Report of the directors for the 52 weeks ended 25 December 2022

The Directors present their report together with the audited financial statements for the 52 week period ended 25 December 2022 (comparative period 52 weeks to 26 December 2021).

Throughout the year, in performance of its duties, and in compliance with Section 172 of the Companies Act, the Board has had regard to the interests of the Group's key stakeholders (such as employees and customers) and taken account of the potential impact on these stakeholders of the decisions it has made. In order to comply with Section 172, the Board is required to include a statement setting out the way in which Directors have discharged these duties during the year.   Details of how the Board had regard to the following S172 Matters are as follows:

 

S172 Matters	Specific examples
1.    The likely consequences of any decision in the long term	·    Our corporate governance framework as described in the 2022 annual report ·    Communications with our shareholders through our website, circulars, AGM and post results investor meetings
2.    The interests of the Group's employees	·    Employee engagement through newsletters, communication tools, surveys and career development opportunities including apprenticeship ·    Established whistleblowing and safeguarding procedures
3.    The need to foster the Group's business relationships with suppliers, customers and others	·    Building long-term relationships with suppliers ·    Encouraging and responding to customer feedback through websites, social media and our feedback system
4.    The impact of the Group's operations on the community and the environment	·    Local community involvement with the NHS ·    Working with the local community ·    Recycling where possible
5.    The desirability of the Group maintaining a reputation for high standards of business conduct	·    Regular staff training and communication ·    Restaurant visits and audit processes
6.    The need to act fairly between members of the Group	·    Maintaining an open dialogue with our shareholders ·    Stakeholder engagement

 

Results and dividends

 

The consolidated statement of comprehensive income is set out below and shows the loss for the period.

The Directors do not recommend the payment of a dividend (2021 - £nil).

Post balance sheet events

 

Post balance sheet events are set out in Note 31.

Future developments

 

The outlook and future developments are set out in the Chairman's statement and the Strategic Report.

 

Principal activities

 

The Group's principal activity is the operation of restaurants.

 

Directors

The Directors of the Group during the period were as follows:

Executive

 

Daniel Jonathan Plant

Mayuri Vachhani *

Harald Samúelsson

Non-Executive

Keith Lassman

Wendy Dixon (appointed 22 June 2022)

 

*Mayuri Vachhani is stepping down from the Board and leaving the Company on 31 March 2023

 

Directors' interest in shares

		As at 25 December 2022			As at 26 December 2021
	Director	Ordinary shares of 0.1p each	%		Ordinary shares of 0.1p each	%
	Daniel Jonathan Plant	12,317,448	8.4%		7,091,902	5.0%
	Samuel Kaye (resigned 14 May 2021)	20,882,197	14.3%		20,882,197	14.8%
	Keith Lassman	1,421,983	1.0%		1,421,983	1.0%
	Mayuri Vachhani	-	-		-	-
	Harald Samúelsson	-	-		-	-
	Wendy Dixon	-	-		-	-

 

Share options

	Director		Number	Exercise price	Grant date	Vesting period	Expiry date
	Mayuri Vachhani		750,000	£0.03	17/10/2019	3 years	17/10/2029

 

 

B ordinary shares

	Director		Number	Exercise price	Date	Vesting period	Expiry date
	Daniel Jonathan Plant
	'B' shares issued		15,676,640	£0.00	15/1/2021	1,2 4 years	15/1/2026
	Conversion to ordinary shares		(5,225,546)	£0.00	27/06/2022
	'B' shares balance		10,451,094	£0.00		1,2 4 years	15/1/2026

 

In January 2021, Daniel Jonathan Plant was awarded 15,676,640 'B' shares in Tasty plc which can be converted to ordinary 'A' shares subject to achievement of hurdle rates relating to the Company's share price.  Following achievement of the first hurdle on 27 June 2022, 5,225,546 'B' shares converted to ordinary shares.

Employees

 

Applications from disabled persons are given full consideration providing the disability does not seriously affect the performance of their duties. Such persons, once employed, are given appropriate training and equal opportunities.

The Group takes a positive view toward employee communication and has established systems for ensuring employees are informed of developments and that they are consulted regularly.

Environment

Our recycling has dropped to an average of 35% (2021: 45%) due to producing less glass waste at points which made up the majority of our recycling weight previously. This was in part due to the bottle shortage and the period where we used canned drinks (weighing a lot less) and partly by moving more branches to draft beer. Our refuse provider has confirmed that none of our waste goes to landfill.

As part of our ongoing energy efficiency programme there has been a focus on energy saving. This includes a rigorous check list for branches which have been and may be required to close during the pandemic.

Our waste oil is collected and converted into bio diesel and biogas to ensure that none is wasted. A percentage of this is added to regular petrol and diesel reducing the carbon from burning 100% petrol or diesel. In the last 12 months we had 76 tonnes of used cooking oil collected and turned into bio diesel/gas, which saved 176 tonnes of carbon being released into the atmosphere. This equates to an average of 150 family cars worth of CO₂ being removed from the atmosphere on a monthly basis.

The Group continues to work with its delivery partners in converting all our delivery packaging to biodegradable and recyclable materials.  We have stopped using plastic straws, committed to a policy recommended by the Humane League and are currently looking at ways to reduce our carbon footprint.

The Group presents its greenhouse gases ("GHG") emissions and energy use data under Streamlined Energy and Carbon Reporting ("SECR") for the 52-week period  ended 25 December 2022:

	tCO2e	tCO2e
	52 weeks ended	52 weeks ended
	25 December 2022	26 December 2021
Scope 1 - Natural Gas	987	1,061
Scope 2 - Electricity	1,461	1,431
Scope 3 - Grey Fleet Mileage	165	83
Total	2,613	2,575

 

An energy intensity ratio of 0.134 (2021: 0.142) has been measured using the metric of tonnes CO₂e per m² floor area ("tCO₂e").

The Group's total energy consumption for the 52-week period ended 25 December 2022 was 13,638,208 kWh (2021:12,872,041 kWh) the increase reflecting a greater number of our sites trading in 2022, with no Covid-19 related restrictions.

Donations

The Group made no charitable or political donations in the period (2021: none).

Financial Instruments

Details of the use of financial instruments and the principal risks faced by the Group are contained in Note 27 to the financial statements.

Going concern

 

At the time of approving the financial statements, the Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. In reaching this conclusion the Directors have considered the financial position of the Group, together with its forecasts for the next 12 months and taking into account possible changes in trading performance.

 

The Group monitors cash balances and prepares regular forecasts, which are reviewed by the Board.  These forecasts include our best estimates and judgements based on currently available information and the current environment. Judgement is particularly required as to the impact on trade of cost-of-living crisis and inflation.

Given the ability of the Group to manage costs, cash position and the unutilised overdraft, the Directors believe that it remains appropriate to prepare the financial statements on a going concern basis. The going concern basis of accounting has, therefore, been adopted in preparing the financial statements.

Disclosure of information to auditors

Each of the persons who are directors at the time when this Directors' Report is approved confirm that:

 

·    so far as he/she is aware there is no relevant audit information of which the Company's auditor is unaware and

·    that he/she has taken all the steps that he/she ought to have taken as a director to make himself/herself aware of any relevant audit information and to establish that the Company's auditor is aware of that information.

 

Auditors

Haysmacintyre LLP were appointed as the auditors and have expressed their willingness to continue in office and a resolution to re-appoint them will be proposed at the annual general meeting.

On behalf of the Board.

 

Daniel Jonathan Plant
Chief Executive Officer
29 March 2023

 

Statement of directors' responsibilities

The Directors are responsible for preparing the strategic report, the annual report and the financial statements in accordance with applicable law and regulations.

Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors have elected to prepare the Group and Company financial statements in accordance with International Financial Reporting Standards (IFRSs) as adopted by the United Kingdom. Under company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Group and the Company and of the profit or loss of the Group for that period. The Directors are also required to prepare financial statements in accordance with the AIM Rules for Companies issued by the London Stock Exchange.

In preparing these financial statements, the Directors are required to:

·    select suitable accounting policies and then apply them consistently;

·    make judgements and accounting estimates that are reasonable and prudent;

·    state whether they have been prepared in accordance with IFRSs as adopted by the United Kingdom, subject to any material departures disclosed and explained in the financial statements; and

·    prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group will continue in business.

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Group's transactions and disclose with reasonable accuracy at any time the financial position of the Group and enable them to ensure that the financial statements comply with the requirements of the Companies Act 2006. They are also responsible for safeguarding the assets of the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Website publication

The Directors are responsible for ensuring the annual report and the financial statements are made available on a website. Financial statements are published on the Company's website (www.dimt.co.uk) in accordance with legislation in the United Kingdom governing the preparation and dissemination of financial statements, which may vary from legislation in other jurisdictions. The maintenance and integrity of the Company's website is the responsibility of the Directors. The Directors' responsibility also extends to the ongoing integrity of the financial statements contained therein.

 

Consolidated statement of comprehensive income

for the 52 weeks ended 25 December 2022                                                                                                                       

					Note		52 weeks ended 25 December 2022			Restated 52 weeks ended 26 December 2021
							£'000			£'000
			Revenue		3		44,027			34,909
			Cost of sales				(44,123)			(33,567)
			Gross (loss)/ profit				(96)			1,342
			Other income		3		414			4,208
			Operating expenses				(4,370)			(1,902)
			Operating (loss)/ profit before highlighted items				(1,687)			4,112
			Highlighted items		5		(2,365)			(464)
			Operating (loss)/ profit		4		(4,052)			3,648
			Finance income		6		41			-
			Finance expense		6		(2,421)			(2,497)
			(Loss)/ profit before income tax				(6,432)			1,151
			Income tax		9		-			-
			(Loss)/ profit and total comprehensive (loss)/ income for the period				(6,432)			1,151
	Earnings per share for (loss)/ profit attributable to the ordinary equity holders of the company
	Basic earnings per share			10			(4.40p)			0.82p
	Diluted earnings per share			10			(4.03p)			0.72p

The notes below form part of these financial statements.

 

Consolidated statement of changes in equity
for the 52 weeks ended 25 December 2022

		Share capital	Share premium	Merger reserve	Retained earnings	Total
		£'000	£'000	£'000	£'000	£'000
	Balance at 27 December 2020 (as previously stated)	6,061	24,251	992	(30,708)	596
	Prior year adjustment (See Note 13)	-	-	-	2,456	2,456
	Balance at 27 December 2020 (restated)	6,061	24,251	992	(28,252)	3,052
	Cost of placing of ordinary shares	-	3	-	-	3
	Total comprehensive loss for the period (as restated - See Note 13)	-	-	-	1,151	1,151
	Transactions with owners in their capacity as owners:
	Share based payments	-	-	-	120	120
	Balance at 26 December 2021 (restated)	6,061	24,254	992	(26,981)	4,326
	Total comprehensive income for the period	-	-	-	(6,432)	(6,432)
	Transactions with owners in their capacity as owners:
	Share based payments	-	-	-	58	58
	Balance at 25 December 2022	6,061	24,254	992	(33,355)	(2,048)

 

The notes below form part of these financial statements.

 

Company statement of changes in equity
for the 52 weeks ended 25 December 2022

		Share capital	Share premium	Retained profit	Total
		£'000	£'000	£'000	£'000
	Balance at 27 December 2020	6,061	24,251	(23,120)	7,192
	Cost of placing of ordinary shares	-	3	-	3
	Total comprehensive loss for the period	-	-	(145)	(145)
	Transactions with owners in their capacity as owners:
	Share based payments	-	-	120	120
	Balance at 26 December 2021	6,061	24,254	(23,145)	7,170
	Issue of ordinary shares	-	-	-	-
	Total comprehensive loss for the period	-	-	(674)	(674)
	Transactions with owners in their capacity as owners:
	Share based payments	-	-	58	58
	Balance at 25 December 2022	6,061	24,254	(23,761)	6,554

 

The notes below form part of these financial statements.

 

Consolidated balance sheet
At 25 December 2022

				25 December 2022		Restated 26 December 2021
		Note		£'000		£'000
	Non-current assets
	Intangible assets	12		25		28
	Property, plant and equipment	13		17,694		18,026
	Right-of-use assets	13		32,513		36,005
	Other non-current assets	17		65		105
				50,297		54,164
	Current assets
	Inventories	16		2,191		2,103
	Trade and other receivables	17		1,633		1,355
	Cash and cash equivalents			7,002		11,005
				10,826		14,463
	Total assets			61,123		68,627
	Current liabilities
	Trade and other payables	18		(12,393)		(10,493)
	Lease liabilities	14		(1,953)		(2,024)
	Borrowings	21		-		(313)
				(14,346)		(12,830)
	Non-current liabilities
	Provisions	19		(339)		(297)
	Lease liabilities	14		(48,358)		(50,157)
	Long-term borrowings	21		-		(937)
	Other Payables	18		(128)		(80)
				(48,825)		(51,471)
	Total liabilities			(63,171)		(64,301)
	Total net (liabilities)/ assets			(2,048)		4,326
	Equity
	Share capital	22		6,061		6,061
	Share premium	23		24,254		24,254
	Merger reserve	23		992		992
	Retained deficit	23		(33,355)		(26,981)
	Total equity			(2,048)		4,326

The financial statements were approved by the Board of Directors of the Company and authorised for issue on 29 March 2023 and signed on their behalf by Daniel Jonathan Plant.

The notes below form part of these financial statements.

 

Company balance sheet
At 25 December 2022

Company number: 5826464

		Note		25 December 2022		26 December 2021
				£'000		£'000
	Non-current assets
	Investments	15		3,392		3,334
	Other non-current assets	17		3,162		3,836
	Total net assets			6,554		7,170
	Equity
	Share capital	22		6,061		6,061
	Share premium	23		24,254		24,254
	Retained deficit	23		(23,761)		(23,145)
	Total equity			6,554		7,170

The Parent Company, Tasty plc, has taken advantage of the exemption in s408 of the Companies Act 2006 not to publish its own income statement. The Parent Company made a loss of £0.7m (2021 - loss of £0.14m) for the period.

The Parent Company has not recognised leases under IFRS 16 in its balance sheet as management have concluded that the substance of the leases is held by the subsidiary, Took Us A Long Time Ltd ("TUALT") and recognised within its Company accounts.

The financial statements were approved by the board of directors of the Company and authorised for issue on 29 March 2023 and signed on their behalf by Daniel Jonathan Plant.

The notes below form part of these financial statements.

 

Consolidated statement of cash flows
For the 52 weeks ended 25 December 2022

 

		Note		52 weeks ended 25 December 2022		52 weeks ended 26 December 2021
				£'000		£'000
	Operating activities
	Cash generated from operations	29		4,444		7,826
	Net cash inflow from operating activities			4,444		7,826
	Investing activities
	Proceeds from sale of property, plant and equipment			-		3
	Purchase of property, plant and equipment	13		(1,645)		(544)
	Interest received			41		-
	Net cash inflow from investing activities			(1,604)		(541)
	Financing activities
	Net proceeds from issues of ordinary shares			-		3
	Bank loan receipt	30		-		1,250
	Bank loan repayment	30		(1,250)		-
	Finance expense	6		(2,421)		(2,497)
	Principal paid on lease liabilities	30		(3,172)		(3,064)
	Net cash used in from financing activities			(6,843)		(4,308)
	Net increase in cash and cash equivalents			(4,003)		2,977
	Cash and cash equivalents brought forward			11,005		8,028
	Cash and cash equivalents as at the end of the period			7,002		11,005

 

The notes below form part of these financial statements.

 

Company statement of cash flows
For the 52 weeks ended 25 December 2022

 

		Note		52 weeks ended 25 December 2022		52 weeks ended 26 December 2021
				£'000			£'000
	Operating activities
	Cash generated from operations			-			(3)
	Net cash outflow from operating activities			-			(3)
	Financing activities
	Net proceeds from issues of ordinary shares			-			3
	Net cash flows used in financing activities			-			3
	Net increase in cash and cash equivalents			-			-
	Cash and cash equivalents brought forward			-			-
	Cash and cash equivalents as at the end of the period			-			-

 

 

The notes below form part of these financial statements.

Notes
forming part of the financial statements for the 52 weeks ended 25 December 2022

1      Accounting policies

Tasty plc ("Tasty") is a publicly listed company incorporated and domiciled in England and Wales. The Company's ordinary shares are quoted on AIM. Tasty's registered address is 32 Charlotte Street, London, WC1T 2NQ. The Group's principal activity is the operation of restaurants.

(a)  Statement of compliance

These financial statements of the Group and Company have been prepared in accordance with International Financial Reporting Standards, International Accounting Standards and Interpretations (collectively IFRS) issued by the International Accounting Standards Board (IASB) as adopted by the United Kingdom ("adopted IFRSs"). These financial statements have also been prepared in accordance with those parts of the Companies Act 2006 that are relevant to companies that prepare their financial statements in accordance with IFRS.

 

(b)  Basis of preparation

The financial statements cover the 52-week period ended 25 December 2022, with a comparative period of the 52-week period ended 26 December 2021. The financial statements are presented in sterling, rounded to the nearest thousand and are prepared on the historical cost basis. The accounting policies of the Company are consistent with the policies adopted by the Group.

 

(c)   Going concern

As at 25 December 2022, the Group had net liabilities of £2.0m (2021: net assets of £4.3m). The Group meets its day-to-day working capital requirements through the generation of operating cashflow, equity raise and bank finance.  The Group's principal sources of funding are:

·      Issues of ordinary share capital in the Company on AIM.

·    Bank debt when required - The Group repaid and cancelled the outstanding Barclays Bank facility of £1.1m as it was unutilised, and it was considered prudent given the increasing interest rate charges.  Based on the base rate at the time, there will be an annualised interest saving of approximately £57,000 which would be considerably more at today's rate. However, the Group has a modest £250,000 overdraft facility.

 

The pandemic led to high uncertainty and disruption in the economy and hospitality industry; the energy and cost-of-living crisis followed this.   Throughout this period costs were controlled carefully, and cash outflows reduced.  Over the last 12 months we have seen inflationary increases directly due to utility increases and shortages caused by the war in Ukraine.  These increases appear to have stabilised. 

The Group monitors cash balances and prepares regular forecasts, which are reviewed by the Board.  These forecasts include our best estimates and judgements based on currently available information and current environment. Judgement is particularly required as to the impact on trade of cost-of-living crisis and inflation.

Given the ability of the Group to manage costs, cash position and the availability of the unutilised overdraft the Directors believe that it remains appropriate to prepare the financial statements on a going concern basis.

(d)  Leases

 

Group's accounting policies for leases are as follows:

 

Lessee accounting

IFRS 16 distinguishes between leases and service contracts on the basis of whether the use of an identified asset is controlled by the customer. Control is considered to exist if the customer has:

•     The right to obtain substantially all of the economic benefits from the use of an identified asset; and

•     The right to direct the use of that asset in exchange for consideration.

 

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 12 months or less.

 

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 amortised on a straight-line basis over the remaining term of the lease.

The Group's leases are held across Tasty plc or Took Us Long Time Ltd ("TUALT").  In determining where the assets and liabilities should be accounted for, we have reviewed which entity derives the benefit and rights to use the asset.  In assessing this we have reviewed where the trade occurs, where staff are employed and where day to day activity is managed from.  We have concluded that the substance of the lease is that it is held by TUALT and accordingly recognised the lease liabilities within the TUALT company financial statements.

 

The lease liabilities recognised in TUALT but in the name of Tasty plc totalled £41m at 25 December 2022 (£43m at 26 December 2021).  Accordingly, this balance represents a contingent liability for the Company only.

Lessor accounting

Under IFRS 16, a lessor continues to classify leases as either finance leases or operating leases and account for those two types of leases differently.

Based on an analysis of the Group's operating leases as at 25 December 2022 on the basis of the facts and circumstances that exist at that date, the Directors of the Group have assessed that the impact of this change has not had any impact on the amounts recognised in the Group's consolidated financial statements.

Short-term leases and leases of low-value assets

The Group has elected not to recognise right-of-use assets and lease liabilities for short-term leases that have a lease term of 12 months or less and leases of low value assets. The Group recognises these payments as an expense on a straight-line basis over the lease term. Currently the Group has no low value assets or short-term leases.

 

Covid-19 related rent concessions

 

IFRS 16 defines a lease modification as a change in the scope of a lease, or the consideration for a lease, that was not part of the original terms and conditions of the lease. The Group has considered the Covid-19 related rent concessions and applied the lease modifications accounting.

 

(e)  Changes in accounting policies and disclosures

 

New standards, amendments to standards or interpretations adopted by the Group

Amendments to accounting standards applied in the 52 weeks ended 25 December 2022 were as follows:

•     Definition of Material - amendments to IAS 1 and IAS 8; and

•     Revised Conceptual Framework for Financial Reporting; and

The application of these did not have a material impact on the Group's accounting treatment and has therefore not resulted in any material changes.

New standards, amendments to standards or interpretations not yet adopted by the Group

The following new standards, amendments to standards or interpretations are mandatory for the first time for the financial years beginning on or after 1 January 2022. No standards have been early adopted by the Group.

•     Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 - Interest Rate Benchmark Reform Phase 2

•     Amendment to IFRS 16 - Covid-19-Related Rent Concessions beyond 30 June 2021

•     Annual Improvements to IFRS Standards 2018-2020 Cycle

•     Amendment to IAS 37 - Onerous Contracts: Cost of Fulfilling a Contract

•     Amendment to IAS 1 - Classification of Liabilities as Current or Non-current

•     Amendments to IAS 1 and IFRS Practice Statement 2 - Disclosure of Accounting Policies

•     Amendments to IAS 8 - Definition of Accounting Estimates

We are currently assessing the impact of these new accounting standards and amendments. The amendments are not expected to have any significant impact on the Group.

(f)   Basis of consolidation

The consolidated financial statements consolidate the results of the Company and its subsidiary, Took Us A Long Time Limited. The accounting period of the subsidiary is coterminous with that of the Company.

 

The accounting policies of the subsidiary are consistent with those of the Group. Inter-company transactions, balances and unrealised gains on transactions between group companies are eliminated.

 

(g)  Revenue

The Group's revenue is derived from goods and services provided to the customers from dine-in, delivery and takeaway. Revenue is recognised at the point in time when control of the goods has transferred or service provided to the customer. Control passes to the customers at the point at which food and drinks are provided and the Group has a present right for payment.

 

(h)  Other income

Included in Other income is rental income from operating leases.  Rental income is recognised in the period to which it relates and rent free periods would be spread over the terms of the lease. The cost of these leases is included within the cost of sales.

 

The Group received Government grants in 2021 under the Coronavirus Job Retention Scheme ("CJRS") and "Retail and Hospitality Business Grants" schemes provided by the Government in response to Covid-19's impact on the business. In accordance with IAS 20, the Group recognised the salary expense and recognised the CJRS grant income in profit and loss as the Group became entitled to the grant.  "Retail and Hospitality Business Grants" were recognised when there was reasonable assurance that the Group has met the conditions attaching to these grants.

 

(i)   Retirement benefits: Defined contribution schemes

Contributions to defined contribution pension schemes are charged to the consolidated income statement in the period to which they relate.

 

(j)   Share based payments

Certain employees (including Directors and senior executives) of the Group receive remuneration in the form of share-based payment transactions, whereby employees render services as consideration for equity instruments (e.g. options, shares etc).

 

The cost of this is measured by reference to the fair value at the date on which they are granted. The fair value is determined by using an appropriate pricing model (e.g. binomial or Monte Carlo model).

 

The cost of equity-settled transactions is recognised, together with a corresponding increase in equity, over the period in which the performance and/or service conditions are fulfilled, ending on the date on which the relevant employees become fully entitled to the award (the vesting date). The cumulative expense recognised for equity-settled transactions at each reporting date until the vesting date reflects the extent to which the vesting period has expired and the Group's best estimate of the number of equity instruments that will ultimately vest. The profit or loss charge or credit for a period represents the movement in cumulative expense recognised as at the beginning and end of that period.

 

No expense is recognised for awards that do not ultimately vest, except for awards where vesting is conditional upon a market condition, which are treated as vesting irrespective of whether or not the market condition is satisfied, provided that all other performance and/or service conditions are satisfied. The dilutive effect of outstanding options is reflected as additional share dilution in the computation of earnings per share.

 

(k)  Borrowing costs

Borrowing costs, principally interest charges, are recognised in the income statement in the period in which they are incurred.  Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently carried at amortised cost; any difference between the proceeds (net of transaction costs) and the redemption value is recognised in the income statement over the period of the borrowings using the effective interest method.

 

Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn down. This is also applicable to fees for amendments to the loan facilities. In this case, the fee is deferred until the drawdown occurs. To the extent there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalised as a pre-payment for liquidity services and amortised over the period of the facility to which it relates.

 

(l)   Externally acquired intangible assets

Externally acquired intangible assets are initially recognised at cost and subsequently amortised on a straight-line basis over their useful economic lives. The amortisation expense is included within the cost of sales line in the consolidated income statement.

The significant intangibles recognised by the Group and their useful economic lives are as follows:

 

	Intangible asset	Useful economic life
	Trademarks	10 years

 

(m) Property, plant and equipment

Items of property, plant and equipment are stated at cost less accumulated depreciation (see below) and impairment losses.

Depreciation is provided to write off the cost or valuation, less estimated residual values, of all fixed assets, evenly over their expected useful lives and it is calculated at the following rates:

 

	Leasehold improvements	over the period of the lease
	Fixtures, fittings and equipment	10% per annum straight line
	Computers	20% per annum straight line
	Electric Vehicle	20% per annum straight line
	Right-of-use assets	over the period of the lease

 

Property, plant and equipment are reviewed for impairment in accordance with IAS 36 Impairment of Assets, when there are indications that the carrying value may not be recoverable. Impairment charges are recognised in the statement of comprehensive income. See note 2(d) for further details.

 

(n)  Non-current assets held for sale

Non-current assets are classified as held for sale when the Board plans to sell the assets and no significant changes to this plan are expected. The assets must be available for immediate sale, an active programme to find a buyer must be underway and be expected to be concluded within 12 months with the asset being marketed at a reasonable price in relation to the fair value of the asset. There are currently no assets held for sale as at 25 December 2022.

 

Non-current assets classified as held for sale are measured at the lower of their carrying amount immediately prior to being classified as held for sale and fair value less costs of disposal. Following their classification as held for sale, non-current assets are not depreciated.

 

(o)   Provisions

The Group has recognised provision for dilapidations for a number of sites, where the need to carry out the work has been identified but a full survey and commission has not been undertaken and therefore management has applied their judgment in determining the provision.

 

(p)  Loans and receivables

The Group's loans and receivables comprise trade and other receivables and cash and cash equivalents in the balance sheet. The Company's loans and receivables comprise only inter-Company receivables. Cash and cash equivalents include cash in hand and deposits held with banks.  They are initially recognised at fair value plus transaction costs that are directly attributable to their acquisition or issue and are subsequently carried at amortised cost using the effective interest rate method, less provision for impairment. 

Impairment provisions for trade receivables are recognised based on the simplified approach within IFRS 9 using a provision matrix in the determination of the lifetime expected credit losses. During this process the probability of the non-payment of the trade receivables is assessed. This probability is then multiplied by the amount of the expected loss arising from default to determine the lifetime expected credit loss for the trade receivables. For trade receivables, which are reported net, such provisions are recorded in a separate provision account with the loss being recognised in the consolidated statement of comprehensive income. On confirmation that the trade receivable will not be collectable, the gross carrying value of the asset is written off against the associated provision.

 

Impairment provisions for receivables from the company's subsidiary recognised based on a forward-looking expected credit loss model which uses the forecast results of the subsidiary as a key input. The methodology used to determine the amount of the provision is based on whether there has been a significant increase in credit risk since initial recognition of the financial asset. For those where the credit risk has not increased significantly since initial recognition of the financial asset, twelve month expected credit losses along with gross interest income are recognised. For those for which credit risk has increased significantly, lifetime expected credit losses along with the gross interest income are recognised. For those that are determined to be credit impaired, lifetime expected credit losses along with interest income on a net basis are recognised.

 

(q)  Apprenticeship funding and levy

The payments made under the levy represent a prepayment for training services expected to be received and is recognised as an asset until the receipt of the service. When the training service is received, an appropriate expense is recognised. The apprenticeship grant income is deferred until apprentices receive training under the rule of the scheme and we are satisfied that we have fully complied with the scheme. We have applied an element of judgement until a full inspection is carried out.

 

(r)   Financial liabilities

Financial liabilities include trade payables, and other short-term monetary liabilities, which are initially recognised at fair value and subsequently carried at amortised cost.

 

Bank borrowings were initially recognised at fair value and subsequently measured at amortised cost using the effective interest method. Interest expense includes initial transaction costs and any premium payable on redemption as well as any interest payable while the liability is outstanding.

 

(s)   Inventories

Raw materials and consumables

Inventories are stated at the lower of cost and net realisable value. Cost comprises costs of purchase and other costs incurred in bringing the inventories to their present location and condition. Net realisable value is based on estimated selling price less costs incurred up to the point of sale.

 

Crockery and utensils (Smallwares)

Smallware inventories are held at cost which is determined by reference to the quantity in issue to each restaurant. Smallware inventory relates to small value items which have short life spans relating to kitchen and bar equipment. These items are recorded under inventory as they are utilised in providing food and beverage to customers.

(t)   Taxation

Tax on the profit and loss for the year comprises current and deferred tax. Tax is recognised in the profit and loss except to the extent that it relates to items recognised directly in equity, in which case it is recognised in equity. Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates enacted or substantively enacted at the balance sheet date, and any adjustment to tax payable in respect of previous years.

 

Deferred tax assets and liabilities are recognised where the carrying amount of an asset or liability in the balance sheet differs from its tax base, except for differences arising on:

 

·    The initial recognition of goodwill

·    The initial recognition of an asset or liability in a transaction which is not a business combination and at the time of the transaction affects neither accounting or taxable profit.

 

Recognition of deferred tax assets is restricted to those instances where it is probable that taxable profit will be available against which the difference can be utilised.

 

Deferred tax is provided using the balance sheet liability method, providing for all temporary differences between the carrying amounts of assets and liabilities recorded for reporting purposes and the amounts used for tax purposes.

The amount of the asset or liability is determined using tax rates that have been enacted or substantively enacted by the reporting date and are expected to apply when the deferred tax liabilities or assets are settled or recovered. Deferred tax balances are not discounted.

 

(u)  Goodwill

Goodwill represents the difference between the fair value of consideration paid and the carrying value of the assets and liabilities acquired. Goodwill arose on acquisition of a group of leases.

Goodwill is stated as originally calculated less any accumulated provision for impairment. Goodwill is allocated to individual CGUs, where each CGU is a restaurant, and is subject to an impairment review at each reporting date. 

 

(v)  Investments

Investments in subsidiaries are included in the Company's Statement of Financial Position at cost less provision for impairment.

 

(w) Share capital

The Company's ordinary shares are classified as equity instruments.

 

(x)  Operating profit

Operating profit is stated after all expenses, but before financial income or expenses. Highlighted items are items of income or expense which because of their nature and the events giving rise to them, are not directly related to the delivery of the Group's restaurant service to its patrons and merit separate presentation to allow shareholders to understand better the elements of financial performance in the year, so as to facilitate comparison with prior periods and to assess better trends in financial performance.

 

(y)  Earnings per share

Basic earnings per share values are calculated by dividing net profit/(loss) for the year attributable to ordinary equity holders of the parent by the weighted average number of ordinary shares outstanding during the year.

 

2      Critical accounting estimates and judgements

The preparation of the Group's financial statements requires management to make certain estimates, judgements and assumptions that affect the reported amount of assets and liabilities, and the disclosure of contingent liabilities at the statement of financial position date and amounts reported for revenues and expenses during the year.

However, uncertainty about these assumptions and estimates could result in outcomes that could require a material adjustment to the carrying amount of the assets or liability affected in the future.  Estimates and judgements are continually evaluated based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. In the future, actual experience may differ from these estimates and assumptions. 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 period are discussed below.

 

(a) Share based payments (Note 26)

The Group operates equity share-based remuneration schemes for employees. Employee services received and the corresponding increase in equity are measured by reference to the fair value of the equity instruments at the date of grant, excluding the impact of any non-market vesting conditions. The fair value of share options is estimated by using valuation models, such as binomial or the Monte Carlo model on the date of grant based on certain assumptions. Those judgements, estimates and assumptions are described in Note 26 and include, among others, the dividend growth rate, expected volatility, expected life of the options (for options with market conditions) and number of options expected to vest.

 

(b)  Accruals (Note 18)

In order to provide for all valid liabilities which exist at the balance sheet date, the Group is required to accrue for certain costs or expenses which have not been invoiced and therefore the amount of which cannot be known with certainty. Such accruals are based on management's best estimate and past experience.     Delayed billing in some significant expense categories such as utility costs can lead to sizeable levels of accruals. The total value of accruals as at the balance sheet date is set out in note 18.

 

(c)   Impairment reviews (Note 13)

In performing an impairment review in accordance with IAS 36 it has been necessary to make estimates and judgements regarding the future performance and cash flows generated by individual trading units which cannot be known with certainty. The Group views each restaurant as a separate cash generating unit ("CGU"). Where the circumstances surrounding a particular trading unit have changed then forecasting future performance becomes extremely judgemental and for these reasons the actual impairment required in the future may differ from the charge made in the financial statements. When assessing a CGU recoverable amount, the value in use calculation uses a discounted cash flow model which is sensitive to the discount rate and the growth rate used after taking into account potential sale value. The fair values were calculated based on cash flows discounted using a current lending rate. They are classified as level 3 fair values in the fair value hierarchy due to the inclusion of unobservable inputs.  The cashflow projections are influenced by factors which are inherently uncertain to forecast such as footfall and inflation and non-controllable costs such as rates and license costs.

 

All assets (ROU, fixed assets and goodwill) are reviewed for impairment in accordance with IAS 36 Impairment of Assets, when there are indications that the carrying value may not be recoverable. Impairment charges are recognised in the statement of comprehensive income.

 

All assets are subject to impairment tests whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. Where the recoverable amount is higher than the carrying amount of the CGU, no further assessment is required.  Where the carrying value of an asset or a CGU exceeds its recoverable amount (i.e. the higher of value in use and fair value less costs to dispose of the asset), the asset is written down accordingly.  In the absence of any information about the fair value of a CGU, the recoverable amount is deemed to be its value in use. Value in use is calculated using cash flows over the remaining life of the lease for the CGU discounted at 8% (2021: 6%), being the rate considered to reflect the risks associated with the CGUs. The discount rate is based on the Group's weighted average cost of capital ("WACC") and an allowance for risk which is used across all CGUs due to their similar characteristics. 

 

The cost-of-living crisis has resulted in increased uncertainty in the performance across CGUs over the short-term future and the cashflow over the next 12 months may not always be indicative of the future cashflows.  Historically a combination of past performance and future trading forecast is often used as a guide in estimating future cashflow, or comparison with similar sites.  In assessing the current impairment provision there has been a greater reliance on longer term future forecasts as short-term forecasts are impacted by the "cost of living crisis" and inflation. The cashflow of each CGU has been determined based on management's judgement of performance, impact of the utility costs and expected recovery in future years and therefore each CGU's cashflow has been selected based on an individual criterion. Management's judgement has been applied in selecting this criterion due to the uncertainty arising from amongst other conditions, cost of living increases and utility cost pressures and therefore a 0.75% growth rate (2021 - 0.5%) has been applied. Included within the cashflow is management's estimate of the capital expenditure required to maintain performance of the sites in the future years. The carrying amount of Fixed Assets and ROU assets and the sensitivity of the carrying amounts to the assumptions and estimates are outlined in Note 13.

(d)  Goodwill impairment reviews (Note 12)

The Group determines whether goodwill is impaired on an annual basis and this requires an estimation of the value in use of the cash-generating units to which the goodwill is allocated. This involves estimation of future cash flows and choosing a suitable discount rate. Full details are supplied in note 12, together with an analysis of the key assumptions.

 

(e)  Intercompany provision (Note 17)

In carrying out a review of intercompany loan in accordance with IFRS 9 it has been necessary to make estimates and judgements regarding the repayment of the loan by its subsidiary to the Company.   A sensitivity analysis has been performed on the repayment of loan value.

 

(f)   Crockery and utensils (Smallwares) inventory

The cost of replenishing smallwares is expensed directly through the income statement. Smallwares is recognised at historic cost and tested for impairment on an annual basis.

(g)  Lease liabilities (Note 1(d))

The calculation of lease liabilities requires the Group to determine an incremental borrowing rate ("IBR") to discount future minimum lease payments. The IBR is the rate of interest that the Group would have to pay to borrow over a similar term, and with a similar security, the funds necessary to obtain an asset of a similar value to the right-of-use asset in a similar economic environment. The IBR rate of 4.6% therefore reflects what the Group 'would have to pay', which requires estimation when no observable rates are available or when they need to be adjusted to reflect the terms and conditions of the lease. As at 25 December 2022, a sensitivity analysis has been conducted on the lease liabilities which shows that increasing the IBR rate by 1% will decrease the lease liability by £3.0m and decrease the right-of-use asset pre-impairment by £2.6m.

 

(h)  Provision

A dilapidation provision is made for a number of sites, where the need to carry out the work has been identified but a full survey and commission has not been undertaken and therefore management has applied their judgment in determining the provision.  In arriving at the dilapidation provision for these sites management have reviewed the leases and have used their judgement and experience gained from years of working in hospitality and property industry.

 

The apprenticeship grant income is deferred until apprentices receive training under the rule of the scheme and we are satisfied that we have fully complied with the scheme. We have applied an element of judgement until a full inspection is carried out.

 

(i)   Lease recognition

The Group's leases are held across Tasty plc or Took Us Long Time Ltd ("TUALT").  In determining where the assets and liabilities should be accounted for, we have reviewed which entity derives the benefit and rights to use the asset.  In assessing this we have reviewed where the trade occurs, where staff are employed and where day to day activity is managed from.  We have adjudged that the substance of the lease is that it is held by TUALT and accordingly recognised the lease liabilities within the TUALT company accounts.

 

3      Revenue, other income and segmental analysis

The Group's activities, comprehensive income, assets and liabilities are wholly attributable to one operating segment (operating restaurants) and arises solely in the one geographical segment (United Kingdom) that the Group is located and operates in. All the Group's revenue is recognised at a point in time being when control of the goods has transferred to the customer.

An analysis of the Group's total revenue is as follows:

			52 weeks ended 25 December 2022		52 weeks ended 26 December  2021
			£'000		£'000
Sale of goods and services: dine-in			39,004		26,319
Sale of goods and services: delivery and takeaway			5,023		8,590
			44,027		34,909

 

An analysis of the Group's other income is as follows:

			52 weeks ended 25 December 2022		52 weeks ended 26 December 2021
			£'000		£'000
Sub-let site rental income			362		295
Coronavirus Job Retention Scheme (CJRS) and Business Grants			-		3,913
Other			52		-
			414		4,208

 

In the period to 26 December 2021, the Group received Government grants in relation to the Coronavirus Job Retention Scheme ("CJRS") and Covid-19 Business Grants, provided by the Government in response to Covid-19's impact on the business. These were recognised in accordance with IAS 20 (Accounting for Government Grants and Disclosure of Government Assistance) when the group was entitled to, or there was reasonable assurance that the Group has met the conditions attaching to these grants.

No such grants were available in the 52 weeks ended 25 December 2022.

4      Operating loss

				52 weeks ended 25 December 2022		Restated 52 weeks ended 26 December 2021
	This has been arrived at after charging			£'000		£'000
	Staff costs			19,240		15,257
	Share based payments			58		120
	Pre-opening costs			51		-
	Amortisation of intangible assets			3		3
	Depreciation of right-of-use assets (IFRS16)			2,641		2,579
	Depreciation property, plant and equipment			1,664		1,297
	Dilapidations provision charge			42		-
	Dilapidations provision utilisation			-		(38)
	Restructure and consultancy			14		7
	Impairment/ (Impairment reversal) of property, plant and equipment			180		(2,346)
	Impairment of right-of-use assets			2,153		2,943
	Loss/(profit) on disposal of property, plant and equipment			154		(3)
	Auditor remuneration:
	Audit fee     - Parent Company			11		10
	- Group financial statements			46		45
	- Subsidiary undertaking			11		10
	Audit related assurance services			-		3
	Taxation advisory services			-		2
	Other advisory services			5		-

 

5      Highlighted items - charged to operating expenses

				52 weeks ended 25 December 2022		Restated 52 weeks ended 26 December 2021
				£'000		£'000
	(Loss)/profit on disposal of property, plant and equipment			(154)		3
	Restructure and consultancy			(14)		(7)
	(Impairment)/Release of impairment of property, plant and equipment			(180)		2,346
	Impairment of right-of-use assets			(2,153)		(2,943)
	Share based payments			(58)		(120)
	Pre-opening costs			(51)		-
	Gain on lease modifications			245		257
				(2,365)		(464)

The above items have been highlighted to give more detail on items that are included in the consolidated statement of comprehensive income and which when adjusted shows a profit or loss that reflects the ongoing trade of the business.

 

6      Finance income and expense

				52 weeks ended 25 December 2022		52 weeks ended 26 December 2021
				£'000		£'000
	Interest receivable			41		-
	Finance income			41		-
	Interest payable			30		59
	Finance expense (IFRS 16)			2,391		2,438
	Finance expense			2,421		2,497

 

7      Employees

				52 weeks ended 25 December 2022		52 weeks ended 26 December 2021
	Staff costs (including Directors) consist of:			£'000		£'000
	Wages and salaries			17,464		13,933
	Social security costs			1,489		1,101
	Other pension costs			287		223
	Equity settled share-based payment expense			58		120
				19,298		15,377

The average number of persons, including Directors, employed by the Group during the period was 1,020 of which 998 were restaurant staff and 22 were head-office (2021: 821 of which 805 were restaurant staff and 16 were head-office staff).  

No staff are employed by the Company (2021: no staff).

Of the total staff costs £17.8m was classified as cost of sales (2021: £14.3m) and £1.5m as operating expenses (2021: £1.1m). Redundancy costs of £0.014m (2021: £0.007m) have been included as a cost of Restructure and Consultancy in Note 4.

8      Directors and key management personnel remuneration

Key management personnel identified as the Directors are those persons having authority and responsibility for planning, directing and controlling the activities of the Group, and represent the Directors of the Group. The remuneration of the Directors for the period ended 25 December 2022 is as follows:

 

		Emoluments	Bonus	Share based payments	Pensions	Benefits	Social security costs	2022 Total
		£'000	£'000	£'000	£'000	£'000	£'000	£'000
	J Plant	150	-	48	-	-	19	217
	K Lassman	40	-	-	-	-	4	44
	M Vachhani	150	-	3	6	2	19	180
	Harald Samúelsson	80	-	-	2	-	9	91
	Wendy Dixon (appointed 22 June 2022)	18	-	-	-	-	1	19
	Total	438	-	51	8	2	52	551

 

 

		Emoluments	Bonus	Share based payments	Pensions	Benefits	Social security costs	2021 Total
		£'000	£'000	£'000	£'000	£'000	£'000	£'000
	J Plant	135	-	101	-	-	17	253
	S Kaye (resigned 14 May 2021)	12	-	-	-	-	1	13
	A Kaye (resigned 15 September 2020)	-	-	-	-	-	-	-
	K Lassman	36	-	-	-	-	4	40
	M Vachhani	135	-	4	5	2	17	163
	Harald Samúelsson (appointed 19 May 2021)	33	-	-	1	-	3	37
	Total	351	-	105	6	2	42	506

 

Company
The Company paid no director emoluments during the year (2021 - none).

9      Income tax expense

 

				52 weeks ended 25 December 2022		52 weeks ended 26 December 2021
				£'000		£'000
	UK Corporation tax
	Adjustment in respect to previous years			-		-
	Total current tax			-		-
	Deferred tax
	Origination and reversal of temporary differences			-		-
	Total deferred tax			-		-
	Total income tax credit			-		-

The tax charge for the period is lower than the standard rate of (2021 - lower than) corporation tax in the UK. The differences are explained below:

				52 weeks ended 25 December 2022		Restated 52 weeks ended 26 December 2021
				£'000		£'000
	(Loss)/profit before tax			(6,432)		1,151
	Tax on (loss)/profit at the ordinary rate of corporation
	tax in UK of 19% (2021 - 19%)			(1,222)		219
	Effects of
	Fixed assets differences			335		-
	Expenses not deductible for tax			102		22
	Remeasurement of deferred tax for changes in tax rates			-		(1,055)
	Movement in deferred tax not recognised			791		820
	Adjustment in respect of previous years			-		-
	Other movements			(6)		(6)
	Total tax charge			-		-

 

Factors affecting future tax charges

In March 2021 it was announced the UK corporation tax rate would increase to 25% in April 2023. This plan was substantively enacted in May 2021 and the disclosed but unrecognised deferred tax disclosed in Note 20 is calculated at the future tax rate of 25%.

 

10   Earnings per share

				25 December 2022		Restated 26 December 2021
				Pence		Pence
	Basic (loss)/ profit per ordinary share			(4.40p)		0.82
	Diluted (loss)/ profit per ordinary share			(4.03p)		0.72
				2022		2021
				Number '000		Number '000
	(Loss)/ profit per share has been calculated using the numbers shown below:
	Weighted average number of ordinary shares used as the denominator in calculating basic earnings per share			146,315		141,090
	Adjustments for calculation of diluted earnings per share:
	Ordinary B shares			10,451		14,815
	Options			2,975		3,265
	Weighted average number of ordinary shares and potential ordinary shares used as the denominator in calculating diluted earnings per share			159,741		159,170
				2022		2021
				£'000		£'000
	(Loss)/ profit for the financial period			(6,432)		1,151

 

The weighted average number of ordinary shares outstanding is increased by the weighted average number of additional ordinary shares that would have been outstanding assuming the conversion of all dilutive potential ordinary shares. 

11   Dividend

No final dividend has been proposed by the Directors (2021 - £nil).

12   Intangibles

				Trademarks	Total
				£'000	£'000
	At 27 December 2020			26	26
	Additions			5	5
	Amortisation of trademarks			(3)	(3)
	At 26 December 2021			28	28
	Additions			-	-
	Amortisation of trademarks			(3)	(3)
	At 25 December 2022			25	25

 

13   Property, plant and equipment and right-of-use assets

		Leasehold improvements	Furniture and fixtures computer equipment & vehicle	Total fixed assets	Right-of-use assets	Total
		£'000	£'000	£'000	£'000	£'000
	Cost
	At 27 December 2020	37,176	9,892	47,068	53,446	100,514
	Additions	145	399	544	951	1,495
	Lease modifications	-	-	-	(830)	(830)
	At 26 December 2021	37,321	10,291	47,612	53,567	101,179
	Additions	709	936	1,645	-	1,645
	Lease modifications	-	-	-	1,301	1301
	Disposals	(181)	(334)	(515)	(50)	(565)
	At 25 December 2022	37,849	10,893	48,742	54,818	103,560
	Depreciation
	At 27 December 2020 (as previously stated)	23,834	7,662	31,496	13,635	45,131
	Prior year adjustment (see below)	(729)	(132)	(861)	(1,595)	(2,456)
	At 27 December 2020 (as restated)	23,105	7,530	30,635	12,040	42,675
	Provided for the period	743	554	1,297	3,142	4,439
	Impairment / (reversal of impairment)	157	100	257	(257)	-
	Prior year adjustment (see below)	(1,948)	(655)	(2,603)	2,637	34
	At 26 December 2021 (as restated)	22,057	7,529	29,586	17,562	47,148
	Provided for the period	981	683	1,664	2,641	4,305
	Impairment	232	(52)	180	2,153	2,333
	Disposals	(75)	(307)	(382)	(51)	(433)
	At 25 December 2022	23,195	7,853	31,048	22,305	53,353
	Net book value
	At 25 December 2022	14,654	3,040	17,694	32,513	50,207
	At 26 December 2021 (as restated)	15,264	2,762	18,026	36,005	54,031

 

During the 52 weeks ended 25 December 2022, the Group recognised an impairment charge of £2.3m (2021: restated impairment charge of £0.6m) due to impairment of ROU assets £2.1m (2021: £2.9m) and impairment of fixed assets £0.2m (2021: release of £2.3m). The impairment movement is due to the reassessment by each individual CGU following a change in performance and/or change in assets.  The impairment calculation is sensitive to changes in the assumptions and estimates used in the underlying forecasts of future performance and cash flows.

 

A 1% decrease in the discount rate would reduce the net impairment charge by £1.2m, an increase of 1% would increase the impairment charge by £1.2m and a 1% increase in the growth rate would reduce the impairment charge by £1.1m.

 

The total carrying value of the CGUs that have been impaired in the period is £15.6m (2021: £15.4m). These have been impaired to their value in use of £8.9m (2021: £9.2m). The total carrying value of the CGUs that have been released in the period is £16.4m (2021: £11.3m).  

 

The key judgements and estimates in the inputs in calculating the impairments are outlined in note 2(c).

 

Company
The Company holds no property, plant and equipment.

Prior year adjustment

During the preparation of the interim accounts, management identified a calculation error within the impairment workings for the prior year, whereby the depreciation that would have been charged had there been no impairment was not being correctly considered as per IAS 36. At this stage £1.9m was adjusted against 2021 reserves. However, on further review of the complex adjustment it was identified that the adjustment needed to be recognised in both 2020 and 2021. This resulted in an impairment release of £2.46m in 2020 and an impairment charge of £0.6m in 2021. The cumulative impact of this was £1.9m in line with the adjustment identified in the interim.

In addition, a related prior year adjustment arising from the same issue has been recognised in 2021, whereby the depreciation charge on ROU assets should have been reduced for the impairment to allow depreciation to run to the end of the life of the lease.

Restated balance sheet at 27 December 2020	At 27 December 2020 (as restated)		Adjustment		At 27 December 2020 (as previously stated)
	£'000		£'000		£'000
Non-current assets
Intangible assets	26		-		26
Property, plant and equipment	16,433		861		15,572
Right-of-use assets	41,406		1,595		39,811
Other non-current assets	129		-		129
	57,994		2,456		55,538
Current assets
Inventories	1,822		-		1,822
Trade and other receivables	1,363		-		1,363
Cash and cash equivalents	8,028		-		8,028
	11,213		-		11,213
Total assets	69,207		2,456		66,751
Current liabilities
Trade and other payables	(10,617)		-		(10,617)
Lease liabilities	(2,904)		-		(2,904)
	(13,521)		-		(13,521)
Non-current liabilities
Provisions	(335)		-		(335)
Lease liabilities	(52,219)		-		(52,219)
Other Payables	(80)		-		(80)
	(52,634)		-		(52,634)
Total liabilities	(66,155)		-		(66,155)
Total net assets	3,052		2,456		596
Equity
Share capital	6,061		-		6,061
Share premium	24,251		-		24,251
Merger reserve	992		-		992
Retained deficit	(28,252)		2,456		(30,708)
Total equity	3,052		2,456		596

 

 

Impact on Income Statement for the 52 weeks ended 26 December 2021

		52 weeks Ended 26 December (as restated)		Adjustment		52 weeks Ended 26 December (as previously stated)
		2021		2021		2021
		£'000		£'000		£'000
Cost of sales - Depreciation release		(33,567)		563		(34,130)
Operating expenses - Impairment charge		(1,902)		(597)		(1,305)
Highlighted items (included within Operating expenses)		(464)		(597)		133
Profit and total comprehensive income for the period		1,151		(34)		1,185
Earnings per share for profit attributable to the ordinary equity holders of the company
Basic earnings per share		0.82p		(0.02p)		0.84p
Diluted earnings per share		0.72p		(0.02p)		0.74p
Impact on the Balance Sheet as at 26 December 2021
		At 26 December 2021 (as restated)		Adjustment		At 26 December 2021 (as previously stated)
		2021		2021		2021
		£'000		£'000		£'000
Non-current assets
Property, plant and equipment		18,026		3,464		14,562
Right-of-use assets		36,005		(1,042)		37,047
Equity
Retained deficit		(26,981)		2,422		(29,403)
Total equity		4,326		2,422		1,904

 

14   Leases

				25 December 2022		26 December 2021
				£'000			£'000
	Current
	Lease liabilities			1,953			2,024
				1,953			2,024
	Non-current
	Lease liabilities			48,358			50,157
				48,358			50,157
				50,311			52,181
	Due within one year			1,953			2,024
	Due two to five years			11,386			12,371
	Due over five years			36,972			37,786
				50,311			52,181

 

Lease liabilities are measured at the present value of the remaining lease payments, discounted using the Group's incremental borrowing rate of 4.5% and the Bank of England (BoE) base rate at the time of any lease modification or a new lease.  The average rate used for modification in 2022 was 5.9% (2021: 4.6%). The lease liabilities as at 25 December 2022 were £50.3m (2021: £52.1m).

 

The right-of-use assets all relate to property leases. The right-of-use assets as at 25 December 2022 were £32.5m (2021: £36.0m). During the period ended 25 December 2022 the Group made a provision for impairment of the right-of-use assets against a number of sites totalling £2.2m (2021: restated impairment of £2.9m).

15   Investments

						£'000
	Company
	At 27 December 2020					3,214
	Share based payment in respect of subsidiary					120
	At 26 December 2021					3,334
	Share based payment in respect of subsidiary					58
	At 25 December 2022					3,392

The Company's investments are wholly related to a 100% ordinary shareholding in Took Us a Long Time Limited (2021: 100% holding), a company registered in England and Wales with registered offices at 32 Charlotte Street, London W1T 2NQ. Took Us a Long Time Limited is primarily engaged with the operation of restaurants.

16   Inventories

				25 December 2022		26 December 2021
				£'000			£'000
	Raw materials and consumables			922			855
	Smallware inventories			1,269			1,248
				2,191			2,103

In the Directors' opinion there is no material difference between the replacement cost of inventories and the amounts stated above. Raw material and consumable inventory purchased and recognised as an expense in the period was £12.0m (2021: £8.6m).

17   Trade and other receivables

 

				25 December 2022		26 December 2021
				£'000		£'000
	Trade receivables			121		211
	Prepayments and other receivables			1,577		1,249
	Total trade and other receivables			1,698		1,460
	Less non-current portion (Deposits)			(65)		(105)
				1,633		1,355
	Company
	Amounts due from subsidiary			3,162		3,836
	Total trade and other receivables			3,162		3,836
	Classified as non-current			3,162		3,836

There has been an increase in the credit risk of this loan since it was advanced due to the deterioration in the market and the resulting impact on the performance of the trading company. The Company has previously made loans to the trading subsidiary of £28.2m (2021: £28.2m).

The Directors of the Company consider this loan to be classed as Stage 2 under the General Approach set out in IFRS 9. The Company has made provisions of £25.0m (2021: £24.4m) which represents the lifetime expected credit losses. In assessing the lifetime expected credit losses consideration has been given to a number of factors including internal forecasts of EBITDA, cashflow and the consolidated net asset value of the Group at the balance sheet date.

18   Trade and other payables

				25 December 2022		26 December 2021
				£'000			£'000
	Trade payables			5,142			3,952
	Taxations and social security			1,638			1,506
	Accruals and deferred income			3,499			3,314
	Other payables			2,242			1,801
	Total trade and other payables			12,521			10,573
	Less non-current portion (Deposits)			(128)			(80)
				12,393			10,493

Included within trade payables are £nil (2021: £0.01m) due to related parties (note 28).

19   Provisions

				25 December 2022		26 December 2021
				£'000		£'000
	At 26 December 2021			297		335
	Dilapidations provision utilisation in the period			-		(38)
	Dilapidations provision charge in the period			42		-
	At 25 December 2022			339		297

 

The Group has historically recognised a provision of £0.3m for dilapidations for a number of sites, where the need to carry out restoration work has been identified but a full survey and commission has not been undertaken and therefore management has applied their judgment in determining the provision.

20   Deferred tax

				25 December 2022		26 December 2021
				£'000			£'000
	At the beginning of the period			-			-
	Profit and loss credit/(charge)			-			-
				-			-
	Accelerated capital allowances			-			-
	Tax losses carried forward			-			-
	At the end of the period			-			-

 

Due to the uncertainty of future profits, a deferred tax asset of £5.3m (2021: £4.6m) is not recognised in these financial statements.

21   Borrowings

				25 December 2022		26 December 2021
				£'000			£'000
	Current
	Secured bank borrowings			-			313
				-			313
	Non-current
	Secured bank borrowings			-			937
				-			937
	Total			-			1,250
	Maturity of secured bank borrowings
	Due within one year			-			369
	Due In more than one year but less than two years			-			455
	Due In more than two years but less than five years			-			542
				-			1,366
	Future interest payments			-			(116)
	Total			-			1,250

 

The bank loan was repaid in June 2022.  While held it attracted interest at a margin of 4.5% over the Bank of England base rate. The borrowing was secured by legal charges over assets of the group.

22   Share capital

 

			Number	Number	Number	£'000
			Ordinary A	Ordinary B	Deferred
Called up and fully paid:
Ordinary shares at 0.1 pence			59,795,496	-	-	60
Deferred shares at 9.9 pence (as a result of sub-division			-	-	59,795,496	5,920
Ordinary shares issued at 0.1 pence			81,294,262	-	-	81
Ordinary B shares at 0.00001 pence			-	15,676,640	-	0
At 26 December 2021			141,089,758	15,676,640	59,795,496	6,061
Ordinary B shares at 0.00001 pence converted to ordinary A shares			5,225,546	(5,225,546)	-	0
At 25 December 2022			146,315,304	10,451,094	59,795,496	6,061

 

Share Capital Reorganisation

In January 2021 Daniel Jonathan Plant was awarded 15,676,640 'B' shares in Tasty plc, which can be converted to 'A' shares subject to achievement of hurdle rates. Following achievement of the first hurdle on 27 June 2022, 5,225,546 'B' shares converted to ordinary shares.

23   Reserves

Share capital comprises of the nominal value of the issued shares.

Share premium reserve is the amount subscribed in excess of the nominal value of shares net of issue costs.

Cumulative gains and losses recognised in the income statement are shown in the Retained deficit reserves, together with other items taken direct to equity.

The merger reserve arose in 2006 on the creation of the Group.

24   Leases

Operating leases where the Group is the lessor

The total future values of minimum operating lease receipts are shown below. The receipts are from sub-tenants on contractual sub-leases.

				25 December 2022		26 December 2021
				£'000		£'000
	Within one year: receipts			290		290
	Within two to five years: receipts			1,158		1,158
	Over five years: receipts			1,555		1,845
				3,003		3,293

 

25   Pensions

The Group made contributions of £8,000 (2021: £6,000) to the personal pension plan of the Directors. During the year the Group made contributions to employee pensions of £0.3m (2021: £0.2m). As at 25 December 2022, contributions of £120,000 due in respect of the current reporting period had not been paid over to the schemes (2021: £99,000).

26   Share based payments

				Weighted average exercise price		Number
				(pence)		'000
	At 27 December 2020			4.1		3,780
	Lapsed			4.4		(515)
	Cancelled			-		-
	Issued			0.0		15,677
	At 26 December 2021			0.7		18,942
	Exercised			0.0		(5,225)
	Lapsed			4.4		(290)
	Cancelled			-		-
	Issued			-		-
	At 25 December 2022			0.9		13,427

 

The exercise price of options outstanding at the end of the period ranged between 0p and 4p (2021: 0p and 4p) and their weighted average remaining contractual life was 3.1 years (2021: 3.9 years).

Of the total number of options outstanding at the end of period 2.97 million have vested and are exercisable at the end of the period (2021: none)

The market price of the Company's ordinary shares as at 25 December 2022 was 3.8p and the range during the financial year was from 3.3p to 6.3p (as at 26 December 2021 was 4.9p and the range during the financial year was from 2.9p to 7.9p).

No option was exercised or granted in 2022 (2021: £nil). Shares of 5.2m 'B' shares converted to 'A' ordinary shares (2021 £nil) and no further 'B' shares granted (2021: 15.7m).

On 29 July 2019 options of 3.5m were granted at a grant price of 4.4p reflecting the opening share price.   The options vest over three years and expire in 10 years and no other conditions are attached.   A charge of £60,000 was recognised over the three years based on a volatility of 63.5% and risk rate of 0.5% using the Binomial method.  The volatility is weighted on a four year basis and the risk free rate is based on risk free rate on the mid point between the vesting date and expiry.

On 17 October 2019 options of 1m were granted at a grant price of 3.3p reflecting the opening share price. The options vest over three years and expire in 10 years and no other conditions are attached.  A charge of £12,000 was recognised over the three years based on a volatility of 61.6% and risk rate of 0.5% using the Binomial method.  The volatility is weighted on a four year basis and the risk free rate is based on risk free rate on the mid point between the vesting date and expiry.

In January 2021 Daniel Jonathan Plant was awarded 15.7m 'B' shares in Tasty plc which can be converted to 'A' shares subject to achievement of certain hurdle rates. These 'B' shares were issued at nominal value of 0.00001 pence. Following achievement of the first hurdle on 27 June 2022, 5,225,546 'B' shares converted to 'A' ordinary shares.

 A charge of £181,000 will be recognised over the four years based on a volatility of 85% and risk rate of -0.05% using the Monte Carlo method.  The volatility is weighted on a four year basis and the risk free rate is based on yield on a 4-year zero coupon government security at the grant date.

The 13.4m share outstanding as at 25 December 2022 comprise of the options issued in July 2019, October 2019 and January 2021. There are no other outstanding options.

 

27   Financial instruments

In common with all other businesses, the Group is exposed to risks that arise from its use of financial instruments. This note describes the Group's objectives, policies and processes for managing those risks and the methods used to measure them. Further quantitative information in respect of these risks is presented throughout these financial statements.

The Group is exposed through its operations to the following financial risks:

·    Credit risk

·    Interest rate risk

·    Liquidity risk

 
The Group does not have any material exposure to currency risk or other market price risk.

There have been no substantive changes in the Group's exposure to financial instrument risks, its objectives, policies and processes for managing those risks or the methods used to measure them from previous periods unless otherwise stated in this note.

Principal financial instruments

The principal financial instruments used by the Group, from which financial instrument risk arises, are as follows:

·    loans and borrowings

·    trade receivables

·    cash and cash equivalents

·    trade and other payables

 

The Group's financial instruments apart from cash and cash equivalents are measured on an amortised cost basis. Due to the short-term nature of trade receivables and trade/ other payables, the carrying value approximates their fair value.

	Financial assets			25 December 2022		26 December 2021
				£'000		£'000
	Cash and cash equivalents			7,002		11,005
	Trade and other receivables			186		316
	Total financial assets			7,188		11,321
	Financial liabilities (amortised cost)
	Trade and other payables			7,384		5,753
	Loans and borrowings			-		1,250
	Finance leases			50,311		52,181
	Total financial liabilities			57,695		59,184

 

 

	Company - Financial assets (amortised cost)			25 December 2022		26 December 2021
				£'000			£'000
	Intercompany loan			3,162			3,836

 

General objectives, policies and processes

The Board has overall responsibility for the determination of the Group's risk management objectives and policies.  

The overall objective of the Board is to set policies that seek to reduce risk as far as possible without unduly affecting the Group's competitiveness and flexibility. Further details regarding these policies are set out below:

Credit risk

The Group's assets and liabilities are wholly attributable to one operating segment (operating restaurants) and arises solely in one geographical segment (United Kingdom).

Credit risk is the risk of the financial loss to the Group if a customer or a counterparty to a financial instrument fails to meet its contractual obligations. The Group is mainly exposed to credit risk from rebates from suppliers, sub-letting income and trade receivables.

 

Trade and other receivables are disclosed in note 17 and represent the maximum credit exposure for the Group.

The following table sets out the ageing of trade receivables:

			25 December 2022		26 December 2021
Ageing of receivables			£'000		£'000
<30 days			75		60
31-60 days			11		15
61-120 days			17		33
>120 days			127		194
Provision for doubtful debt			(109)		(91)
			121		211

 

The Group's principal financial assets are cash and trade receivables. There is minimal credit risk associated with the Group's cash balances. Cash balances are all held with recognised financial institutions. Trade receivables arise in respect of rebates from a major supplier and therefore they are largely offset by trade payables. As such the net amounts receivable form an insignificant part of the Group's business model and therefore the credit risk associated with them is also insignificant to the Group as a whole.  Accordingly, the Company does not consider there to be any risk arising from concentration of receivables due from any counterparty.

The Company's principal financial assets are intercompany receivables. These balances arise due to the funds flow from the listed Company to the trading subsidiary and are repayable on demand. The credit risk arising from these assets are linked to the underlying trading performance of the trading subsidiary. See note 17 for further details on intercompany debt.

 

Liquidity risk

Liquidity risk arises from the Group's management of working capital. It is the risk that the Group will encounter difficulty in meeting its financial obligations as they fall due.  The Group's policy is to ensure that it will always have sufficient cash to allow it to meet its liabilities when they become due. To achieve this aim, the Group seeks to maintain cash balances to meet its expected cash requirements as determined by regular cash flow forecasts prepared by management.

The following table sets out the contractual maturities (representing undiscounted contractual cash-flows) of financial liabilities:

		Up to 3 months	Between 3 and 12 months	Between 1 and 2 years	Between 2 and 5 years	Over 5 years
		£'000	£'000	£'000	£'000	£'000
	Trade & other payables	7,256	24	-	-	104
	Finance leases	645	1,214	3,134	9,617	35,701
	As at 25 December 2022	7,901	1,238	3,134	9,617	35,805

 

		Up to 3 months	Between 3 and 12 months	Between 1 and 2 years	Between 2 and 5 years	Over 5 years
		£'000	£'000	£'000	£'000	£'000
	Trade & other payables	5,673	24	-	-	56
	Loan and other borrowings	134	235	455	542	-
	Finance leases	760	1,263	2,976	9,395	37,787
	As at 26 December 2021	6,567	1,522	3,431	9,937	37,843

 

Non-current other payables are sub-let site rent deposits.

Interest rate risk

The Group seeks to minimise interest costs by regularly reviewing cash balances.

Interest rate risk arises from the Group's use of interest-bearing loans linked to LIBOR.  The Group is exposed to cash flow interest rate risk from long term borrowings at variable rate. The Board considers the exposure to the interest rate risk to be acceptable.  

Surplus funds are invested in interest bearing, instant access bank accounts.

Loans and borrowings

During the year the Group had a loan facility with Barclays Bank Plc.

Capital disclosures

The Group's capital is made up of ordinary share capital, deferred share capital, share premium, merger reserve and retained deficit totalling £2.0m (2021: Retained earnings £4.3m).

The Group's objective when maintaining capital is to safeguard the entity's ability to continue as a going concern, so that it can continue to provide returns for shareholders and benefits for other stakeholders. The Group is not subject to any externally imposed capital requirements. There have been no changes in the Group's objectives for maintaining capital nor what it manages in its capital structure.

The Group manages its capital structure and makes adjustments to it in the light of strategic plans. In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital to shareholders or issue new shares.

28   Related party transactions

The Directors are considered to be the key management personnel. Details of directors' remuneration are shown in Note 8.

The Group pays fees, rent and associated insurance to a number of companies considered related parties by virtue of the interests held by the Directors in such companies. The Group also reimburses expenses incurred by such companies on behalf of the Group.  Following changes to the Board in 2021, the entities below are no longer considered to be related parties.

				52 weeks ended 25 December 2022		52 weeks ended 26 December 2021
				£'000		£'000
	Rent, insurance and legal services charged to the group:
	-      Kropifko Properties Ltd			-		(32)
	-      KLP Partnership			-		(28)
	-      ECH Properties Ltd			-		(25)
	-      Proper Proper T Ltd			-		(33)
	Balance due to related parties:			-		11

The rent paid to related parties is considered to be a reasonable reflection of the market rate for the properties.

29   Reconciliation of (loss)/profit before tax to net cash inflow from operating activities

				52 weeks ended 25 December 2022		Restated 52 weeks ended 26 December 2021
				£'000		£'000
	Group
	(Loss)/ profit before tax			(6,432)		1,151
	Finance income			(41)		-
	Finance expense			30		59
	Finance expense (IFRS 16)			2,391		2,438
	Share based payment charge			58		120
	Depreciation of right-of-use assets (IFRS 16)			2,641		2,579
	Depreciation of property plant and equipment			1,664		1,297
	Impairment of property, plant and equipment			180		(2,346)
	Impairment of Right-of-use assets			2,153		2,943
	Profit from sale of property plant and equipment			154		(3)
	Amortisation of intangible assets			3		3
	Dilapidations provision charge			42		-
	Dilapidations provision utilisation			-		(38)
	Other non cash			(21)		-
	Decrease / (increase) in inventories			(88)		(282)
	Decrease / (increase) in trade and other receivables			(238)		32
	(Decrease)/ Increase in trade and other payables			1,948		(127)
				4,444		7,826

 

				52 weeks ended 25 December 2022		52 weeks ended 26 December 2021
				£'000		£'000
	Company
	Loss before tax			(674)		(145)
	Decrease in trade and other receivables			674		142
				-		(3)

 

30   Reconciliation of financing activity

 

		Lease liabilities	Lease liabilities	Bank Loan	Bank Loan	Total
		Due within 1 year	Due after 1 year	Due within 1 year	Due after 1 year
		£'000	£'000	£'000	£'000	£'000
	Net debt as at 28 December 2020	2,904	52,219	-	-	55,123
	Cashflow	(3,064)	-	313	937	(1,814)
	Addition / (decrease) to lease liability	2,184	(2,062)	-	-	122
	Net debt as at 26 December 2021	2,024	50,157	313	937	53,431
	Cashflow	(3,172)	-	(313)	(937)	(4,422)
	Addition / (decrease) to lease liability	3,101	(1,799)	-	-	1,302
	Net debt as at 25 December 2022	1,953	48,358	-	-	50,311

 

31   Post Balance Sheet Events

There are none to report.