VARIOUS EATERIES PLC 

("Various Eateries" or "the Company"  

and with its subsidiaries "the Group") 

 

Final Results

52-week period ending 2 October 2022

 

Good strategic progress and continued commercial resilience

 

Various Eateries PLC, the owner, developer and operator of all day club, restaurant and hotel sites in the United Kingdom, announces its results for the 52 weeks ended 2 October 2022.

 

Financials

 

·	Revenue growth of 82% to £40.7m (2021: £22.3m)
·	Adjusted EBITDA* growth of 193% to £3.5m (2021: £1.2m)
·	Total loss before tax of £7.2m (2021: loss of £3.7m)
·	Cash at bank of £9.4m (2021: £19.7m)
·	Net debt of £3.3m (2021: net cash of £7.3m)
	*see Financial Review

 

Highlights

 

·	Positive trading performance against a challenging backdrop
	·	Coppa Club estate grew 1% LFL in H2 (a period of relatively normal trading) compared with 2019 (the most recent year with uninterrupted comparable trading)
	·	Encouraging Tavolino performance (meaningful comparisons not yet available following July 2020 opening)
	·	Sales of first Noci in Islington surpassed management expectations since March 2022 opening
·	Continued steady delivery against growth strategy
	·	Opening of four new venues: Coppa Club Putney, Coppa Club Haslemere, Coppa Club Bath and Noci Islington (2021: two new venues)
	·	Coppa Club Cardiff, Coppa Club Guildford, Coppa Club Farnham and Noci Battersea Power Station due to open in 2023
	·	Appointment of Lyndsay Anderson as Marketing Director and, post-period, Sharon Badalek announced as new CFO (starting 1 April 2023)
·	Ongoing mitigation of the inflationary environment
	·	Energy costs hedged materially from a volume perspective through to summer 2025
	·	Steps taken to manage margin pressures including comprehensive menu re-engineering exercise at period end
·	Confident of delivering another year of continued progress in FY 2023
	·	Uncertain outlook for inflationary pressures and ongoing threat of negative impact of train strikes
	·	Growing pipeline of high-quality sites; intention to pursue expansion plans at a measured pace
	·	Diverse mix of brands aligned to modern consumer needs and chosen pricing points leave us well-positioned to navigate a recessionary environment

 

Andy Bassadone, Executive Chairman of Various Eateries, said: 

  

"To have made the progress we have despite the widespread challenges we and many others in the sector have faced is testament to the hard work of our teams and the enduring appeal of our brands, even in times of economic uncertainty.

 

"There continues to be a complex picture of industry-wide pressures that make it difficult to predict exactly how the coming months will unfold. Nonetheless, we remain focused on executing our strategy, and are confident that we will emerge strongly once conditions improve." 

    

Annual General Meeting and Posting of Results 

  

The Company confirms that it intends to dispatch its Annual Report and Accounts and notice of Annual General Meeting to shareholders later this week. A further announcement will be made at that time. A copy of the annual report and accounts will also be available from the Company's website later this week (www.variouseateries.co.uk).

  

Enquiries 

 

Various Eateries plc		Via Alma PR
Andy Bassadone	Executive Chairman
Yishay Malkov	Chief Executive Officer
James Darwent	Interim Chief Financial Officer
WH Ireland Limited	Sole Broker and NOMAD	Tel: +44 (0)20 7220 1666
Broking   Harry Ansell
Nominated Adviser  Katy Mitchell
Megan Liddell
Alma PR	Financial PR	Tel: +44 (0)20 3405 0205
David Ison		variouseateries@almapr.co.uk
Pippa Crabtree

 

About Various Eateries 

 

Various Eateries owns, develops and operates restaurant, clubhouse and hotel sites in the United Kingdom. The Group's stated mission is "great people delivering unique experiences through continuous innovation". 

 

The Group is led by a highly experienced senior team including Andy Bassadone (Executive Chairman), Hugh Osmond (Founder), Yishay Malkov (CEO) and Matt Fanthorpe (Chef Director, a non-board position). 

 

The Group operates three core brands across 15 locations: 

 

·	Coppa Club, a multi-use, all day concept that combines restaurant, terrace, café, lounge, bar and work spaces
·	Tavolino, a restaurant aiming to address a gap in the market for high-quality Italian food at mid-market prices
·	Noci, a modern, neighbourhood pasta-only concept which serves very high-quality dishes at reasonable prices

 

For more information visit www.variouseateries.co.uk

 

 

CHAIRMAN'S AND CHIEF EXECUTIVE'S STATEMENT

 

The 52 weeks ending 2 October 2022 was another period of good strategic progress and commercial resilience against a backdrop characterised by industry-wide challenges.

 

As previously announced, sales were slightly ahead of market expectations, demonstrating the lasting appeal of our proposition despite the well-publicised headwinds. While profitability was impacted by our decision to resist passing price increases onto customers in full until there was more certainty around the trajectory of inflation, post-period end, we have taken action to enhance margins.

 

We were delighted to open four new venues in the year - our busiest in terms of site acquisition yet - including our first Noci restaurant in Islington, which has been a success.

 

Looking ahead, while macroeconomic uncertainty is set to persist in the short term, we believe Various Eateries continues to be in a favourable position, relative to many. It is our view that we have three strong brands aligned with modern consumer trends that are set to endure for many years to come, a proven rollout strategy with enough flexibility to ensure we keep moving forward, and a motivated leadership team with complementary skills and experience to deliver it.

 

There will no doubt be challenges to overcome in FY23, but we are well-prepared and confident of another year of steady, continued progress.

 

Ambition to create a significant player in UK leisure

 

Various Eateries is a modern, high-quality hospitality group that is focused on creating concepts with a solid value-proposition. The Group has several different but complementary brands that are aligned to the needs of the modern consumer, from single-product venues like Noci, that speak to the consumers' desire for high-quality, artisan products delivered at an excellent price, to the Coppa Club concept, with its all-day ethos; that meets consumers' needs for a flexible out-of-home space to work and socialise from. This variety of offer was consciously designed to ensure resilience during difficult economic conditions.

 

Various Eateries has a highly experienced management team, that over several decades have together and independently played leading roles in building some of the most successful brands in UK hospitality. We have seen market conditions at both ends of the spectrum and everything in between and, as a result, are well versed in not only navigating adversity but recognising opportunities within it.

 

Various Eateries was conceived as one such opportunity. Although recent years have been characterised by continued uncertainty, and the timings and severity of challenges have at times been difficult to predict, the overall direction of travel of the industry remains the same, and our confidence in and enthusiasm for our strategy is as high as it has ever been.

 

In Coppa Club, we have a multi-use, all-day concept that combines restaurant, terrace, café, lounge, bar and remote-working spaces under one roof. We operate several formats but are extremely selective in the sites we take. As a result, we have developed a highly desirable estate of prime locations designed to capture the growing demand for this kind of offering and, as an operator with long-term growth ambitions, will continue in a similar vein.

 

Tavolino addresses the gap in the market for high-quality Italian food at mid-market prices. Located on the river by London Bridge, with year-on-year sales growth, the restaurant has shown real promise and we continue to harbour plans to open new sites when conditions are right.

 

The first restaurant of our newest brand, Noci, opened in Islington, London, in March 2022. Noci, a modern, neighbourhood pasta restaurant, has been received positively in the local community and beyond and we are excited by the brand's potential. Although early in its existence, we are confident it will go on to form an important part of the Group.

 

While the pace of the rollout of our brands has been impacted by Covid and the elevated industry-wide cost pressures that have materialised subsequently, the rate at which we open new sites will continue to be dictated by the number of opportunities we see that meet our strict criteria rather than the need to grow at a particular rate.

 

Solid trading performance

 

Prior year performance comparisons remain difficult given the extended periods of Covid-related restrictions between March 2020 and January 2022. However, for the last six months of the financial year (4 April to 2 October 2022), a period of relatively normal trading, the Coppa estate achieved an LFL growth of 1% compared with 2019 (2019 being the most recent year with uninterrupted comparable trading).

 

New sites opened in the year have, overall, performed encouragingly under the circumstances. The performance of our Townhouse Coppa Club in central Bath since opening in August 2022 has been particularly noteworthy, attracting city centre workers and residents through the day and night. In 2023, the Cardiff, Farnham and Guildford sites will take similar formats, and enjoy similarly healthy footfall, giving us a high degree of confidence in their prospects.

 

Our hotels delivered a steady performance with high occupancy and room rates. Against an exceptional prior year that benefitted from high levels of pent-up demand post Covid and the rise in popularity of the 'staycation', we are pleased with their contribution.

 

The performance of Tavolino has also been in line with expectation, with central London footfall increasing as workers returned to the office. Opening in July 2020, meaningful performance comparisons are particularly difficult given there have been no reporting periods of uninterrupted trading. Nonetheless, we have been satisfied with the steady improvement we have seen over time and remain optimistic about the brand's prospects.

 

Since opening in March, Noci has surpassed expectations both in terms of performance and profile across the capital.

 

Given challenges such as the impact of the Covid escalation on our ability to trade and consumer sentiment in the winter, the cost-of-living crisis in the months since and ongoing train strikes, the Board believes the trading performance in the year to be a positive result.

 

Ongoing mitigation of industry-wide challenges

 

We had considerable success in mitigating many of the well-publicised challenges affecting the industry during the year.

 

While we are not completely immune to energy price rises, we have taken steps to hedge ourselves materially from a volume perspective, which we expect to protect us for at least the next 18 months.

 

At the end of the period, and moving into the new financial year, we carried out a comprehensive menu re-engineering exercise across the Group. The exercise comprised both food and beverage, enhancing margins with only modest price increases and without sacrificing quality.

 

Continued delivery of our expansion strategy

 

During the period, we opened four new venues: Coppa Clubs in Putney, Haslemere and Bath as well as the Group's first Noci in Islington, taking the total number of sites in the group to 15.

 

In November 2021, Coppa Club Putney opened on the River Thames, benefitting from a wraparound terrace looking onto the water. This generous all-day space has been cleverly designed with different corners for work, socialising and private dining.

 

In May 2022, Coppa Club Haslemere opened and brought fresh energy and design to an old hotel property. A destination venue, this site benefits from overnight stays, private dining, work and socialising spaces and indoor and outdoor eating and drinking.

 

August 2022 saw the opening of Coppa Club Bath, the first of the Townhouse venues. The Townhouse concept allows Coppa Club to capitalise on former retail sites and create multi-floor venues that are buzzy from day-to-night; these generous spaces offer both informal and destination-led eating and drinking under one roof. The Bath Townhouse, located on Old Bond Street in the centre of the city's shopping district, was an innovative redesign of a former Gap site. Busy from early to late, locals and tourists visit the venue for morning coffees through to late night dinner and drinks.

 

In March 2022, we opened the first Noci site overlooking Islington Green, a perennially popular neighbourhood. A fresh pasta and relaxed cocktail concept, the Noci site quickly settled into its first location and became known for its quality and atmosphere, the site has performed strongly since opening.

 

We remain on track to open Coppa Club sites in Cardiff, Guildford and Farnham in 2023. A second site for Noci will also open during the year at the iconic Battersea Power Station.

 

Coppa Club Guildford will be the second of the Townhouse variety of Coppa Clubs. A three-storey, all-day venue on the busy High Street, it will boast cafe-work space on the ground floor and a bold mural leading the guests' eye up the stairwell to the first-floor dining space and destinational bar on the top floor.

 

Coppa Club Farnham opens in Brightwells Yard, a buzzy new neighbourhood in central Farnham. Benefitting from a generous outdoor terrace, this will be a unique, all-day offering for locals in a Grade II Listed building.

 

Coppa Club Cardiff opens in the Welsh capital's prime shopping district. With a prominent cafe-bar space on the ground floor and a cosy outdoor terrace, guests will then journey up the first floor to the centrepiece bar, private dining room and flexible spaces for eating, drinking, and socialising.

 

Building on the popularity of the original Islington Green site, the newest Noci will have the same laid- back, friendly vibe of the original, set in the iconic Battersea Power Station. Benefitting from both a strong corporate and tourist market on its doorstep, the latest Noci site will maintain a focus on artisan pasta and cocktails on tap to ensure we can deliver a high-quality product, at high-volume.

 

While there is an increasing number of good sites available on increasingly advantageous terms, build costs have increased significantly and the economic picture remains uncertain. We will therefore continue to exercise caution in our expansion plans as we move through the new financial year, only proceeding with prospective sites that meet our strict criteria for long-term, sustainable success.

 

The backbone of our business: our people

 

Our venue and head office teams once again demonstrated an exceptional commitment to providing outstanding customer service and memorable experiences for customers. It was another year of

testing circumstances caused by challenging market conditions, but our colleagues rose to the challenge. On behalf of the Board, we would like to thank all our colleagues across the Group.

 

During the period, we continued to recruit and train large numbers of often young and inexperienced staff. While one of the biggest cost increases in the year, we continue to believe it to be the right strategy to ensure we maintain our opening hours, that our service remains to the high standards we expect, and to equip people with skills that will benefit them and society for life.

 

Alongside significant investment in our venue teams, our senior team has gone from strength to strength. In August 2022 we appointed Lyndsay Anderson as Marketing Director. In the months Lyndsay has been at the business, she has been instrumental in taking our brand and marketing strategies to the next level and asserted herself as a pivotal member of the senior leadership team.

 

Post period end, on 9 February 2023, we announced the appointment of Sharon Badelek as Chief Financial Officer and board member with effect from 1 April 2023. Sharon has an established track record of driving growth in businesses in our sector, with an impressive CV that includes senior financial positions at RedCat Pub Company, Vue Entertainment and Novus Leisure Limited. To have attracted someone of Sharon's calibre demonstrates the strength of our proposition and ambition and we look forward to benefitting from her counsel.

 

Sharon replaces Oliver Williams, who left the Company on 11 November 2022. Oliver joined Various Eateries in 2018 and in the years since played an integral role in the Company's successful listing on AIM and was instrumental in navigating the pandemic while strengthening the finance function of the business. We are thankful for his contribution and wish him well.

 

James Darwent is currently interim CFO and will remain with the Group and on the Board until Sharon's appointment in April 2023.

 

Market conditions present opportunity

 

In January 2023, in its coverage of the restructuring of a well-known restaurant group, the BBC provided the results of its analysis of corporate insolvency notices, finding that 320 businesses in the food service industry in the UK - restaurants, pubs, cafés and catering firms - were forced to initiate insolvency procedures in December 2022. This, according to the BBC, was an increase of 41% compared to the same month in 2019, before the pandemic. In total, the BBC said, 6,613 hospitality firms in the UK have started insolvency proceedings since 2020.

 

Issue 37 of the AlixPartners/CGA HospitalityMarketMonitor included some stark statistics regarding closures in the UK in the fourth quarter of calendar year 2022, with a net decline of 1,611 licensed premises. The report states: This represents a 1.6% contraction between September and December and is equivalent to nearly 18 closures every day. It means the sector saw a net decline of more than 4,800 premises, or 4.5% of its total, across the whole of 2022. More than three quarters of these closures - 3,841 premises - occurred in the second half of the year as business pressures intensified. This is an even worse performance than in 2021, when the COVID-19 pandemic was wrecking trade.

 

As we have maintained since IPO in September 2020, while it is sad to see our industry peers fall by the wayside, the increasing number of high-quality sites becoming available at extremely attractive rates presents us with a growing opportunity.

 

Our three new publicly confirmed Coppa Club venues are a good illustration of this. It is very unlikely they would have become available had it not been for the pandemic, and certainly not with the lease terms and at the rates we have been able to secure them on. Similarly, we are seeing an influx of fully fitted restaurants coming to the market that fit the criteria for Noci at no premium, giving us excellent strategic flexibility over the rollout.

 

As hospitality businesses struggle to contend with food and utility costs, we are observing that consumers are reducing spending in response to the cost-of-living crisis, and with the knowledge government support won't last forever, it is hard to imagine a future where things don't get worse before they get better. It is an unfortunate outlook for many, but an inevitable one, and we believe we are ideally positioned to take on the best of those empty sites and bring them back into the community as thriving all-day hubs and restaurants.

 

Regarding reduced consumer spending, while obviously not immune to economic downturn, we expect the Group to be a beneficiary of the emerging premiumisation trend. As disposable income reduces, we are seeing more and more people choosing quality over quantity and memorable experiences over the everyday. Our brands and venues, engineered around first-class food and destination venues at affordable prices, should continue to prove a popular choice.

 

Current trading and outlook

 

Sales in the first quarter of FY23 were in line with management expectations.

As we move through the second quarter, it remains difficult to predict with any certainty how this financial year will pan out. A mixed picture in October and November followed by a strong festive period didn't offer a great deal in terms of themes and patterns, and it is still too early to draw any meaningful conclusions.

Beyond Various Eateries, there doesn't yet seem to be any real consensus in the industry about what to expect, with opinion divided as to whether inflation and interest rates will continue to rise, or whether the solid Christmas many retail businesses enjoyed represented something of a turning point.

One thing that is certain is the negative impact of the ongoing train strikes on trading, particularly at our London sites. We saw evidence of this during the year under review and post-period end, and expect them to be detrimental as long as they continue.

We shouldn't let the current economic climate and prospect of further train strikes overshadow the progress we continue to make, and the potential of the Group. Our focus for FY23 will be on continued delivery of our strategy. Regardless of what happens to inflation and demand in the short-term, we are building the Group for the long-term, and will continue to make decisions, and take actions we believe will ensure sustainable, profitable growth and value creation for shareholders long into the future.

FINANCIAL REVIEW

 

Overview

 

The financial results for FY22 benefitted from all sites being open to trade throughout the year compared to periods of closure in the preceding two years due to the impact of Covid-19 restrictions, albeit trade was impacted in December 2021 through to early 2022 from the Government's advice to stay at home.

 

The KPI's of the Group's performance are summarised in the table below:

 

	52 weeks ended 2 October 2022		53 weeks ended 3 October 2021		Change
	£ 000		£ 000		%
Revenue	40,667		22,348		82%
Adjusted EBITDA (before impact of IFRS 16)*	437		(1,178)		137%
Adjusted EBITDA*	3,531		1,204		193%
Operating Loss	(5,209)		(2,098)		148%
Total loss for the year after tax	(7,215)		(3,740)		93%
Basic and diluted earnings per share (pence)	(8.8)		(4.6)		93%
Cashflow from operating activities	1,861		3,292		(43)%
Net debt/ (cash) excluding lease liabilities	3,317		(7,278)		146%
Number of sites	15		12		25%
* not audited

 

Summary of financial performance for the 52 weeks ended 2 October 2022

 

	52 weeks ended 2 October 2022		53 weeks ended 3 October 2021
	£ 000		£ 000
Reconciliation of loss before tax to Adjusted EBITDA
Revenue	40,667		22,348
Loss before tax	(7,215)		(3,740)
Impairment	2,543		610
Net financing costs	2,006		1,642
Depreciation and amortisation	4,702		3,971
Insurance claim	-		(2,500)
Loss on disposal of property, plant and equipment	54		335
Authorised Guarantee Agreements provision	-		(104)
EBITDA	2,090		214
Pre-opening costs	755		295
Share-based payments	830		844
Non-trading site costs	(144)		(149)
Adjusted EBITDA*	3,531		1,204
Adjustment for rent expense	(3,094)		(2,382)
Adjusted EBITDA (before impact of IFRS 16)*	437		(1,178)
* not audited

 

FINANCIAL PERFORMANCE

 

Overall Group revenue increased by 82% (FY22: £40.7m, FY21: £22.3m), resulting in an increase in adjusted EBITDA of £2.3m, from £1.2m in FY21 to £3.5m in FY22. The Group benefitted from all sites being able to trade throughout the period compared to FY21 in which there were significant restrictions to trade at various times during the year.

 

The loss before tax has increased from £3.7m in FY21 to £7.2m in FY22. In FY21 the Group benefitted from insurance claim proceeds in the amount of £2.5m that related to the original Covid-19 restrictions in FY20. In FY22 the Group incurred impairments to goodwill and right-of-use assets of £2.5m (FY21: £0.6m). Furthermore, the Group's depreciation charge has increased by £0.7m (from £4.0m in FY21 to £4.7m in FY22) and pre-opening costs have increased by £0.5m (from £0.3m in FY21 to £0.8m in FY22), as we have continued to invest in new sites.

 

Like for like sales performance (v calendar year 2019)

 

	Oct 21 to Nov 21	Dec 21 to Jan 22	Feb 22 to Mar 22	Apr 22 to Sep 22
London (3 sites)*	8%	-19%	-3%	0%
Regional (5 sites)*	18%	-7%	2%	7%
Total (8 sites)*	12%	-14%	-1%	3%

 

*not audited

 

Prior year comparisons remain difficult due to the impact of Covid-19 related restrictions during FY21. In addition the period from December 2021 to January 2022 was impacted by the Government's advice to stay at home.

 

The Government's advice to stay at home in December 2021 had a significant impact on all sites, particularly our three sites in London which would traditionally benefit from significant Christmas trade. From April 2022 onwards, a period of relatively normal trading, our five regional sites benefitted from a 7% uplift in like-for-like sales and this contributed to an overall growth of 3% for the eight sites in that period. Trading in London saw a slower recovery as tourism and office-based working had not yet recovered to their pre-pandemic levels.

FINANCING COSTS

 

Financing costs of £2.0m (2021: £1.6m) have increased by £0.4m in the year. This arises from increases in lease liability interest as we have invested in new sites, together with slight increases in costs on the renewal of the deep discounted bonds.

 

 

		52 weeks ended 2 October 2022		53 weeks ended 3 October 2021
		£ 000		£ 000
Financing costs on bank overdraft and borrowings		662		537
Lease liability interest		1,344		1,108
Financing costs		2,006		1,645

 

 

IMPAIRMENTS

A detailed review of each individual site has resulted an impairment charge of £1.6m against goodwill (2021: nil), and of £1.0m (2021: £0.6m) against right-of-use assets. Detail of the methodology is included in notes 13 and 14.

 

DIVIDENDS

The Directors do not recommend the payment of a dividend, believing it more beneficial to use cash resources to invest in the Group in line with our strategy.

 

CASHFLOW AND BALANCE SHEET

Net cashflow from operations declined from £3.3m in FY21 to £1.9m in FY22. In FY21 the Group benefitted from £2.5m relating to its Covid-19 Business Interruption claim and therefore the underlying improvement in net cashflow from operations was £1.1m.

 

During the period the Group invested £8.9m (2021: £5.1m) in capital expenditure in support of future growth. New Coppa Club sites were opened in Putney, Haslemere and Bath, and our first Noci was opened in Islington. Furthermore some light refurbishment was undertaken across other locations.

 

As a result of the investment undertaken during the year the Group ended the period with cash at bank of £9.4m (2021: £19.7m).

 

KEY PERFORMANCE INDICATORS ("KPIS")

 

The Group's indicators of performance are reviewed on a monthly and annual basis.  However with the prior period severely impacted by the conditions faced by the Group arising from the Covid-19 pandemic, the total loss and EPS figures are hard to assess in comparison to the prior year.

Consolidated Statement of Comprehensive Income

For the 52 weeks ended 2 October 2022

 

 

		52 weeks ended 2 October 2022		53 weeks ended 3 October 2021
	Note	£ 000		£ 000
Revenue	4	40,667		22,348
Cost of sales		(36,992)		(20,729)
Gross profit		3,675		1,619
Central staff costs		(2,617)		(2,076)
Share-based payments	26	(830)		(844)
Insurance claim proceeds		-		2,500
Impairment of goodwill	13	(1,563)		-
Impairment of property, plant and equipment	14	(980)		(610)
Loss on disposal of property, plant and equipment		(54)		(335)
Other expenses	11	(2,840)		(2,352)
Operating loss		(5,209)		(2,098)
Finance income	6	-		3
Financing costs	6	(2,006)		(1,645)
Loss before tax		(7,215)		(3,740)
Tax	10	-		-
Loss for the period		(7,215)		(3,740)
Earnings per share
Basic loss per share (pence)	12	(8.8)		(4.6)
Diluted loss per share (pence)	12	(8.8)		(4.6)

 

The above results were derived from continuing operations.

 

There are no items of comprehensive income other than the loss for the period and therefore, no statement of other comprehensive income is presented.

 

Consolidated Statement of Financial Position

As at 2 October 2022

 

			2 October 2022			3 October   2021
		Note	£ 000			£ 000
Non-current assets
Intangible assets		13	11,214			12,841
Right-of-use assets		14	26,109			20,724
Other property, plant and equipment		14	21,592			15,168
			58,915			48,733
Current assets
Inventories		16	808			546
Trade receivables		17	204			137
Other receivables		17	2,359			1,367
Cash and bank balances		18	9,390			19,716
			12,761			21,766
Total assets			71,676			70,499
Current liabilities
Trade and other payables		19	(11,420)			(11,243)
Borrowings		20	(12,707)			(12,438)
Net current liabilities			(11,366)			(1,915)
Total assets less current liabilities			47,549			46,818
Non-current liabilities
Borrowings		21	(29,244)			(22,128)
Provisions		22	(357)			(357)
Total non-current liabilities			(29,601)			(22,485)
Total liabilities			(53,728)			(46,166)
Net assets			17,948			24,333
Equity
Share capital		23	890			890
Share premium			52,284			52,284
Merger reserve			64,736			64,736
Employee benefit trust shares reserve			(5,012)			(5,012)
Retained earnings			(94,950)			(88,565)
Total funds attributable to the equity shareholders of the Company			17,948			24,333

 

 

Consolidated Statement of Changes in Equity

for the 52 weeks ended 2 October 2022

 

	Called-up share capital		Share premium account		Merger reserve		Employee benefit trust shares reserve		Retained Earnings		Total
Attributable to equity shareholders of the Company	£ 000		£ 000		£ 000		£ 000		£ 000		£ 000
At 27 September 2020	890		52,284		64,736		(5,012)		(85,669)		27,229
Share-based payments	-		-		-		-		844		844
Total transactions with owners	-		-		-		-		844		844
Loss for the period	-		-		-		-		(3,740)		(3,740)
Total comprehensive loss	-		-		-		-		(3,740)		(3,740)
At 3 October 2021	890		52,284		64,736		(5,012)		(88,565)		24,333
Share-based payments	-		-		-		-		830		830
Total transactions with owners	-		-		-		-		830		830
Loss for the period	-		-		-		-		(7,215)		(7,215)
Total comprehensive loss	-		-		-		-		(7,215)		(7,215)
At 2 October 2022	890		52,284		64,736		(5,012)		(94,950)		17,948

 

 

Consolidated Statement of Cash Flows

for the 52 weeks ended 2 October 2022

 

		52 weeks ended 2 October 2022		53 weeks ended 3 October 2021
		£ 000		£ 000
Cash flows from operating activities
Loss for the period		(7,215)		(3,740)
Adjustments to cash flows from non-cash items:
Depreciation and amortisation		4,702		3,971
Impairment		2,543		610
Loss on disposal of assets and leases		54		335
Share-based payments		830		844
Finance income		-		(3)
Financing costs		2,006		1,645
		2,920		3,662
Working capital adjustments:
Increase in inventories		(262)		(145)
(Increase) / decrease in trade and other receivables		(1,059)		54
Increase / (decrease) in accruals, trade and other payables		262		(175)
Decrease in provisions		-		(104)
Net cash flow from operating activities		1,861		3,292
Cash flows from investing activities
Interest received		-		3
Purchases of property plant and equipment		(8,852)		(5,059)
Proceeds from disposal of property, plant and equipment		-		59
Costs on issue of shares		-		(46)
Net cash flows from investing activities		(8,852)		(5,043)
Cash flows from financing activities
Interest paid		(1,345)		(1,525)
Proceeds on issue of shares		-		23,373
Repayment of borrowings		(431)		-
Principal elements of lease payments		(1,559)		(1,274)
Net cash flows from financing activities		(3,335)		20,574
(Decrease) / increase in cash		(10,326)		18,823
Opening cash at bank and in hand		19,716		893
Closing cash at bank and in hand		9,390		19,716

 

1 General information

 

Various Eateries PLC, 'the Company', and its subsidiaries (together 'the Group') are engaged in the operation of restaurants and hotels in London and the South East of England.

 

The Company is a public company limited by shares whose shares are publicly traded on the AIM Market of the London Stock Exchange and is incorporated and domiciled in the United Kingdom under the Companies Act 2006 and are registered in England and Wales.

 

The address of the registered office is 20 St Thomas Street, London, SE1 9RS.

 

 

 

 

2 Accounting policies

Basis of preparation

The principal accounting policies adopted in the preparation of the financials statements of the Group which have been applied consistently to all periods presented, are set out below.

The directors (the 'Directors') of Various Eateries PLC are responsible for the financial statements. Judgements made by the Directors, in the application of these accounting policies that have a significant effect on the financial statements and estimates with a significant risk of material adjustments in the next period are disclosed in note 3.

The consolidated financial statements of the Group have been prepared in accordance with UK adopted International Accounting Standards. The Company has elected to prepare its parent company financial statements in accordance with FRS 101.

The financial statements have been prepared on an historical cost basis. Monetary amounts in these financial statements are rounded to the nearest whole £1,000, except where otherwise indicated.

As permitted under s408 of the Companies Act 2006, the Company has taken advantage of the disclosure exemption in relation to the presentation of a company statement of profit or loss. As permitted by FRS 101, the Company has taken advantage of the disclosure exemptions available under that standard in relation to presentation of a cash flow statement, standards not yet effective, impairment of assets, related party transactions and remuneration of key management personnel.

Basis of consolidation

 

The consolidated financial statements incorporate those of Various Eateries PLC and all of its subsidiaries (i.e. entities that the Group controls through its power to govern the financial and operating policies so as to obtain economic benefits). All financial statements are made up to 2 October 2022.

 

All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.

 

Going concern

 

In adopting the going concern basis for preparing the financial statements for the period ended 2 October 2022, the directors have considered the business model, the Group's principal risks and uncertainties as well as taking into account the current cash position and potential facilities.

 

Based on the Group's cash flow forecasts and projections, the Board is satisfied that the Group will be able to operate within the level of its facilities for the foreseeable future. In making this assessment, the Directors have made a specific analysis of the impact of the economic uncertainty arising from the rise in inflation, along with the continuing impact of both Covid-19 and Brexit, together with the events in Ukraine. We have also taken into account the renewal of the deep discounted bond post year end (as detailed in note 29, post balance sheet events). For this reason, the Board considers it appropriate for the Group to adopt the going concern basis in preparing its financial statements.

 

Revenue

 

Restaurant revenue represents net invoiced sales of food and beverage excluding value added tax. Hotel revenue represents net invoiced sales of accommodation and room hire excluding value added tax. Revenue is recognised when the goods or services have been provided.

Goodwill

 

Goodwill relates to acquired sites and is initially measured at cost (being the excess of the aggregate of the consideration transferred and the amount recognised for non-controlling interests) and any previous interest held over the net identifiable assets acquired and liabilities assumed. If the fair value of the net assets acquired is in excess of the aggregate consideration transferred, the Group re-assesses whether it has correctly identified all of the assets acquired and all of the liabilities assumed and reviews the procedures used to measure the amounts to be recognised at the acquisition date. If the reassessment still results in an excess of the fair value of net assets acquired over the aggregate consideration transferred, then the gain is recognised in the income statement.

 

After initial recognition, goodwill is measured at cost less any accumulated impairment losses. The goodwill is tested annually for impairment irrespective of whether there is an indication of impairment.

 

Intangible fixed assets (other than goodwill)

Intangible assets acquired separately from a business combination are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date if the fair value can be measured reliably.

Amortisation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives of 4 years on a straight-line basis.

Property, plant and equipment

 

Property, plant and equipment are stated at cost net of accumulated depreciation and accumulated impairment losses. Cost comprises purchase cost together with any incidental costs of acquisition.

 

Depreciation is provided to write down the cost less the estimated residual value of all tangible fixed assets by equal instalments over their estimated useful economic lives on a straight-line basis. The following rates are applied:

Asset class                                                                                                         Depreciation method and rate

Right-of-use assets                                                                                           Life of lease

Freehold buildings                                                                                            2% per annum

Freehold land                                                                                                    Not depreciated

Leasehold improvements                                                                               Life of lease

Furniture, fittings and equipment                                                                  14.29% - 33.33% per annum

Assets under construction                                                                               Not depreciated

IT equipment                                                                                                    20% - 33.33% per annum

 

The estimated useful lives, residual values and depreciation method are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis. Property, plant and equipment are tested for impairment if indications of impairment are present.

 

Assets under construction relates to capital expenditure on sites that have not started trading.

 

Inventories

 

Raw materials and consumables are valued at the lower of cost and net realisable value. Cost is based on latest contracted purchase cost.

 

Financial instruments

The Group classifies financial instruments, or their component parts, on initial recognition as a financial asset, a financial liability or an equity instrument in accordance with the substance of the contractual arrangement. Financial instruments are recognised on the trade date when the Group becomes a party to the contractual provisions of the instrument. Financial instruments are recognised initially at fair value plus, in the case of a financial instrument not at fair value through profit and loss, transaction costs that are directly attributable to the acquisition or issue of the financial instrument. Financial instruments are derecognised on the trade date when the Group is no longer a party to the contractual provisions of the instrument.

Non-derivative financial instruments

Non-derivative financial instruments comprise trade and other receivables, cash and cash equivalents, loans and borrowings and trade and other payables. All financial instruments held are classified as subsequently measured at amortised cost.

Trade and other receivables and trade and other payables

Trade and other receivables are recognised initially at transaction price less attributable transaction costs. Trade and other payables are recognised initially at transaction price plus attributable transaction costs. Subsequent to initial recognition they are measured at amortised cost using the effective interest method, less any expected credit losses in the case of trade receivables. If the arrangement constitutes a financing transaction, for example if payment is deferred beyond normal business terms, then it is measured at the present value of future payments discounted at a market rate of interest for a similar debt instrument.

Interest bearing borrowings

Interest-bearing borrowings are recognised initially at the present value of future payments discounted at a market rate of interest. Subsequent to initial recognition, interest-bearing borrowings are stated at amortised cost using the effective interest method, less any impairment losses.

Cash and cash equivalents

Cash and cash equivalents comprise cash balances held at bank, call deposits, cash on hand and cash in transit.

Impairments of tangible and intangible fixed assets

 

At each reporting end date, the Group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs.

 

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

 

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss.

 

Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior periods. A reversal of an impairment loss is recognised immediately in profit or loss.

 

Taxation

 

The tax expense represents the sum of the tax currently payable and deferred tax.

 

Tax payable is based on taxable profit. Taxable profit differs from net profit as reported in the statement of profit or loss because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. Any liability for current tax is calculated using tax rates that have been enacted at the balance sheet date.

 

Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from the initial recognition of goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit. The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.

 

Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised based on tax laws and rates that have been enacted or substantively enacted at the balance sheet date. Deferred tax is charged or credited in the consolidated profit and loss account, except when it relates to items charged or credited in other comprehensive income, in which case the deferred tax is also dealt with in other comprehensive income.

 

The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Company expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.

 

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Company intends to settle its current tax assets and liabilities on a net basis.

 

Current and deferred tax are recognised in the consolidated profit or loss, except when they relate to items that are recognised in other comprehensive income or directly in equity, in which case, the current and deferred tax are also recognised in other comprehensive income or directly in equity respectively.

 

Employee benefits

Post-retirement benefits

The Group operates defined contribution plans for its employees. A defined contribution plan is a post-employment benefit plan under which the Group pays fixed contributions into a separate entity and will have no legal or constructive obligation to pay further amounts. Obligations for contributions to defined contribution pension plans are recognised as an expense in the periods during which services are rendered by employees. Termination benefits

Termination benefits are recognised immediately as an expense when the Group is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

Leases

 

The Group leases a number of properties in various locations around the UK from which it operates.

 

All leases are accounted for by recognising a right-of-use asset and a lease liability except for:

Leases of low value assets; and

Leases with a duration of twelve months or less.

 

Lease liabilities are measured at the present value of the contractual payments due to the lessor over the lease term, with the discount rate determined by reference to the rate inherent in the lease unless (as is typically the case) this is not readily determinable, in which case the Group's incremental borrowing rate on commencement of the lease is used. This is 4.5% (2021: 4.5%). Variable lease payments are only included in the measurement of the lease liability if they depend on an index or rate. In such cases, the initial measurement of the lease liability assumes the variable element will remain unchanged throughout the lease term. Other variable lease payments, such as those linked to revenue, are expensed in the period to which they relate.

 

On initial recognition, the carrying value of the lease liability also includes:

Amounts expected to be payable under any residual value guarantee;

The exercise price of any purchase option granted in favour of the Group if it is reasonably certain to exercise that option; and

Any penalties payable for terminating the lease, if the term of the lease has been estimated on the basis of termination option being exercised.

 

Right-of-use assets are initially measured at the amount of the lease liability, reduced for any lease incentives received, and increased for:

Lease payments made at or before commencement of the lease.

Initial direct costs incurred; and

The amount of any provision recognised where the Group is contractually required to dismantle, remove or restore the leased asset (typically leasehold dilapidations).

 

Subsequent to initial measurement lease liabilities increase as a result of interest charged at a constant rate on the balance outstanding and are reduced for lease payments made. Right-of-use assets are depreciated on a straight-line basis over the remaining term of the lease or over the remaining economic life of the asset if, rarely, this is judged to be shorter than the lease term. Right-of-use assets are tested for impairment if indications of impairment are present.

 

When the Group revises its estimate of the term of any lease (because, for example, it re-assesses the probability of a lessee extension or termination option being exercised), it adjusts the carrying amount of the lease liability to reflect the payments to be made over the revised term, which are discounted at the same discount rate that applied on lease commencement. The carrying value of lease liabilities is similarly revised when the variable element of future lease payments dependent on a rate or index is revised. In both cases an equivalent adjustment is made to the carrying value of the right-of-use asset, with the revised carrying amount being depreciated over the remaining (revised) lease term.

 

Lease modifications change the scope of the lease or change the consideration for the lease by comparison with that detailed in the original terms and conditions of the contract. If the modifications, in substance, mean that the original lease has been terminated and a new lease created, then the revised terms are accounted for as a new lease.

 

Where modifications do not need to be accounted for as a separate lease, the amount recognised for the lease liability and the right-of-use asset is revisited to reflect the updated terms and conditions of the contract.

 

Finance income and Financing costs

 

Financing costs comprise interest payable, finance charges on shares classified as liabilities and finance leases recognised in profit or loss using the effective interest method, and net foreign exchange losses that are recognised in the Statement of Comprehensive Income.

 

Finance income includes interest receivable on funds invested.

 

Interest income and interest payable are recognised in the Statement of Comprehensive Income as they accrue, using the effective interest method.

 

Investments

 

In the separate accounts of the Company, interests in subsidiaries are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. Interests in subsidiaries are assessed for impairment at each reporting date. Any impairments losses or reversals of impairment losses are recognised immediately in profit or loss.

 

Government grants

 

During the period, the Group has received business rates relief. The income from this has been offset against the expense to which it relates.

 

 

Standards issued but not yet effective:

 

The following standards relevant to the Group are in issue but are not yet effective and have not been applied in the financial statements. In some cases these standards and guidance have not been endorsed for use in the United Kingdom.

 

IFRS 3 (Amendment)	Reference to the conceptual framework
IAS 16 (Amendment)	Property, plant and equipment: proceeds before intended use
IAS 37 (Amendment)	Cost of fulfilling a contract
IAS 1 (Amendment)	Classification of liabilities as current or non-current
IAS 1 (Amendment)	Disclosure of accounting policies
IAS 8 (Amendment)	Definition of accounting estimates
IAS 12 (Amendment)	Deferred tax related to assets and liabilities arising from a single transaction
IFRS 17 (Amendment)	Insurance contracts

 

The Group has not yet assessed the impact of these amended Accounting Standards.

 

 

 

3 Critical accounting judgements and key sources of estimation uncertainty

 

The preparation of the financial statements requires the Directors to make estimates and judgements that affect the reported amounts of assets, liabilities, costs and revenue. Actual results could differ from these estimates. Information about such judgements and estimates is contained in individual accounting policies. The judgements, estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant.

 

The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are addressed below:

 

Key estimate - determining the rate used to discount lease payments

At the commencement date of property leases the lease liability is calculated by discounting the lease payments. The discount rate used should be the interest rate implicit in the lease. However, if that rate cannot be readily determined, which is generally the case for property leases, the lessee's incremental borrowing rate is used, being the rate that the individual lessee would have to pay to borrow the funds necessary to obtain an asset of similar value to the right of use asset in a similar economic environment with similar terms, security and conditions. The discount rate applied to the Group's leases under the portfolio approach is 4.5%. A 0.5% increase in the discount rate to 5% will result in a decrease in net present value of the total lease liability of £1,012,000 in 2022 (2021: £648,000). A 0.5% decrease in discount rate to 4% results in increase in the net present value of the total lease liability of £1,067,000 in 2022 (2021: £683,000).

 

Key estimate - determining the AGA provision

The Group has historically entered into AGA provisions for 8 sites (2021: 9) which have been disposed of via assignment of lease. Should the assignees default on their payments, the Group would become liable. Judgement is required to determine the probable outflow of resources that arise from these guarantees. A provision of £357,000 (2021: £357,000) has been made for one year of rent at 3 sites (2021: 3), with other sites considered a contingent liability (as detailed in note 30). This reflects an assessment of the trading status of the assignees, and the expected cost to dispose of the lease should those assignees default.

 

Key estimate - assessment of recoverable amounts for assets tested for impairment

The Group performs impairment assessments on goodwill, other intangibles, and property plant and equipment as required by IAS 36 Impairment of assets.  The Company also performs impairment assessments on investments in subsidiaries under IAS 36 and receivables from subsidiaries under IFRS 9 Financial instruments.

 

Determining whether assets are impaired under IAS 36 requires an estimation of the recoverable amount of the cash-generating units ('CGUs') to which those assets have been allocated. The value-in-use calculation requires estimation of future cash flows expected to arise from the cash generating unit and a suitable discount rate in order to calculate present value. Details of cash generating units, carrying values of goodwill, other intangibles and property, plant and equipment as well as further information about the assumptions made are disclosed in notes 13 and 14 to the financial statements.

 

Determining whether assets are impaired under IFRS 9 requires application of the 'expected credit loss' approach, which involves estimation of how current and future economic conditions will impact on the amount of any such loss.  The carrying value of receivables from subsidiaries is set out in note 17 to the financial statements.

 

 

4 Revenue

 

An analysis of the Group's total revenue (including sublease rental income shown within cost of sales) which all originates in the UK is as follows:

 

	52 weeks ended 2 October 2022		53 weeks ended 3 October 2021
	£ 000		£ 000
Sale of goods	36,523		20,212
Accommodation and room hire	4,086		2,111
Sub-let rental income	58		25
	40,667		22,348

 

5 Segmental Reporting

 

IFRS 8 'Operating Segments' requires operating segments to be based on the Group's internal reporting to its Chief Operating Decision Maker ('CODM'). The CODM is regarded as the Chief Executive Officer together with other Board Members who receive financial information at a site-by-site level.

 

 

52 weeks ended 2 October 2022	Restaurant Segment		Hotel Segment		Other Unallocated		Total
	£ 000		£ 000		£ 000		£ 000
Revenue	36,523		4,086		58		40,667
Adjusted EBITDA (before impact of IFRS 16)	4,548		1,050		(5,161)		437
Pre-opening costs	(734)		-		(21)		(755)
Non-trading sites income	144		-		-		144
Impact of IFRS 16	1,819		1,275		-		3,094
Share based payments	-		-		(830)		(830)
EBITDA	5,777		2,325		(6,012)		2,090
Depreciation and amortisation	-		-		(4,702)		(4,702)
Loss on disposal of assets and leases	-		-		(54)		(54)
Impairments	-		-		(2,543)		(2,543)
Financing costs	-		-		(2,006)		(2,006)
Profit / (loss) before tax	5,777		2,325		(15,317)		(7,215)
Tax	-		-		-		-
Profit / (loss) for the period	5,777		2,325		(15,317)		(7,215)

 

53 weeks ended 3 October 2021	Restaurant Segment		Hotel Segment		Other Unallocated		Total
	£ 000		£ 000		£ 000		£ 000
Revenue	20,212		2,111		25		22,348
Adjusted EBITDA (before impact of IFRS 16)	2,748		(18)		(3,908)		(1,178)
Pre-opening costs	(295)		-		-		(295)
Non-trading sites income	149		-		-		149
Impact of IFRS 16	1,182		1,200		-		2,382
Share based payments	-		-		(844)		(844)
EBITDA	3,784		1,182		(4,752)		214
Depreciation and amortisation	-		-		(3,971)		(3,971)
Loss on disposal of assets and leases	-		-		(335)		(335)
Impairments	-		-		(610)		(610)
Financing costs	-		-		(1,642)		(1,642)
Movement in AGA provision	-		-		104		104
Insurance claim proceeds	2,500		-		-		2,500
Profit / (loss) before tax	6,284		1,182		(11,206)		(3,740)
Tax	-		-		-		-
Profit / (loss) for the period	6,284		1,182		(11,206)		(3,740)

 

 

 

6 Finance income / financing costs

	52 weeks ended 2 October 2022		53 weeks ended 3 October 2021
	£ 000		£ 000
Interest income on bank deposits	-		3
Total finance income	-		3
Interest on bank overdrafts and borrowings	(661)		(537)
Lease liability interest	(1,344)		(1,108)
Foreign exchange loss	(1)		-
Total financing costs	(2,006)		(1,645)
Net financing costs	(2,006)		(1,642)

 

 

 

7 Auditor's remuneration

	52 weeks ended 2 October 2022		53 weeks ended 3 October 2021
	£ 000		£ 000
Audit of the financial statements	199		138

 

Audit fees for the 52 weeks ended 2 October 2022 includes £36,000 in respect of the 2021 audit. Audit fees for the 53 weeks ended 3 October 2021 includes £13,000 in respect of the 2020 audit.

 

 

 

 

8 Staff numbers and costs

 

	52 weeks ended 2 October 2022		53 weeks ended 3 October 2021
	£ 000		£ 000
Their aggregate remuneration comprised:
Wages and salaries	15,339		11,824
Social security costs	1,215		898
Other pension costs (see note 24)	220		179
Share-based payments	830		844
Other employee costs	91		94
Grant income - CJRS	-		(3,091)
	17,695		10,748
	52 weeks ended 2 October 2022		53 weeks ended 3 October 2021
The average monthly number of employees (including Directors) was:
Restaurants	759		521
Hotels	56		46
Management	43		32
	858		599

 

The average monthly number of employees (being directors) of the Company was 7 (2021:7)

 

 

9 Directors' remuneration

 

	52 weeks ended 2 October 2022		53 weeks ended 3 October 2021
The Directors' remuneration for the period in respect of services to the Group, was as follows:	£ 000		£ 000
Remuneration	483		444
Employer pension contribution	9		8
	492		452

 

 

	52 weeks ended 2 October 2022		53 weeks ended 3 October 2021
In respect of the highest paid director:	£ 000		£ 000
Remuneration	202		181
Employer pension contribution	5		5
	207		186

 

 

10 Tax

 

Tax charged in the statement of comprehensive income

	52 weeks ended 2 October 2022		53 weeks ended 3 October 2021
	£ 000		£ 000
Tax expense
Corporation tax	-		-
Total current income tax	-		-
Tax expense in the statement of comprehensive income	-		-
Corporation tax is calculated at 19% (2021: 19%) of the estimated taxable loss for the period.

 

The charge for the period can be reconciled to the loss in the consolidated statement of comprehensive income as follows:
	52 weeks ended 2 October 2022		53 weeks ended 3 October 2021
	£ 000		£ 000
Loss before tax	(7,215)		(3,740)
Corporation tax at standard rate 19.0% (2021: 19.0%)	(1,371)		(711)
Fixed asset differences	527		236
Expenses not deductible	1,792		311
Income not taxable	(1,409)		-
Remeasurement of deferred tax for changes in tax rates	1		(3,049)
Movement in deferred tax not recognised	529		3,213
Other movements	(69)		-
Total tax charge	-		-

 

 

No account has been taken of the potential deferred tax asset of £13,528,000 (2021: £12,705,000) calculated at 25% (2021: 25%) and representing losses carried forward and short-term timing differences, owing to the uncertainty over the utilisation of the losses available.

 

11 Other expenses

 

	52 weeks ended  2 October 2022		53 weeks ended 3 October 2021
	£ 000		£ 000
Depreciation and amortisation	244		389
AGA release of provision (note 22)	-		(104)
Other central costs	2,596		2,067
	2,840		2,352

 

12 Earnings per share

 

Basic loss per share is calculated by dividing the profit attributable to equity shareholders by the weighted average number of shares outstanding during the year. There were no potentially dilutive ordinary shares outstanding as at the periods ended 2 October 2022 and 3 October 2021.

 

					2 October 2022		3 October 2021
					£ 000		£ 000
Loss for the year after tax					(7,215)		(3,740)
Basic and diluted weighted average number of shares					82,143,398		82,143,398
Basic loss per share (pence)					(8.8)		(4.6)
Diluted loss per share (pence)					(8.8)		(4.6)

 

13 Intangible assets

 

Group	Brand		Goodwill		Trademarks, patents & licenses		Total
	£ 000		£ 000		£ 000		£ 000
Cost or valuation
At 3 October 2021	2,912		26,019		25		28,956
Additions	-		-		-		-
At 2 October 2022	2,912		26,019		25		28,956
Amortisation
At 3 October 2021	2,724		13,391		-		16,115
Charge for the period	64		-		-		64
Impairment	-		1,563		-		1,563
At 2 October 2022	2,788		14,954		-		17,742
Carrying amount 2 October 2022	124		11,065		25		11,214
	Brand		Goodwill		Trademarks, patents & licenses		Total
	£ 000		£ 000		£ 000		£ 000
Cost or valuation
At 27 September 2020	2,912		26,019		25		28,956
Additions	-		-		-		-
At 3 October 2021	2,912		26,019		25		28,956
Amortisation
At 27 September 2020	2,662		13,391		-		16,053
Charge for the period	62		-		-		62
At 3 October 2021	2,724		13,391		-		16,115
Carrying amount 3 October 2021	188		12,628		25		12,841

 

Brand relates to registered brand names and is amortised over an estimated useful economic life of four years.

 

Goodwill is not amortised, but an impairment test is performed annually by comparing the carrying amount of the goodwill to its recoverable amount. The recoverable amount is represented by the greater of the individual cash generating units (CGU's) fair value less costs of disposal and its value-in-use.

 

The goodwill balance relates to two sites in the restaurant segment (£2,038,000) and two sites in the hotel segment (£9,027,000).

 

 

Restaurant segment

The key assumptions for the value-in-use calculations are those regarding the discount rate, trading forecasts and growth rates. A pre-tax discount rate of 14.9% was used (2021: 12.0%), based on the Group's WACC and comparable businesses in the sector. Cash flows in line with forecasts were used. Cash flows beyond the forecast period are extended out to the end of the lease terms at a 2% growth rate.

 

Impairment testing at 2 October 2022 resulted in the impairment of goodwill relating to Restaurant 1 for £1,563,000, leaving a recoverable amount of £1,046,000. This is due to the recoverable amount, being value-in-use, being lower than the goodwill recognised.

 

Given the ongoing global economic uncertainty and its impact on the UK hospitality sector there is particular sensitivity to the forecasts prepared in connection with the impairment review as at 2 October 2022. The estimate of recoverable amount for the restaurant segment is particularly sensitive to the discount rate and trading forecast assumptions. If the discount rate used is increased by 2%, the forecast future EBITDA is reduced by 10% and the terminal growth rate reduced by 1%, a further impairment loss of £991,000 for the period ended 2 October 2022 would have to be recognised against goodwill (2021: £220,000). Management is not currently aware of any other reasonably possible changes to key assumptions that would cause a unit's carrying amount to exceed its recoverable amount.

 

Hotel segment

The key assumptions for the value-in-use calculations are those regarding the discount rate, trading forecasts and growth rates. A pre-tax discount rate of 14.9% was used (2021: 12.0%), based on the Group's WACC and comparable businesses in the sector. Cash flows in line with forecasts were used. Cash flows beyond the forecast period are extended at a terminal growth rate of 2%.

 

Impairment testing at 2 October 2022 resulted in no requirement to reduce the carrying value of goodwill at 2 October 2022, as the recoverable amounts of the CGUs, based on value-in-use estimates, were greater than the carrying values.

 

The estimate of recoverable amount for the hotel segment is sensitive to the discount rate, trading forecast assumptions and terminal growth rate. If the discount rate used is increased by 2%, the forecast future EBITDA is reduced by 10% and the terminal growth rate reduced by 1%, no impairment would be required (2021: nil). Management is not currently aware of any other reasonably possible changes to key assumptions that would cause a unit's carrying amount to exceed its recoverable amount.

 

Company

 

The Company has no intangible assets.

 

14 Property, plant and equipment
   Group

	Right-of-use  assets		Freehold property		Leasehold improvements		Furniture, fittings and equipment		Assets under construction		IT equipment		Total
	£ 000		£ 000		£ 000		£ 000		£ 000		£ 000		£ 000
Cost or valuation
At 3 October 2021	29,215		2,294		9,814		6,003		1,336		1,583		50,245
Additions	6,531		-		5,481		2,291		585		495		15,383
Lease modifications	2,127		-		-		-		-		-		2,127
Disposals	(285)		-		-		(3)		(74)		(2)		(364)
Transfers	-		-		998		244		(1,274)		32		-
At 2 October 2022	37,588		2,294		16,293		8,535		573		2,108		67,391
Depreciation
At 3 October 2021	8,491		-		1,756		3,091		-		1,015		14,353
Charge for the period	2,286		-		733		1,351		-		268		4,638
Eliminated on disposal	(278)		-		-		(2)		-		(1)		(281)
Impairment loss	980		-		-		-		-		-		980
At 2 October 2022	11,479		-		2,489		4,440		-		1,282		19,690
Carrying amount At 2 October 2022	26,109		2,294		13,804		4,095		573		826		47,701

 

	Right-of-use  assets		Freehold property		Leasehold improvements		Furniture, fittings and equipment		Assets under construction		IT equipment		Total
	£ 000		£ 000		£ 000		£ 000		£ 000		£ 000		£ 000
Cost or valuation
At 27 September 2020	26,907		1,795		7,860		5,942		1,171		1,432		45,107
Additions	2,308		17		2,088		1,404		1,336		215		7,368
Disposals	-		-		(701)		(1,404)		(60)		(65)		(2,230)
Transfers	-		482		567		61		(1,111)		1		-
At 3 October 2021	29,215		2,294		9,814		6,003		1,336		1,583		50,245
Depreciation
At 27 September 2020	5,858		-		1,436		3,551		-		823		11,668
Charge for the period	2,023		-		374		1,267		-		244		3,908
Eliminated on disposal	-		-		(54)		(1,727)		-		(52)		(1,833)
Impairment loss	610		-		-		-		-		-		610
At 3 October 2021	8,491		-		1,756		3,091		-		1,015		14,353
Carrying amount 3 October 2021	20,724		2,294		8,058		2,912		1,336		568		35,892

 

The Group's leasehold premises and improvements are stated at cost, being the fair value at the date of acquisition, plus any additions at cost less any subsequent accumulated depreciation. Assets under construction relates to capital expenditure on sites that have not started trading.

 

Depreciation is charged to cost of sales in the Statement of Comprehensive Income for property, plant and equipment in use at the trading leasehold premises. Depreciation on property, plant and equipment used by central functions is charged to other expenses in the Statement of Comprehensive Income.

 

Rental income from subletting right-of-use assets is recognised on a straight-line basis over the term of the relevant lease. It is netted off against rental costs and is recognised within cost of sales (2022: £42,000, 2021: £41,000).

 

The Group has determined that each site in the restaurant operating segment, and each of the companies in the hotel operating segment are separate CGUs for impairment testing purposes. Each CGU is tested for impairment at the balance sheet date if there exists at that date any indicators of impairment. Losses incurred by the Group pre Covid-19 as well as the ongoing Covid-19 pandemic are considered indicators of potential impairment, accordingly all CGUs have been tested for impairment by comparing the carrying amount of the assets to recoverable amount. The recoverable amount is represented by the greater of the individual CGU's fair value less costs of disposal and its value-in-use.

 

 

Restaurant segment

The key assumptions for the value-in-use calculations are those regarding the discount rate, trading forecasts and growth rates. A discount rate of 14.9% was used (2021: 12.0%), based on the Group's WACC and comparable businesses in the sector. Cash flows in line with forecasts were used. Cash flows beyond the forecast period are extended out to the end of the lease terms at a 2% growth rate.

 

Impairment testing resulted in the reduction of carrying amount to recoverable amount, being value-in-use, for three CGUs in 2022, with the full charge recognised against the restaurant segment. This charge was for the lease on restaurant 2 (impairment of £495,000 leaving a recoverable amount in the CGU of £1,970,000), restaurant 3 (impairment of £278,000 leaving a recoverable amount in the CGU of £471,000) and restaurant 4 (impairment of £207,000 leaving a recoverable amount in the CGU of £nil). The CGUs with the least headroom are Restaurant 5 with £160,000, Restaurant 6 with £318,000 and Restaurant 7 with £534,000. The charge in 2021 was for £610,000 against right of use assets at restaurant 4.

 

The estimate of recoverable amount for the restaurant segment is particularly sensitive to the trading forecast assumptions. If the discount rate used is increased by 2%, the forecast EBITDA is reduced by 10%, and the terminal growth rate reduced by 1%, a further impairment loss of £569,000 for the period ended 2 October 2022 would have to be recognized against right of use assets. Management is not currently aware of any other reasonably possible changes to key assumptions that would cause a unit's carrying amount to exceed its recoverable amount.

 

Hotel segment

As a result of the headroom identified during the goodwill impairment testing of the hotel operating segment (see note 13), no impairment charge is required in respect of the hotel segment.

 

Company

 

The Company has no property, plant and equipment.

 

15 Investments

 

Group subsidiaries
Name of subsidiary	Principal activity	Country of incorporation and registered office	Proportion of ownership interest and voting rights held by the Group
			2022	2021
Various Eateries Holdings Limited*	Holding company	United Kingdom 20 St Thomas Street, London, SE1 9RS	100%	100%
Rare Bird Hotels at Sonning Limited*	Hotels and similar accommodation	United Kingdom 20 St Thomas Street, London, SE1 9RS	100%	100%
Rare Bird Hotels at Streatley Limited*	Hotels and similar accommodation	United Kingdom 20 St Thomas Street, London, SE1 9RS	100%	100%
VEL Property Holdings Limited	Property management services	United Kingdom 20 St Thomas Street, London, SE1 9RS	100%	100%
SCP Sugar Limited	Holding company	United Kingdom 20 St Thomas Street, London, SE1 9RS	100%	100%
Various Eateries Trading Limited	Licensed restaurants	United Kingdom 20 St Thomas Street, London, SE1 9RS	100%	100%
Noci Islington Limited	Property management services	United Kingdom 20 St Thomas Street, London, SE1 9RS	100%	100%
Coppa Club (Haslemere) Limited	Property management services	United Kingdom 20 St Thomas Street, London, SE1 9RS	100%	100%
Coppa Club Limited	Property management services	United Kingdom 20 St Thomas Street, London, SE1 9RS	100%	100%
Coppa (Bath) Limited	Property management services	United Kingdom 20 St Thomas Street, London, SE1 9RS	100%	-
Coppa Club Cardiff Limited	Property management services	United Kingdom 20 St Thomas Street, London, SE1 9RS	100%	-
Tavolino Limited	Dormant	United Kingdom 20 St Thomas Street, London, SE1 9RS	100%	-
Coppa Limited	Dormant	United Kingdom 20 St Thomas Street, London, SE1 9RS	100%	100%

 

*Indicates direct investment of the Company, other companies are held by direct subsidiaries

The two subsidiary companies set out above, Rare Bird Hotels at Sonning Limited (Registered Company Number 12764418) and Rare Bird Hotels at Streatley Limited (Registered Company Number 12764529) are exempt from the requirement for an audit for the period ended 2 October 2022 under section 479A of the Companies Act 2006 in respect of that period, as the ultimate parent company, Various Eateries Plc, which has prepared audited consolidated financial statements, is providing a guarantee under section 479C of the Companies Act 2006 in respect of that period, and all members of the companies above agree to the exemption of an audit for the period ended 2 October 2022.

 

			2 October 2022		3 October 2021
			£ 000		£ 000
Summary of investments in subsidiaries
At start and end of financial period			9,325		9,325

There were no additions by the Company in the period.

 

 

16 Inventories

	Group				Company
	2 October 2022		3 October 2021		2 October 2022		3 October 2021
	£ 000		£ 000		£ 000		£ 000
Food and beverage	285		234		-		-
Consumables	523		312		-		-
	808		546		-		-
Inventories recognised as an expense in the period totalled £9,828,000 (2021: £5,078,000).

 

17 Trade and other receivables

	Group				Company
	2 October 2022		3 October 2021		2 October 2022		3 October 2021
	£ 000		£ 000		£ 000		£ 000
Trade receivables	204		137		-		-
Receivables from subsidiaries	-		-		42,632		40,872
Prepayments	907		579		-		-
Other receivables	1,452		788		-		-
	2,563		1,504		42,632		40,872

 

All of the trade receivables were non-interest bearing, receivable under normal commercial terms, and the Directors do not consider there to be any material expected credit loss. The Directors consider that the carrying value of trade and other receivables approximates to their fair value.

 

18 Cash and bank balances

	Group				Company
	2 October 2022		3 October 2021		2 October 2022		3 October 2021
	£ 000		£ 000		£ 000		£ 000
Cash and bank balances	9,390		19,716		-		-

 

 

19 Trade and other payables

 

	Group				Company
	2 October 2022		3 October 2021		2 October 2022		3 October 2021
	£ 000		£ 000		£ 000		£ 000
Trade payables	2,232		1,544		-		-
Payables to subsidiaries	-		-		1,863		1,146
Accrued expenses	3,805		5,028		-		-
Social security and other taxes	1,363		923		-		-
Other payables	1,194		906		-		-
Lease liabilities due in less than one year	2,826		2,842		-		-
	11,420		11,243		1,863		1,146

 

 

 

 

20 Current borrowings

 

	Group				Company
	2 October 2022		3 October 2021		2 October 2022		3 October 2021
	£ 000		£ 000		£ 000		£ 000
Borrowings from related parties	12,707		12,438		-		-

 

Borrowings from related parties classed as payable within 12 months includes two deep discounted bond instruments issued by VEL Property Holdings Limited and by Various Eateries Trading Limited.

 

The deep discounted bond instrument issued by VEL Property Holdings Limited was issued in January 2022, the subscription amount was £2,584,000, the nominal value £2,791,000, the final redemption date being 14 January 2023. The discount is recognised between subscription and redemption date, resulting in £147,000 of accrued financing costs as at the reporting date.

 

The deep discounted bond instrument issued by Various Eateries Trading Limited was in April 2022, with a subscription price of £9,515,000, a nominal value of £10,001,000, and a term of 12 months. The discount is recognised between subscription and redemption date resulting in £226,000 of accrued financing costs at the reporting date. The balance of £608,000 (2021: £1,038,000) under the August 2019 loan agreement matures in April 2023, bears cash settled interest at 3.75% above SONIA (2021: cash settled interest at 3.75% above LIBOR.

 

21 Non-current borrowings

	Group				Company
	2 October 2022		3 October 2021		2 October 2022		3 October 2021
	£ 000		£ 000		£ 000		£ 000
Lease liabilities due after more than one year	29,244		22,128		-		-

 

 

The loans and borrowings classified as financial instruments are disclosed in note 25.

 

The Group's exposure to market and liquidity risk in respect of loans and borrowings is disclosed in the financial instruments note.

 

 

22 Provisions for liabilities

 

Group			52 weeks ended 2 October 2022
Authorised Guarantee Agreements ('AGAs')			£ 000
At start and end of financial period			357

 

	53 weeks ended 3 October 2021
Authorised Guarantee Agreements ("AGAs")	£ 000
At start of previous financial period	461
Release of provision in the prior year	(104)
At end of previous and current financial period	357

 

 

The provision relates to the annual rental cost of three (2021: three) previously operated sites that have been disposed of via assignment of lease and include Authorised Guarantee Agreements ('AGAs') as part of the assignment arrangement (see also note 30).

 

23 Share capital and share premium

Authorised, allotted, called-up and fully paid shares
	2 October 2022				3 October 2021
	No. 000		£ 000		No. 000		£ 000
Ordinary shares of £0.01 each	89,008		890		89,008		890

 

There were no movements in ordinary share capital in the period ended 2 October 2022

 

Ordinary shares

Ordinary shares entitle the holder to participate in dividends and the proceeds on the winding up of the Company in proportion to the number of and amounts paid on the shares held. The fully paid ordinary shares have a par value of £0.01 and the company does not have a limited amount of authorised capital.

 

Employee benefit trust shares reserve

The Group presents these shares as an adjustment to own equity at the period end date through the employee benefit trust shares reserve, until the point that the shares are awarded, and cease to be conditional awards of shares. The award of shares is conditional upon certain vesting criteria, as outlined in note 26.

 

24 Retirement benefit schemes

 

Group personal pension scheme

The Group operates group personal pension schemes for all qualifying employees. The assets of the schemes are held separately from those of the Group.

The total cost charged to income of £220,000 (2021: £179,000) represents contributions payable to these schemes by the Group at rates specified in the rules of the schemes. As at 2 October 2022, contributions of £30,000 (2021: £26,000) due in respect of the current reporting period had not been paid over to the schemes.

 

 

25 Financial instruments

 

Group
Financial assets at amortised cost
			2 October 2022		3 October 2021
			£ 000		£ 000
Cash at bank and in hand			9,390		19,716
Trade and other receivables			1,656		925
			11,046		20,641

 

Reconciliation of liabilities arising from financing activities

	Lease Liabilities		Other Borrowings		Total
	£ 000		£ 000		£ 000
At start of financial period	24,970		12,438		37,408
New borrowings	7,315				7,315
DDB renewal	-		700		700
Interest charge	1,344		-		1,344
Repayments during the period	(1,559)		(431)		(1,990)
At end of financial period	32,070		12,707		44,777

 

Valuation methods and assumptions

Trade receivables are all due for settlement in less than one year. The Directors consider that the carrying amount of trade and other receivables is approximately equal to their fair value due to their short-term nature.

 

Financial liabilities at amortised cost
				2 October 2022		3 October 2021
				£ 000		£ 000
Trade and other payables				39,190		32,447
Borrowings from related parties				12,707		12,438
				51,897		44,885

 

Valuation methods and assumptions

The Directors consider that the carrying amount of trade and other payables is approximately equal to their fair value due to their short-term nature. The fair value of financial liabilities is estimated by discounting the remaining contractual maturities at the current market interest rate that is available for similar financial liabilities.

 

Fair value hierarchy

The tables above detail the Group's assets and liabilities disclosed at fair value. Using a three-level hierarchy, based on the lowest level of input that is significant to the entire fair value measurement, all assets and liabilities shown above are considered to be level 3: 'Unobservable inputs for the asset or liability'. There were no transfers between levels during the financial period.

 

Financial risk management and impairment of financial assets

The Group's activities expose it to a variety of financial instrument risks. The risk management policies employed by the Group to manage these risks are discussed below. The primary objectives of the financial instrument risk management function are to establish risk limits, and then ensure that exposure to risks stay within these limits.

 

Capital risk management

The Group's objectives when managing capital is to safeguard its ability to continue as a going concern, so that it can provide returns for shareholders and benefits for other stakeholders and to maintain an optimum capital structure to reduce the cost of capital.

 

Capital is regarded as total equity, as recognised in the statement of financial position, plus net debt. Net debt is calculated as total borrowings less cash and cash equivalents.

 

In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.

 

The Company is subject to certain financing arrangements covenants and meeting these is given priority in all capital risk management decisions. There have been no events of default on the financing arrangements during the financial period.

 

Credit risk management

The Group's credit risk is attributable to trade and other receivables and cash with the carrying amount best representing the maximum exposure to credit risk. The Group places its cash with banks with high quality credit standings. Trade and other receivables relate to day-to-day activities which are entered into with creditworthy counterparties.

 

Market risk management

The Group's activities expose it economic factors, the Directors closely monitor market conditions and consider any impact on the Group's existing strategy.

 

Interest rate risk management

The Group is exposed to interest rate risk as the Group's borrowings have an interest rate of 3.75% above SONIA.

Liquidity risk management

Liquidity risk arises from the Group's management of working capital and the finance charges and principal repayments on its debt instruments.  It is the risk that the Group will encounter difficulty in meeting its financial obligations as they fall due.

 

Management review cashflow forecasts on a regular basis to determine whether the Group has sufficient cash reserves to meet future working capital requirements and to take advantage of business opportunities.

 

Remaining contractual maturities

The following tables detail the company's remaining contractual maturity for its financial instrument liabilities. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the financial liabilities are required to be paid. The tables include both interest and principal cash flows disclosed as remaining contractual maturities and therefore these totals may differ from their carrying amount in the statement of financial position.

 

	Weighted average interest rate		1 year or less		Between 1 and 2 years		Between 2 and 5 years		Over 5 years		Remaining contractual maturities
2022	%		£ 000		£ 000		£ 000		£ 000		£ 000
Non-derivatives
Trade payables	-		2,232		-		-		-		2,232
Other payables	-		4,999		-		-		-		4,999
Borrowings - Deep Discount Bond	-		12,792		-		-		-		12,792
Borrowings - loan	3.75% + SONIA		608		-		-		-		608
Lease liability	4.5%		3,157		3,669		11,178		26,451		44,455
			23,788		3,669		11,178		26,451		65,086

 

	Weighted average interest rate		1 year or less		Between 1 and 2 years		Between 2 and 5 years		Over 5 years		Remaining contractual maturities
2021	%		£ 000		£ 000		£ 000		£ 000		£ 000
Non-derivatives
Trade payables	-		1,544		-		-		-		1,544
Other payables	-		5,934		-		-		-		5,934
Borrowings - Deep Discounted Bond	-		12,099		-		-		-		12,099
Borrowings - loan	3.75% + LIBOR		1,038		-		-		-		1,038
Lease liability	4.5%		2,970		2,999		8,627		18,387		32,983
			23,585		2,999		8,627		18,387		53,598

 

The cash flows in the maturity analysis above are not expected to occur significantly earlier than contractually disclosed above.

 

26 Share based payments

 

As at 2 October 2022, the Group maintained three separate share based payment scheme for employee remuneration (2021: three):

Various Eateries Joint Share Ownership Scheme ("JSOP Scheme 1")

Various Eateries Joint Share Ownership Scheme ("JSOP Scheme 2")

Various Eateries Company Share Option Plan ("CSOP")

 

 

JSOP Scheme 1

 

In accordance with IFRS 2 "Share-based Payment", the value of the awards is measured at fair value at the date of the grant. The fair value is expensed on a straight-line basis over the vesting period, based on management's estimate of the number of shares that will eventually vest. A charge of £713,000 (2021: £818,000) has been recognised in profit and loss by the Group in the period ended 2 October 2022.

 

The JSOP is part of the remuneration package of the Group's senior management. Participants in this scheme have to be employed until the end of the agreed vesting period. Upon vesting, the holder is entitled to purchase ordinary shares at the market price determined at grant date.

 

 

	JSOP (Scheme 1)
	Number of shares
	Granted		Exercisable		Total
At 3 October 2021	5,809,523		-		5,809,523
Granted	-		-		-
Vesting	(5,809,523)		5,809,523		-
At 2 October 2022	-		5,809,523		5,809,523
At 27 September 2020	5,809,523		-		5,809,523
Granted	-		-		-
At 3 October 2021	5,809,523		-		5,809,523

 

The fair value of these options granted was determined using a Black-Scholes model. The following principal assumptions were used in the valuation:
			JSOP
Grant date			18 September 2020
Vesting period ends			31 August 2022
Share price at date of grant			£0.73
Volatility			66.98%
Option life			1.95 years
Dividend yield			0.00%
Risk-free investment rate			(0.13) %
Fair value per option at grant date			£0.26
Exercise price at date of grant			£0.73
Exercisable from / to			31 August 2022 / 31 August 2030
Remaining contractual life			nil

 

The historical volatility has been calculated based on the share returns of four comparators for a period preceding the valuation date equal to the initial expected term of the options, i.e. a period of 1.92 years. The total estimated fair value of the options granted on 18 September 2020 that was recognised in expenses over the vesting period is £1,513,000.

 

 

JSOP Scheme 2

 

A charge of £35,000 (2021: £20,000) has been recognised in profit and loss by the Group in the period ended 2 October 2022.

 

The JSOP is part of the remuneration package of the Group's senior management. Participants in this scheme have to be employed until the end of the agreed vesting period. Upon vesting, the holder is entitled to purchase ordinary shares at the market price determined at grant date.

 

		JSOP (Scheme 2)
		Number of shares				Exercise price per share (£)
	At 3 October 2021		360,000				1.09
	Granted		-				-
	Lapsed 29 June 2022		(360,000)				1.09
	At 2 October 2022		-				-
	At 27 September 2020		-				-
	Granted 11 May 2021		360,000				1.09
	At 3 October 2021		360,000				1.09

 

 

26 Share based payments

 

			JSOP
Grant date			11 May 2021
Vesting period ends			Various
Share price at date of grant			£1.03
Volatility			64.17%
Option life			3.89
Dividend yield			0.00%
Risk-free investment rate			0.24%
Exercise price at date of grant			£1.09
Exercisable from / to			31 March 2025 / 31 March 2026
Remaining contractual life			2.50 years

The historical volatility has been calculated based on the share returns of four comparators for a period preceding the valuation date equal to the initial expected term of the options, i.e. a period of 3.89 years. The total estimated fair value of the options granted on 11 May 2021 to be recognised in expenses over the vesting period was £193,000. All options under the scheme as at 2 October 2022 have lapsed.

 

 

CSOP

 

A charge of £82,000 (2021: £6,000) has been recognised in profit and loss by the Group in the period ended 2 October 2022.

 

		CSOP
	Number of shares			Exercise price per share (£)
At 3 October 2021	92,402			1.09
Granted 17 January 2022	990,441			0.69
Lapsed 11 May 2022	(92,402)			1.09
Granted  25 August 2022	250,000			0.42
At 2 October 2022	1,240,441			various
At 27 September 2020	-			-
Granted	92,402			1.09
At 3 October 2021	92,402			1.09

 

The fair value of the options is estimated at the date of grant using a Black-Scholes valuation method. The total estimated fair value of the options granted during the year to be recognised over the vesting period is £340,000.

 

 

 

		CSOP	CSOP	CSOP
Grant date		11 May 2021	17 January 2022	25 August 2022
Vesting period ends		11 May 2024	17 January 2025	25 August 2025
Share price at date of grant		£1.08	£0.69	£0.42
Volatility		65.66%	65.66%	65.66%
Option life at grant		3 years	3 years	3 years
Dividend yield		0.00%	0.00%	0.00%
Risk-free investment rate		0.87 %	0.87 %	0.87 %
Fair value per option at grant date		£0.49	£0.30	£0.19
Exercise price at date of grant		£1.08	£0.69	£0.42
Exercisable from / to		11 May 2024 / 11 May 2031	17 January 2025 / 17 January 2032	25 August 2025 / 25 August 2032
Remaining contractual life		1.6 years	2.3 years	2.9 years

 

 

 

27 Related party transactions

 

Transactions with related parties include management charges for services provided by Osmond Capital Limited, which has common shareholders with controlling influence with the Company, of £198,000 (2021: £200,000). In addition, H E M Osmond is the principal lender of the £12,099,000 borrowings (2021: £10,000,000) and a shareholder with controlling influence of Xercise2 Ltd which is a significant shareholder of the Company.

As at 2 October 2022, there was £9,000 (2021: £20,275) of accrued cash interest payable on borrowings from related parties.

Remuneration of key management personnel

The remuneration of the Directors of the Company and its subsidiaries and other key management, who are the key management personnel of the Group, is set out below in aggregate for each of the categories specified in IAS 24 "Related Party Disclosures".            

	52 weeks ended 2 October 2022		53 weeks ended 3 October 2021
	£ 000		£ 000
Salaries and other short term employee benefits	641		716
Employers national insurance contributions	83		88
Post-employment benefits	11		15
	735		819

 

During the period, the Company entered the following trading transactions with related parties

	52 weeks ended 2 October 2022				53 weeks ended 3 October 2021
	Purchase of Goods / Services		Sale of Goods / Services		Purchase of Goods / Services		Sale of Goods / Services
	£ 000		£ 000		£ 000		£ 000
SCP Newbury Manor Limited	15		-		15		-
Osmond Capital Limited	198		-		200		-
The Great House at Sonning Limited	774		-		657		-
CCO Cygnet Limited	888		-		748		-
	1,875		-		1,620		-

 

 

The following amounts were outstanding at the statement of financial position date:

	2 October 2022				3 October 2021
	Amounts owed to related parties		Amounts owed by related parties		Amounts owed to related parties		Amounts owed by related parties
	£ 000		£ 000		£ 000		£ 000
The Great House at Sonning Limited	-		-		1		53
Rare Bird Hotels Limited	-		-		-		119
CCO Cygnet Limited	207		-		-		-
Mudlark Hotels Limited	-		396		-		-
	207		396		1		172

 

SCP Newbury Manor Limited, Osmond Capital Limited, The Great House at Sonning Limited, Rare Bird Hotels Limited, CCO Cygnet Limited and Mudlark Hotels Limited are related parties of the Company because they have common shareholders with controlling influence with the Company.

 

Sales and purchases of goods and services between the related parties were made at market prices discounted to reflect the relationships between the parties.

 

The amounts outstanding are unsecured and will be settled in cash. No guarantees have been given or received. No provisions have been made for doubtful debts in respect of the amounts owed by related parties.

 

 

28 Controlling party

The ultimate controlling party of the Company is H E M Osmond.

 

 

29 Post balance sheet events                    

 

VEL Property Holdings Limited funding

Within current liabilities (note 20) is a deep discounted bond instrument with a nominal value of £2,791,000 and a final redemption date of 14 January 2023. In January 2023, this was replaced by a new deep discounted bond instrument with a nominal value of £2,902,000 and a final redemption date of 14 July 2023.

 

Various Eateries Trading Limited funding

Within current liabilities (note 20) is a deep discounted bond instrument with a nominal value of £10,001,000 and a final redemption date of 15 April 2023. In February 2023, this was replaced by a new deep discounted bond instrument with a nominal value of £10,802,000 and a final redemption date of 15 April 2024.

 

 

 

30 Contingent liabilities

 

Authorised Guarantee Agreements

There are 8 (2021: 9) previously operated sites that have been disposed of via assignment of lease and include Authorised Guarantee Agreements ('AGAs') as part of the assignment arrangement. There is a risk that the sites would be returned if the assigned leaseholders were to default on their contractual obligations with their respective landlords, the risk of which was heightened as a result of the coronavirus (Covid-19) outbreak. The total annual rental cost for these sites is £559,000, of which £357,000 (2021: £357,000) has been provided for (see note 22). The average remaining lease length is 6 years.

 

CJRS claim

The Group made material claims under the CJRS schemes in order to support the business through the pandemic.  Given multiple changes to the rules governing the schemes, as well as the degree of complexity in the various rules, the Group undertook an external review of past claims to confirm their validity. The directors are of the opinion that claims made to date are valid and materially correct and so do not consider the likelihood of material outflow as a result of this review to be probable.