareholders (8,189) (3,191)
---------------------------------------------------- -------- --------
Number Number
---------------------------------------------------- -------- --------
Weighted average number of shares in issue 14,760 14,733
Dilutive outstanding options - -
---------------------------------------------------- -------- --------
Diluted weighted average share capital 14,760 14,733
---------------------------------------------------- -------- --------
Loss per 50p ordinary share
---------------------------------------------------- -------- --------
Basic (120.5)p (131.6)p
Diluted (120.5)p (131.6)p
Underlying basic (55.5)p (21.7)p
Underlying basic pre IFRS 16 (51.1)p (27.4)p
---------------------------------------------------- -------- --------
The basic earnings per share figure is calculated by dividing
the profit attributable to equity shareholders of the parent
Company for the period by the weighted average number of ordinary
shares in issue during the period.
Diluted earnings per share have been calculated on a similar
basis taking into account nil (2020: nil) dilutive potential
shares, which excludes shares held by trusts in respect of employee
incentive plans and options.
Underlying basic earnings per share are presented to eliminate
the effect of the underlying items and the tax attributable to
those items on basic and diluted earnings per share.
7 Notes to the cash
flow
statement
a Reconciliation of operating loss to cash generated by operations
52 weeks ended 26 June 52 weeks ended 27 June
2021 2020
Excluded Excluded
from from
Underlying underlying Underlying underlying
results results Total results results Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------- -------------- ------------------ -------------------- -------------- -------------- ------------
Operating loss (4,240) (6,307) (10,547) 1,515 (17,515) (16,000)
Adjustment for:
Depreciation and
amortisation 11,110 - 11,110 11,816 - 11,816
Impairment of property,
plant and equipment - 3,628 3,628 - 7,028 7,028
Impairment of intangible
fixed assets - 328 328 - 161 161
Impairment of
right-of-use
assets - 1,619 1,619 - 8,882 8,882
Impairment of assets held
for sale - 134 134 - - -
Share-based payments
expense 428 - 428 317 - 317
Decrease/(increase) in
inventories 910 - 910 (1,119) - (1,119)
(Increase)/decrease in
debtors
and prepayments (5,280) - (5,280) 3,141 - 3,141
(Decrease)/increase in
creditors
and accruals (870) (678) (1,548) 3,843 884 4,727
Free trade loan discounts - - - 3 - 3
Loss on sale of assets
(excluding
property) 840 - 840 216 - 216
Interest received 3 - 3 10 - 10
Income tax
received/(paid) 195 - 195 (185) - (185)
Fair value movements on
financial assets 5 - 5 - - -
Net cash inflow/(outflow)
from operating
activities 3,101 (1,276) 1,825 19,557 (560) 18,997
------------------------- -------------- ------------------ -------------------- -------------- -------------- ------------
b Analysis of net debt
Reclassification
of long-term
June 2020 Cash flow loans New loans Non-cash June 2021
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------------------- --- -------------- ------------------ -------------------- -------------- -------------- ------------
Cash and cash equivalents 9,807 (4,247) - - - 5,560
Debt due in less than
one year (94,262) - 92,662 - - (1,600)
Debt due after more
than one year - - (92,662) (2,000) (103) (94,765)
------------------------- -------------- ------------------ -------------------- -------------- -------------- ------------
Net debt (84,455) (4,247) - (2,000) (103) (90,805)
------------------------- -------------- ------------------ -------------------- -------------- -------------- ------------
Lease liabilities (55,860) 3,930 - - (6,396) (58,326)
------------------------- -------------- ------------------ -------------------- -------------- -------------- ------------
Statutory net debt (140,315) (317) - (2,000) (6,499) (149,131)
------------------------- -------------- ------------------ -------------------- -------------- -------------- ------------
8 Explanation of transition to IFRS
This is the first year the Group have presented their financial
statements in accordance with International Financial Reporting
Standards (IFRS) as adopted for use in the European Union. The last
financial statements under FRS 102 were for the 52 weeks ended 27
June 2020 and the date of transition to IFRS was 29 June 2019.
Set out below are the FRS 102 to IFRS equity reconciliations for
the Group at 29 June 2019, the Group's date of transition to IFRS,
and 27 June 2020 (last financial statements prepared under FRS 102)
and loss reconciliation for the 52 weeks to 27 June 2020.
First-time adoption
IFRS 1 First-time Adoption of IFRS allows companies adopting
IFRS for the first time to take certain exemptions from the full
requirements of IFRS in the year of transition. The Group has
elected to take the following key exemptions.
i) The carrying value of licensed freehold properties was
previously based on the 2014 property revaluation on transition to
FRS 102. As permitted, this valuation was not subsequently revised.
IFRS 1 permits this carrying value to become the deemed cost of the
licensed freehold properties. Accordingly, the FRS 102 revaluation
reserve is transferred to retained earnings on the date of
transition to IFRS.
ii) The carrying value of investments in subsidiaries under FRS
102 has been taken as the deemed cost at the date of transition to
IFRS, which is permitted under IFRS 1.
iii) IFRS 2 Share-based Payments has not been applied to
equity-settled share-based payments granted on or before 7 November
2002, nor has it been applied to share-based payments granted after
7 November 2002 that vested before the date of transition to IFRS
standards.
iv) IFRS 3 Business Combinations has not been applied to
business combinations that took place before transition to IFRS,
but will be applied prospectively from 29 June 2019.
v) IFRS 16 Leasing has optional transitional reliefs and
practical expedients permitted for first-time adopters of IFRS,
which have been applied as follows:
-- Determination of whether contracts existing at the date of
transition contain leases based on an assessment of the facts and
circumstances existing at that date, instead of determining
retrospectively whether a contract contained a lease at the
inception date of the lease.
-- Recognition and measurement of lease liabilities and
right-of-use assets at the date of transition to IFRS. The lease
liability is discounted using the incremental borrowing rate at the
date of transition to IFRS and the right-of-use asset is measured
as an amount equal to the lease liability, adjusted by the amount
of any prepaid or accrued lease payments relating to that lease
recognised in the Statement of Financial Position immediately
before the date of transition to IFRS. IAS 36 (impairment of
assets) is applied to right-of-use assets at the date of transition
to IFRS.
-- The use of a single discount rate has been applied to each
portfolio of leases with reasonably similar characteristics.
-- Reliance on previous assessments of whether leases are
onerous.
-- The accounting for operating leases, with a remaining lease
term of less than 12 months as at 29 June 2019, as short-term
leases.
vi) IAS 23 Borrowing Costs has been applied from July 2018, as
permitted for a first-time adopter.
The financial impacts on the Income Statement and Statement of
Financial Position are highlighted below. Within the notes to the
accounts, disclosures supporting a third balance sheet have been
presented where there was a material adjustment on transition to
IFRS.
The transition from FRS 102 to IFRS is in effect a change in the
underlying accounting policies of the Group and there is no impact
on the actual cash flows of the Group. However, due to the
difference in treatment of electronic fund transfers, described in
part 8b) below, there is a difference in the reported cash position
under IFRS.
1) Goodwill
Under FRS 102, goodwill on acquisitions is capitalised and
amortised over its useful economic life. Under IFRS, amortisation
is no longer charged; instead goodwill is tested for impairment
annually and again where indicators are deemed to exist. Goodwill
is carried at cost less accumulated impairment losses.
The transitional provision to apply IFRS 3 prospectively means
that there was no adjustment to the Group's IFRS opening Statement
of Financial Position at 29 June 2019. The pre-tax impact for the
52 weeks ended 27 June 2020 is a reduction in operating charges of
GBP117,000 due to reversal of goodwill amortisation.
2) Assets held for sale
Under FRS 102, any relevant assets that are to be disposed of
were valued at cost net of depreciation and any provision for
impairment, or fair value if investment property, prior to
disposal. Under IFRS, assets and liabilities whose carrying amounts
will be recovered principally by sale rather than continuing use
are reclassified from property, plant and equipment or investment
property to "assets held for sale". Any such properties are
revalued to fair value less costs to sell upon
reclassification.
There is no net impact on the Group's IFRS opening balance sheet
at 29 June 2019 but there is a reclassification of GBP485,000 from
Investment Properties to assets held for sale. The pre-tax impact
for the 52 weeks ended 27 June 2020 is nil, however, there is a
reclassification of GBP280,000 from loss on disposal to impairment
charges due to impairment of a property at the time of
reclassification to assets held for sale.
3) Leases
Under FRS 102, leases where the Group is lessee are treated as
operating leases, where appropriate and rentals charged on a
straight-line basis. On adoption of IFRS 16, the Group recognises
lease liabilities in relation to leases which were previously
classified as operating leases under FRS 102, using the cumulative
catch-up approach. These liabilities are measured at the present
value of remaining lease payments, discounted using the lessee's
incremental borrowing rate (IBR) as at 29 June 2019. The IBR
applied to the lease liabilities on 29 June 2019 was 2.19-2.99%
depending on the category, the remaining length and location of the
lease.
i. Adjustments recognised on adoption of IFRS 16:
GBP'000
--------------------------------------------------------------- ---------
Operating lease commitments disclosed at 29 June 2019 69,974
Leases not previously treated as operating 3,456
--------------------------------------------------------------- ---------
Subtotal gross IFRS 16 liabilities recognised at 29 June 2019 73,430
Discount at transition (16,873)
--------------------------------------------------------------- ---------
Lease liability recognised as at 29 June 2019 56,557
--------------------------------------------------------------- ---------
Of which:
Current lease liability 3,953
Non-current lease liability 52,604
----------------------------------------------- -------
Lease liability recognised as at 29 June 2019 56,557
----------------------------------------------- -------
The associated right-of-use assets for leases were measured at
the amount equal to the lease liability, adjusted by the amount of
any prepaid or accrued lease payments relating to that lease
recognised in the Statement of Financial Position as at 29 June
2019. Onerous lease provisions of GBP29,000 at 29 June 2019 have
been offset against the right-of-use asset at the date of initial
application, while GBP3,393,000 of previously recognised lease
premiums have been reclassified to right-of-use assets.
The recognised right-of-use assets relate to the following types
of asset:
2021 2020 2019
GBP'000 GBP'000 GBP'000
------------ --------- --------- ---------
Properties 46,717 45,794 57,540
Vehicles 548 442 440
Equipment 46 26 57
------------ --------- --------- ---------
47,311 46,262 58,037
------------ --------- --------- ---------
ii. Adjustments recognised in the Statement of Financial
Position
The Group's IFRS opening Statement of Financial Position at 29
June 2019 included the following adjustments in relation to
leases:
-- Right-of-use assets - increase by GBP58,037,000
-- Other receivables - reduction by GBP663,000
-- Lease liabilities - increase by GBP54,010,000
-- Property, plant and equipment - reduction by GBP3,393,000
-- Provisions - reduction by GBP29,000
There is no impact on the Group's IFRS opening Statement of
Financial Position at 29 June 2019. The pre-tax impact for the
52 weeks ended 27 June 2020 is a decrease in operating charges
of GBP415,000 due to reversal of rentals charged offset by
increased depreciation, and an increase in finance costs of
GBP1,298,000.
4) Impairment
Right-of-use assets are tested for impairment on the same basis
as other properties, with the same discount rates used. However,
the value in use is calculated excluding any rentals payable. The
COVID-19 pandemic was deemed a trigger for impairment review at 27
June 2020, and consequently, the impairment of right of use assets
increased the impairment provision under IFRS to GBP9,698,000.
There is no impact on the Group's IFRS opening Statement of
Financial Position at 29 June 2019. The pre-tax impact for the 52
weeks ended 27 June 2020 is an increase in operating charges of
GBP8,132,000, due to impairment of right-of-use assets. This is
excluded from the Group's definition of underlying operating
profit.
5) Expected credit losses
Under FRS 102, the bad debt provision is calculated on a
specific basis per customer. Under IFRS, an "expected loss"
impairment model applies, which requires a loss allowance to be
recognised based on expected credit losses. The impact on the
Group's IFRS opening Statement of Financial Position at 29 June
2019 is an increase of GBP23,000 due to the decrease in bad debt
provision. The pre-tax impact for the 52 weeks ended 27 June 2020
is a decrease in operating charges of GBP18,000 due to the decrease
in bad debt provision.
6) Government grants
Under FRS 102, grants related to income should be treated as
other income. IAS 20 allows presentation of grants related to
income as part of profit or loss as a deduction in reporting the
related expense or inclusion as other income. The Group has elected
to treat the Coronavirus Job Retention Scheme grant as a deduction
to operating charges under IFRS. There is no impact on the Group's
IFRS opening Statement of Financial Position at 29 June 2019. The
pre-tax impact for the 52 weeks ended 27 June 2020 is nil but there
is a reclassification of GBP4,962,000 from other income to credit
operating charges.
7) Taxation
IFRS accounting adjustments have been tax-amended where
appropriate. Under FRS 102, deferred tax is accounted for on the
basis of taxable timing differences that have originated but not
reversed at the Statement of Financial Position date. Under IFRS,
the Statement of Financial Position method recognises current tax
consequences of transactions and events and the future tax
consequences of the future tax recovery or settlement of carrying
amount of an entity's assets and liabilities. Under IFRS, the
Statement of Financial Position method recognises current tax
consequences of transactions and events and the future tax
consequences of the future tax recovery or settlement of carrying
amount of an entity's assets and liabilities. The Group's IFRS
opening Statement of Financial Position at 29 June 2019 includes an
increase in the net deferred tax liability of GBP4,000 arising from
transition differences. For the 52 weeks ended 27 June 2020, the
net difference in deferred tax liability under IFRS has decreased
by GBP1,852,000 to a difference of GBP1,847,000. In addition,
GBP613,000 relating to increased deferred tax on the revaluation
reserve under FRS 102, is accordingly reclassified from tax
relating to other comprehensive income to tax charged to the Income
Statement.
There is not expected to be a material change to the Group's
underlying tax rate as a result of the implementation of IFRS.
8) Reclassifications
a) Revaluation reserve
The Group has elected to treat the carrying values of properties
as being at deemed cost at the date of transition to IFRS, as
permitted by IFRS 1 First-time Adoption of IFRS. As a result, the
historic revaluation reserve of GBP71,858,000 under FRS 102 has
been reclassified as part of retained earnings in the Group's IFRS
Statement of Financial Position at 29 June 2019. This does not
affect distributable profits.
b) Cash received via electronic transfer as settlement for a
financial asset
Cash received via an electronic transfer system for settlement
of a financial asset is settled at a later date than when the
payment is initiated by the payer. Under IFRS 9, the trade
receivable with the customer should not be derecognised and the
cash should not be recognised until the transfer is settled. The
impact on the Group's IFRS opening Statement of Financial Position
Statement at 29 June 2019 is a reclassification of GBP1,265,000
from cash to trade receivables.
9) Presentational differences
a) Investment properties
IAS 1 requires that, when material, the aggregate amount of the
entity's investment property should be presented in the Statement
of Financial Position. The Group previously elected to present
investment properties within tangible fixed assets. The investment
property valuation of GBP8,309,000 at 29 June 2019 is now being
reported separately from property, plant and equipment.
b) Current and deferred tax
IAS 1 requires presentation of current and deferred tax
assets/liabilities in the Statement of Financial Position. The
Group's IFRS opening Statement of Financial Position at 29 June
2019 therefore presents GBP296,000 income tax separately from trade
and other payables; and also presents separately a net deferred tax
liability of GBP12,986,000, being GBP14,044,000 deferred tax
liabilities previously presented within provisions, offset by
GBP1,058,000 deferred tax assets previously presented within
current assets.
Prior year adjustment
In completing the transition to IFRS the group has identified
two prior year adjustments which have been restated in the tables
presented.
1) In the prior year Government grants received were shown as
revenue in the consolidated profit and loss account. This has been
restated to be shown as other income. There is no net impact on
operating loss or loss after tax and no impact on net assets as a
result of this restatement.
2) In the prior year the deferred tax assets and liabilities
were shown gross, however, under FRS 102 (as for IFRS) given the
circumstances related to these balances and the fact they relate to
the same tax authority they are required to be shown net. This has
no impact on the result for the period but reduces current assets
by GBP1.35m and decreases net current liabilities by GBP1.35m.
There is no impact on net assets or retained earnings as a result
of this restatement.
The financial impact of the errors identified are as
follows:
FRS 102 Restatement FRS 102
Reported GBP'000 Restated
2020 GBP'000 GBP'000
------------------- ---------- ------------ ----------
Revenue 123,619 (5,412) 118,207
Other income - 5,412 5,412
Operating charges (131,757) - (131,757)
------------------- ---------- ------------ ----------
Operating loss (8,138) - (8,138)
------------------- ---------- ------------ ----------
FRS 102 Restatement FRS 102
Reported GBP'000 Restated
2020 GBP'000 GBP'000
------------------------ ---------- ------------ ----------
Deferred tax asset 1,354 (1,354) -
Deferred tax liability (14,657) 1,354 (13,303)
------------------------ ---------- ------------ ----------
FRS 102 Restatement FRS 102
Reported GBP'000 Restated
2019 GBP'000 GBP'000
------------------------ ---------- ------------ ----------
Deferred tax asset 1,058 (1,058) -
Deferred tax liability (14,044) 1,058 (12,986)
------------------------ ---------- ------------ ----------
Group reconciliation of Income Statement for the 52 weeks ended
27 June 2020
Assets
held Expected
FRS 102 for credit Government
Restated Goodwill sale Leases Impairment loss Grants Taxation IFRS
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------------- ------------ -------- -------- ------------ ------------- ----------- ------------- ------------ ------------
Revenue 118,207 - - - - - - - 118,207
Other income 5,412 - - - - - (4,962) - 450
Operating
charges (131,757) 117 (280) 415 (8,132) 18 4,962 - (134,657)
-------------- ------------ -------- -------- ------------ ------------- ----------- ------------- ------------ ------------
Operating loss (8,138) 117 (280) 415 (8,132) 18 - - (16,000)
-------------- ------------ -------- -------- ------------ ------------- ----------- ------------- ------------ ------------
Finance costs (4,042) - - (1,298) - - - - (5,340)
Fair value
movements
on financial
instruments
charged to
profit
and loss 35 - - - - - - - 35
-------------- ------------ -------- -------- ------------ ------------- ----------- ------------- ------------ ------------
Net finance
costs (4,007) - - (1,298) - - - - (5,305)
(Loss)/profit
on disposal
of property (6) - 280 - - - - - 274
Investment
property
fair value
movements 50 - - - - - - - 50
-------------- ------------ -------- -------- ------------ ------------- ----------- ------------- ------------ ------------
Loss before
taxation (12,101) 117 - (883) (8,132) 18 - - (20,981)
Taxation 351 - - 168 1,688 (4) - (613) 1,590
-------------- ------------ -------- -------- ------------ ------------- ----------- ------------- ------------ ------------
Loss after
taxation (11,750) 117 - (715) (6,444) 14 - (613) (19,391)
-------------- ------------ -------- -------- ------------ ------------- ----------- ------------- ------------ ------------
Group reconciliation of Statement of Comprehensive Income for
the 52 weeks ended 27 June 2020
Assets
held Expected
FRS 102 for credit Government
Restated Goodwill sale Leases Impairment loss Grants Taxation IFRS
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------- ----------- -------- -------- ----------- ------------- ----------- ------------- ------------ ------------
Loss after
taxation (11,750) 117 - (715) (6,444) 14 - (613) (19,391)
--------------- ----------- -------- -------- ----------- ------------- ----------- ------------- ------------ ------------
Losses arising
on cash
flow hedges
during
the period (96) - - - - - - - (96)
Revaluation
gain 17 - - - - - - - 17
Tax relating to
components
of other
comprehensive
income (490) - - - - - - 613 123
--------------- ----------- -------- -------- ----------- ------------- ----------- ------------- ------------ ------------
Other
comprehensive
(losses)/gains (569) - - - - - - 613 44
Total
comprehensive
loss (12,319) 117 - (715) (6,444) 14 - - (19,347)
--------------- ----------- -------- -------- ----------- ------------- ----------- ------------- ------------ ------------
Group reconciliation of equity as at 29 June 2019 (IFRS
transition date)
Assets Expected
FRS 102 held credit Reclass-
Restated Goodwill for sale Leases loss ification IFRS
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------ ------------ ----------- ---------------- -------- ---------- --------------- --------------
Non-current assets
Goodwill and
intangible
assets 760 - - - - - 760
Property, plant
and
equipment 305,934 - - (3,393) - - 302,541
Investment
properties 8,794 - (485) - - - 8,309
Other non-current
assets 10 - - - - - 10
Right-of-use
assets - - - 58,037 - - 58,037
------------------ ------------ ----------- ---------------- -------- ---------- --------------- --------------
Total non-current
assets 315,498 - (485) 54,644 - - 369,657
------------------ ------------ ----------- ---------------- -------- ---------- --------------- --------------
Current assets
Inventories 7,111 - - - - - 7,111
Trade and other
receivables 12,945 - - (663) 23 1,265 13,570
Cash and cash
equivalents 116 - - - - (116) -
Assets held for
sale - - 485 - - - 485
------------------ ------------ ----------- ---------------- -------- ---------- --------------- --------------
Total current
assets 20,172 - 485 (663) 23 1,149 21,166
------------------ ------------ ----------- ---------------- -------- ---------- --------------- --------------
Current
liabilities
Trade and other
payables (22,827) - - - - - (22,827)
Borrowings (933) - - - - (1,149) (2,082)
Income tax payable (269) - - - - - (269)
Lease liabilities - - - (3,953) - - (3,953)
------------------ ------------ ----------- ---------------- -------- ---------- --------------- --------------
Total current
liabilities (24,029) - - (3,953) - (1,149) (29,131)
------------------ ------------ ----------- ---------------- -------- ---------- --------------- --------------
Net current
liabilities (3,857) - 485 (4,616) 23 - (7,965)
------------------ ------------ ----------- ---------------- -------- ---------- --------------- --------------
Total assets less
current
liabilities 311,641 - - 50,028 23 - 361,692
------------------ ------------ ----------- ---------------- -------- ---------- --------------- --------------
Non-current
liabilities
Lease liabilities (2,547) - - (50,057) - - (52,604)
Borrowings (81,160) - - - - - (81,160)
Derivative
financial
instruments (6,822) - - - - - (6,822)
Deferred tax
liabilities (12,986) - - - (4) - (12,990)
Provisions (29) - - 29 - - -
------------------ ------------ ----------- ---------------- -------- ---------- --------------- --------------
Total non-current
liabilities (103,544) - - (50,028) (4) - (153,576)
------------------ ------------ ----------- ---------------- -------- ---------- --------------- --------------
Net assets 208,097 - - - 19 - 208,116
------------------ ------------ ----------- ---------------- -------- ---------- --------------- --------------
Capital and
reserves
Share capital 7,429 - - - - - 7,429
Share premium
account 1,099 - - - - - 1,099
Revaluation
reserve 71,858 - - - - (71,858) -
Own shares (1,551) - - - - - (1,551)
Hedging reserve (4,990) - - - - (4,990)
Retained earnings 134,252 - - - 19 71,858 206,129
------------------ ------------ ----------- ---------------- -------- ---------- --------------- --------------
Total equity 208,097 - - - 19 - 208,116
------------------ ------------ ----------- ---------------- -------- ---------- --------------- --------------
Group reconciliation of equity as at 27 June 2020
Assets Expected
FRS 102 held credit Reclass-
Restated Goodwill for sale Leases Impairment loss Taxation ification IFRS
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------- ------------ ----------- ---------------- -------- ------------ ---------- ---------- ----------- --------------
Non-current
assets
Goodwill and
intangible
assets 557 117 - - - - - - 674
Property,
plant and
equipment 299,702 - - (3,155) 750 - - - 297,297
Investment
properties 9,661 - (850) - - - - - 8,811
Other
non-current
assets 5 - - - - - - - 5
Right-of-use
assets - - - 55,144 (8,882) - - - 46,262
------------- ------------ ----------- ---------------- -------- ------------ ---------- ---------- ----------- --------------
Total
non-current
assets 309,925 117 (850) 51,989 (8,132) - - - 353,049
------------- ------------ ----------- ---------------- -------- ------------ ---------- ---------- ----------- --------------
Current
assets
Inventories 8,230 - - - - - - - 8,230
Trade and
other
receivables 9,968 - - 266 - 41 - 54 10,329
Cash and cash
equivalents 9,861 - - - - - - (54) 9,807
Assets held
for sale - - 850 - - - - - 850
------------- ------------ ----------- ---------------- -------- ------------ ---------- ---------- ----------- --------------
Total current
assets 28,059 - 850 266 - 41 - - 29,216
------------- ------------ ----------- ---------------- -------- ------------ ---------- ---------- ----------- --------------
Current
liabilities
Trade and
other
payables (27,846) - - - - - - - (27,846)
Borrowings (94,262) - - - - - - - (94,262)
Lease
liabilities - - - (5,360) - - - - (5,360)
------------- ------------ ----------- ---------------- -------- ------------ ---------- ---------- ----------- --------------
Total current
liabilities (122,108) - - (5,360) - - - - (127,468)
------------- ------------ ----------- ---------------- -------- ------------ ---------- ---------- ----------- --------------
Net current
liabilities (94,049) - 850 (5,094) - 41 - - (98,252)
------------- ------------ ----------- ---------------- -------- ------------ ---------- ---------- ----------- --------------
Total assets
less
current
liabilities 215,876 117 - 46,895 (8,132) 41 - - 254,797
------------- ------------ ----------- ---------------- -------- ------------ ---------- ---------- ----------- --------------
Non-current
liabilities
Lease
liabilities (2,693) - - (47,807) - - - - (50,500)
Derivative
financial
instruments (7,107) - - - - - -- - (7,107)
Provisions (527) - - 29 - - - - (498)
Deferred tax
liabilities (13,303) - - 168 1,688 (9) - - (11,456)
------------- ------------ ----------- ---------------- -------- ------------ ---------- ---------- ----------- --------------
(23,630) - - (47,610) 1,688 (9) - - (69,561)
------------- ------------ ----------- ---------------- -------- ------------ ---------- ---------- ----------- --------------
Net assets 192,246 117 - (715) (6,444) 32 - - 185,236
------------- ------------ ----------- ---------------- -------- ------------ ---------- ---------- ----------- --------------
Capital and
reserves
Share capital 7,429 - - - - - - - 7,429
Share premium
account 1,099 - - - - - - - 1,099
Revaluation
reserve 70,409 - - - - - 613 (71,005) 17
Own shares (1,328) - - - - - - - (1,328)
Hedging
reserve (4,963) - - - - - - - (4,963)
Retained
earnings 119,600 117 - (715) (6,444) 32 (613) 71,005 182,982
------------- ------------ ----------- ---------------- -------- ------------ ---------- ---------- ----------- --------------
Total equity 192,246 117 - (715) (6,444) 32 - - 185,236
------------- ------------ ----------- ---------------- -------- ------------ ---------- ---------- ----------- --------------
Group reconciliation of cash flows for the 52 weeks ended 27
June 2020
Assets Expected
held credit Reclass-
FRS 102 Goodwill for sale Leases Impairment loss Ification IFRS
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------------ -------- -------- --------- ------- ---------- -------- ---------- --------
Cash flows from operating
activities 15,438 - - 2,533 - - 1,211 19,182
Cash generated from
operations (185) - - - - - - (185)
------------------------------ -------- -------- --------- ------- ---------- -------- ---------- --------
Net cash generated by
operating activities 15,253 - - 2,533 - - 1,211 18,997
Cash flows from investing
activities
Proceeds from disposal
of property and equipment 1,752 - - - - - - 1,752
Purchases of property,
equipment and lease
premiums (12,025) - - - - - - (12,025)
Purchase of intangible
fixed assets (92) - - - - - - (92)
Customer loan redemptions 2 - - - - - - 2
Acquisition of subsidiaries (151) - - - - - - (151)
------------------------------ -------- -------- --------- ------- ---------- -------- ---------- --------
Net cash used in investing
activities (10,514) - - - - - - (10,514)
Cash flows from financing
activities
Dividends paid (3,573) - - - - - - (3,573)
Interest paid (3,211) - - - - - - (3,211)
Payments of principal
portion of lease liabilities - - - (2,533) - - - (2,533)
Proceeds from borrowings 13,000 - - - - - - 13,000
Purchase of own shares (290) - - - - - - (290)
Share option proceeds 13 - - - - - - 13
------------------------------ -------- -------- --------- ------- ---------- -------- ---------- --------
Net cash generated by
financing activities 5,939 - - (2,533) - - - 3,406
Net movement in cash
and cash equivalents 10,678 - - - - - 1,211 11,889
Cash and cash equivalents
at beginning of the
period (817) - - - - - (1,265) (2,082)
------------------------------ -------- -------- --------- ------- ---------- -------- ---------- --------
Cash and cash equivalents
at end of the period 9,861 - - - - - (54) 9,807
------------------------------ -------- -------- --------- ------- ---------- -------- ---------- --------
9 Accounts
The financial information for the period ended 26 June 2021 and
the period ended 27 June 2020 does not constitute the Company's
statutory accounts for those years.
Statutory accounts for the period ended 27 June 2020 have been
delivered to the Registrar of Companies. The statutory accounts for
the period ended 26 June 2021 will be delivered to the Registrar of
Companies following the Company's Annual General Meeting.
The auditor's report on the statutory accounts for 26 June 2021
is unqualified, did not draw attention to any matters by way of
emphasis, and did not contain a statement under 498(2) or 498(3) of
the Companies Act 2006. The auditor's report on the statutory
accounts for 27 June 2020 was unqualified, did not contain
statements under s498 (2) or (3) of the Companies Act 2006 although
did draw attention, by way of emphasis, to a material uncertainty
in relation to the Group's ability to comply with future
covenants.
[1] Net debt comprises cash, bank overdrafts, lease liabilities
and bank and other loans less unamortised loan fees.
[2] All comparatives are for the 52 weeks to 27 June 2020 and
have been restated on an IFRS basis.
[3] Underlying operating loss before tax is operating loss
excluding operating charges that are either material or infrequent
in nature and do not relate to the underlying performance.
[4] The periods referred to are the comparative month(s) during
the financial year 52 weeks to 29 June 2019.
[5] All figures quoted are inclusive of the benefit of the
temporary VAT reduction.
[6] The periods referred to are the comparative month(s) during
the financial year 52 weeks to 27 June 2020.
[7] The periods referred to are the comparative month(s) during
the financial year 52 weeks to 26 June 2021.
[8] The periods referred to are the comparative month(s) during
the financial year 52 weeks to 29 June 2019.
[9] The periods referred to are the comparative month(s) during
the financial year 52 weeks to 27 June 2020 and 52 weeks to 26 June
2021.
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London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
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END
NEXXVLLBFFLXFBF
(END) Dow Jones Newswires
November 09, 2021 02:00 ET (07:00 GMT)
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