23 November 2023
Nightcap plc
("Nightcap" or the "Company" or the "Group")
Results for the 52 weeks to 2 July 2023
Nightcap (AIM: NGHT), the owner of The Cocktail Club, the Adventure Bar Group, Barrio Familia and the Dirty Martini group of bars, is pleased to announce its audited full year results for the 52 weeks to 2 July 2023. The Company's Annual Report and Accounts for the 52 weeks to 2 July 2023 ("Annual Report") and the Notice of Annual General Meeting ("AGM") will be posted to shareholders today.
The Company's Annual Report and the Notice of AGM will be available shortly on the Company's website at: www.nightcapplc.com
The AGM will be held at 10:00 am on ?Monday 18 December? 2023 at the offices of Allenby Capital Limited, 5 St. Helen's Place, London, EC3A 6AB.
Sarah Willingham, Chief Executive Officer of Nightcap, commented:
"At Nightcap we believe that everyone deserves a great night out and with this belief at our core, we are fast becoming one of the UK's leading bar groups. During the year, we grew our revenue by 29% from £35.9 million to £46.4 million whilst increasing the number of bars we operate from 31 to 46.
Unaudited Group revenue was £14.7 million for the 13-weeks ended 1 October 2023 ("Q1 FY2024") resulting in a 42.7% increase compared to Group revenue of £10.3 million for the equivalent period in FY2023. Whilst trading in October 2023 has continued on the same trend as Q1 FY2024, we are focussing on the important Christmas period. Christmas bookings and enquiries across the whole estate including Dirty Martini are in line with the strong 2022 Christmas period."
For further enquiries:
| Nightcap plc Sarah Willingham / Toby Rolph / Gareth Edwards |
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Allenby Capital Limited (Nominated Adviser and Broker) Nick Naylor / Alex Brearley / Piers Shimwell (Corporate Finance) Jos Pinnington / Amrit Nahal (Sales and Corporate Broking)
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+44 (0) 20 3328 5656
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| Bright Star Digital (PR) Pam Lyddon | https://www.brightstardigital.co.uk/ +44 (0) 7534 500 829 pamlyddon@brightstardigital.co.uk
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CHAIRMAN'S STATEMENT
Since our last annual report, Nightcap has continued to grow both organically and by acquisition. Sarah and her excellent team have integrated the different businesses, optimising their unique characters and streamlining the efficiency of the business operations behind the innovative cocktails and the magnetic social experiences. In keeping with our strategy, I am extremely pleased we have acquired the Dirty Martini chain of bars over the summer of 2023.
Everyone in the hospitality sector breathed a sigh of relief as the strictures imposed by COVID were relaxed. Unfortunately, the respite was short lived as it was quickly followed by a seemingly endless run of transport strikes, rapid inflation and a "cost of living crisis". The longer-term effects of COVID have changed the way people manage their working week and impacted our traditional trading patterns. The COVID years have made us more flexible and creative. Sarah and the wider executive team at Nightcap have shown exceptional leadership to navigate through the continuing uncertainties. I am pleased that, despite the challenges and uncertainties that have been thrown at us, we have continued to focus on the growth opportunities of the business.
Our medium-term focus continues to be on growth, however having made several significant acquisitions in the last couple of years, a lot of attention, time and energy has been put into their integration into the Nightcap family and making sure the economies of scale, that can be achieved from a larger commercial base, are realised. Those advantages will be seen in the short term, but the longer-term benefits of creating a platform that make future expansion easier, faster and more efficient are even more exciting.
Our senior management have identified a number of new sites that will enhance our geographical reach as well as scanning the horizon for potential acquisitions that will add value and strength to the existing Nightcap portfolio. In light of the difficult trading environment and the UK's uncertain economic outlook, the Board is continuing to approach both organic growth and potential acquisition opportunities with caution. The Board continues to be mindful of the importance of immediate cash and profit generating capabilities of such acquisitions, as well as any new brands being in harmony with the existing Nightcap portfolio.
It is a continuing theme, with good reason, that we continue to invest in, and prioritise, our staff (both in recruitment and training). Our people are the core of our business. They create the welcome and experience that our customers enjoy and that keeps them coming back. Last year we launched the Nightcap Bar Academy to provide in-depth training and improve skills. This has proved to be such a success that further resource is being directed towards it.
I have no doubt that Sarah and the senior management team have all the skills and personal attributes to overcome the challenges ahead. Sarah, our CEO continues to build a strong, cohesive and focused team to power the business on to new and exciting prospects. I am very pleased with the Group's performance and expect the long-term growth to continue in establishing Nightcap as one of the leading bar businesses in the UK.
Gareth Edwards
Chairman
CHIEF EXECUTIVE'S STATEMENT
INTRODUCTION
I am pleased to present another year of significant growth for Nightcap plc, despite the painful ongoing impact of train strikes. These audited results for the 52 weeks to 2 July 2023 represent Nightcap's second full year of trading.
When we founded Nightcap less than three years ago we didn't expect to be so far ahead of our plan in such a short space of time. At Nightcap we believe that everyone deserves a great night out and with this belief at our core, we are fast becoming one of the UK's leading bar groups. The activities undertaken during the year saw us taking several steps to get closer to achieving our goals.
To be closing the financial year with the impressive acquisition of Dirty Martini, bringing our total number of bars to 46 is an incredible achievement. I'm immensely grateful to our teams who continue to work tirelessly and brilliantly amidst the backdrop of a tough trading environment caused mainly by challenging economic conditions and the ruthless continuation of train strikes, targeted to cause maximum damage to businesses across the country. I am impressed by how our teams have embraced the many internal changes from our rapid growth.
During the year, we grew our revenue by 29% from £35.9 million to £46.4 million whilst increasing the number of bars we operate from 31 to 46. The strong growth during the year is once again driven by our continued focus on both new site openings for our core brands alongside the addition of complementary acquisitions. The majority of growth in the number of sites came towards the end of the financial year, leaving significant additional annualised revenue from those bars to be achieved in the current year.
In June 2023, we welcomed Dirty Martini to the Group, which included ten Dirty Martini branded bars and the Tuttons French bistro restaurant located in Covent Garden. These final results therefore include Dirty Martini's results for three weeks. Dirty Martini was acquired out of administration and I am very pleased with how quickly the business has been integrated, considering the complexity of the acquisition. We are delighted with how Dirty Martini has settled into the Nightcap family alongside our The Cocktail Club, Tonight Josephine, Blame Gloria and Barrio brands. We are excited to continue our focus on rolling out these brands alongside our continued search for additional acquisitions that will complement our journey to become the UK's leading bar group.
Throughout the year we have relied on the support and loyalty of our rapidly expanding group of customers and without them our significant growth simply would not have been possible. For the first time in years they managed to enjoy unrestricted social nights out with friends and loved ones in the safe and fun environments that we continue to offer, only disrupted by the ongoing rail strikes. Once again I would like to take this opportunity to thank our guests for welcoming our brands into their towns and cities across the UK, as we continue our expansion. What makes our industry so great and why so many of us are drawn to it, is the fun and the joy brought by our staff and our customers to create memorable magic moments across our 46 bars. When our bars are busy, filled with people enjoying themselves, there is simply no better place to be.
LIKE-FOR-LIKE GROWTH
Whilst like-for-like* growth is becoming an increasingly difficult measure to rely on, due to the significant changes in the macro environment caused by the aftermath of COVID-19, rail strikes, inflation, energy prices and higher interest rates leading to a cost of living crisis, we have tried to give some measure of the Company's financial performance during the period.
On the back of record breaking like-for-like growth in 2022 of 23.6% we saw like-for-like revenue growth normalise in 2023 through a 12.5% decline. As a result overall like-for-like revenue remains ahead of 2019. The main driver of the reduction in like-for-like revenue growth for the year was by far the impact of the ongoing rail strikes. There were a total of 28 strike days in the financial year, mostly targeting holiday periods and pay day weekends to ensure they cause as much damage to the hospitality sector as possible. In total we estimate that £2.9 million** in revenue and £1.9 million** in company EBITDA (IAS 17) was lost during the strike days and so had the biggest impact on the like-for-like revenue growth during the year. We do not believe that Nightcap will be in a position to reach its fullest trading potential until the industrial action has been settled.
ENTERTAINMENT AND DIGITAL
During the previous financial year our major focus was developing our successful pre-sold daytime events such as "bottomless brunches" and transferring them across the rest of our bars, where relevant. This was done very successfully in order to maximise utilisation of our properties during times when our bars are otherwise not trading. This year we have focussed on ensuring that all events align with the individual brands and their audiences, to optimise how we continue to market events to each brand's loyal customer base.
As part of our strategic direction it is clear to us that entertainment, experiences and events are becoming a significantly more important factor when our Millennial and Gen Z customers decide how to curate their nights out. During the year 48% of our revenue came from pre-sold or pre-booked events and parties. As a result, understanding the digital journey customers go through to reach their decisions is becoming the heartbeat of how we fill our venues every night. Whether it relates to becoming an important part of that special birthday party, or the once in a lifetime hen do, the decisions are made digitally and they are made in advance.
At Nightcap we have decided to make digital a fundamental part of our investment programme, in terms of both people, resources and technology, to drive a deeper automated understanding of all of the touch points on our customers' journeys. We expect that when we reach our next level of capability and match digital to our already developing cluster operating model, we will gradually see an improved ability to offer relevant, targeted and diversified nights out for our customers across all of our brands wherever they live, study or work. As we make investments in technology and digital capabilities a core part of our approach over the coming three years, we expect to launch market leading customer centric technology to continue to bring new improved timely offers to a generation of customers who are expecting a seamless connection and interaction between their on- and offline experience.
ROLL-OUT
In the first half of the financial year we continued the roll out of our brands, opening a further six bars before the important Christmas period in 2022. As a result of the impact of rail strikes as well as the uncertainty for our customers caused by the cost of living crisis, we decided to slow down our roll-out programme. We are focussing on allowing Dirty Martini to settle into the Group, maximising returns from our existing business and newly opened sites and driving synergies and efficiencies across the enlarged Group. We plan to continue our roll out programme and have an exciting pipeline of sites to progress when market conditions improve.
CLUSTER MODEL
With the addition of Dirty Martini we consolidated our existing site clusters in Bristol (five bars), Cardiff (three bars), Birmingham (four bars) and parts of London such as Shoreditch (four bars), the City (five bars) and Covent Garden (four bars) all operating well within a short distance of each other enhancing the late night offering in the local city centre areas. We also acquired Dirty Martini sites in new northern locations Leeds and Manchester, adding to our first Tonight Josephine site in Liverpool, all cities with significant potential for us to build new clusters.
Bristol and Birmingham are both great examples of the potential for expansion using our diversified brand cluster strategy. In Birmingham we operate four bars and would expect to generate annualised revenue in excess of £8.5 million based on our budget for the 52 weeks ended 30 June 2024. In addition we have identified at least another three locations that would be suitable for Nightcap brands in Birmingham.
In Bristol, Nightcap currently operates five bars across The Cocktail Club, Tonight Josephine, Blame Gloria and Dirty Martini brands. We would expect to generate annualised revenue in excess of £6 million based on our budget for the 52 weeks ended 30 June 2024 and we have identified at least another two locations that would be suitable for Nightcap brands in Bristol.
As we break the Nightcap bars into clusters both inside and outside of London it becomes clear just how great the potential is for a multi-brand bar operator like Nightcap with dozens of cities being suitable for our multi-site operation. Nightcap has identified sites and cities using its cluster strategy and believes there is the opportunity to reach well above 150 sites across its existing brands during the next phase of growth.
We are excited to combine our multi brand cluster approach by taking significant steps to digitally connect our loyal and engaged consumers across our clusters, to provide them with fresh, innovative and differentiated ways of enjoying their best nights out with us wherever they live, study or work.
ACQUISITIONS UPDATE - DIRTY MARTINI
With the acquisition, on 9 June 2023, of Dirty Martini via a pre-pack acquisition out of administration, we continued to deliver on our ambition to create the leading bar group in the UK, consisting of the most loved brands and concepts, with the highest potential for roll-out across the country.
Dirty Martini is one of the leading cocktail bar brands in the UK. Known for its bespoke cocktail menu specialising in martinis, spirited atmosphere, brunch and its 'happy hours'. The Dirty Martini ethos is to create an environment which operates successfully at brunch, after work, through a popular happy hour, and into the night, very much in keeping with the ethos across the rest of the Nightcap brands.
With their mix of Martini cocktails and popular mini burgers and chicken slider birdcages, Dirty Martini has created a great relaxing atmosphere to enjoy corporate and private events. This is often followed by a DJ led party atmosphere, ending in selfies taken by groups of friends in front of the signature angel wings, epitomising the Dirty Martini night out.
The acquisition of Dirty Martini is in keeping with the Group's strategy of targeting millennial and Gen Z customers who are moving away from generic mid-market chains and sticky floored nightclubs, and are instead favouring late night bars where they can have a great time, drink high quality drinks and enjoy an experience-led, memorable, safe and fun night out in unique venues.
REVENUE GROWTH
The 29% increase in revenue from £35.9 million to £46.4 million represents another year of impressive revenue growth. Importantly, Dirty Martini was not acquired until 9 June 2023, so the Board anticipates significant annualised growth during this current financial year as the acquisition beds in and becomes a core part of the Nightcap Group. In addition to the acquisition and the new sites opened during the year, what is really exciting is the foundation of the well-defined brands that we have created, spread across clusters and locations with great additional potential. These are operated by our talented and engaged colleagues, working in inclusive and safe environments that allow them to grow as professionals and make hospitality a proper career path. Taking this triangle of brands, clusters and strong operations and overlaying a focus on experiences and a stronger digital journey across the Group is key to unlocking even more potential in each location, whilst we continue to look at both organic and acquisitive ways to continue our rapid expansion.
ECONOMIC CLIMATE
Nightcap was created during the COVID pandemic, a distressing time for the hospitality industry and before the roll out of the first vaccine, with an unprecedented opportunity ahead of us.
Lockdowns were followed by a period of significant downturn in the property market as a result of record closures and no demand for new openings. Nightcap took advantage and we successfully opened a string of highly attractive bar locations across the UK.
This was followed by inflation caused by post-COVID-19 supply chain disruption and was compounded by the war in Ukraine, and its impact on energy prices and interest rates. The resulting cost of living crisis and reduced consumer spending has impacted most hospitality businesses across the UK.
With inflation falling and energy prices, site fit out costs, supply chain costs and wage inflation coming under control, a more predictable trading environment was becoming visible only to be significantly disrupted by the ongoing rail strikes that started in June 2022 and have affected us for nearly every month of trading since. With a total estimated impact of £2.9 million** of lost revenue and £1.9 million** of lost company EBITDA (IAS 17) the impact is significant for Nightcap and debilitating for the industry as a whole.
We are well shielded from the increase in prices in our supply chain, with 90% of our sales being drinks sales. We have an excellent ongoing relationship with a small number of suppliers with annual fixed cost contracts. As we add more and more volume we see these prices decreasing and supplier led incentives improving.
We have continued our work to mitigate against the cost of energy, with the introduction of a sustainability consultancy partner and the objective of saving 20% from usage, combined with having fixed the majority of our utilities at competitive rates. These actions along with our interest rate cap on the reference base rate (SONIA) fixed at 3% until August 2025, taken out as interest rates started to rise, ensure that we continue to effectively mitigate the impact of a number of these macro influences.
FINANCIAL POSITION
We started the year with net debt of £0.2 million (excluding IFRS 16 leases liabilities) which included cash of £5.4 million. A proportion of this cash was earmarked for capital expenditure on six new sites as we finalised our initial roll out programme.
Dirty Martini was acquired on 9 June 2023 out of administration as a pre-pack deal for a payment of £4.15 million with an additional £0.5 million due on successful assignment to Nightcap of certain sites, the completion of which was announced on 9 November 2023. The Group will make a further announcement in due course in relation to deferred consideration for the acquisition. The transaction was financed through the raising of £5 million of capital from existing and new investors. £2.65 million was raised as new convertible loan notes along with £2.35 million of new shares issued at 12 pence per share on the date of the transaction.
We continue our great relationship with HSBC where we are gradually paying down our £10 million facility. We ended the year with net debt of £4.0 million (excluding IFRS 16 leases and convertible loan notes) which includes £5.0 million of cash.
The current financial position, alongside the cash generation from operations, puts Nightcap in a good financial position as we continue to deliver on our promise to create the leading bar group in the UK over the coming years.
PEOPLE
With the recent acquisition of Dirty Martini, the Nightcap Group has expanded to include over 1,000 colleagues. A large majority of our workforce is comprised of individuals at the early stages of their careers, and we are committed to providing them with a clear path for growth within our business. Retention of talent in our industry is challenging, but we firmly believe that our people are at the core of our success and progress. Our rapid growth has made Nightcap an attractive workplace for top talent, and we have the privilege of working with exceptionally skilled individuals at all levels.
Investing in the training and development of our employees is a top priority. We have increased our efforts in this area, providing comprehensive training programs for trainers, leadership development opportunities for managers, and performance management strategies across the board. These initiatives are essential in order for us to achieve our goal of becoming the leading bar group in the UK. We are committed to offering the best parties, drinks, and music, as well as maintaining the highest standards of venue management nationwide. None of this would be possible without our deep commitment to developing the skills and talents of our workforce.
I would like to extend my gratitude to all of our dedicated and enthusiastic colleagues for another year filled with great fun, parties, and laughter, both for ourselves and our customers. Their hard work and spirit have truly made Nightcap a remarkable place.
Last year, we achieved a significant increase in the number of women working across our business, and our senior executive team now consists of 50% women. This year, the gender split across the entire business is approximately 47% women and 53% men. We are proud to have so many talented women shining in traditionally male-dominated roles within our industry. Furthermore, we are committed to embracing diversity in all its forms, including welcoming LGBTQ individuals and individuals from diverse religious and racial backgrounds. Nightcap will always be a home for anyone who wants to work with the best in the hospitality industry, offering a high-energy, rewarding, and fun environment.
To ensure the safety of both our staff and customers in our bars, we have launched the highly successful "Safer Together" campaign. This initiative, featured across national press, encourages people to stay together and look out for each other during nights out. As part of this campaign, all Nightcap bars now stock free spiking testing kits behind the bar, phone chargers for customers and our managers and staff have received training to identify and assist individuals who may find themselves alone or confused. We are dedicated to ensuring that everyone gets home safely after enjoying a great night out.
I am proud to announce the progress of our latest project, the harmonisation of contracts and terms of employment within the Nightcap group. This initiative not only safeguards the existing benefits enjoyed by our employees, but also establishes a fairer and more consistent organisational structure. In addition, we are excited to launch our new careers website, www.nightcapcareers.co.uk, which we believe will significantly enhance our retention, recruitment and hiring process.
Together, these accomplishments and initiatives should propel Nightcap forward as a leading force in the hospitality industry. We are honoured to have such a fantastic team supporting our mission, and we look forward to even greater success in the future.
SUSTAINABILITY
Nightcap is committed to continuing our work to reduce our carbon footprint and for the first time we will report against TCFD (Task Force on Climate-related Financial Disclosures) which sets out a more comprehensive range of initiatives than ever before, which we believe will eventually lead to best in class progress through our sustainability efforts. We continue to make good progress in the reduction of energy consumption, which, other than the purchase and sale of spirits, is the largest part of our carbon footprint. This includes working with our sustainability partner, who have installed energy consumption devices across the entire estate except for the recently acquired Dirty Martini venues. As consumption of alcohol is the largest component of our carbon footprint, we will continue to assess what steps can be taken to reduce or offset the impact of alcohol on our carbon footprint over the coming year.
CURRENT TRADING AND PROSPECTS
Due to the acquisition of Dirty Martini on 9 June 2023, only a few weeks prior to the beginning of the new financial year, we have been extremely busy, welcoming colleagues from the new sites, onboarding everyone into the Nightcap way of working. We have finalised the assignment of all the Dirty Martini leases except for one unprofitable Dirty Martini site at Hanover Square which, due to unreasonably high rent, had not operated profitably for a long time. This site was handed back on 13 October 2023. After positive discussion relating to the future of the Tuttons and Dirty Martini sites in Covent Garden, we have agreed a new lease of up to three years on more attractive commercial terms, which leaves Nightcap with a total of 46 bars.
Trading in the first 13 weeks of the new financial year (period to 1 October 2023) has been adversely impacted by September's record warm weather, the ongoing cost of living crisis and significant train strikes deliberately targeting payday weekends to cause maximum damage. Warm weather in September (which reduced the demand for socialising in basement bars) led to record weeks at our outdoor venues, Bar Elba and in particular Luna Springs, which had its strongest summer yet, as customers enjoyed our large outdoor spaces.
Unaudited Group revenue was £14.7 million for the 13-weeks ended 1 October 2023 ("Q1 FY2024") resulting in a 42.7% increase compared to Group revenue of £10.3 million for the equivalent period in FY2023. Revenue for this 13-week period represents a 16.7% like-for-like* decrease compared to the equivalent period for FY2023, mostly caused by additional rail strikes and extremely warm weather throughout September.
Whilst trading in October 2023 has continued on the same trend as Q1 FY2024, we are focussing on the important Christmas period. Christmas bookings and enquiries across the whole estate including Dirty Martini are in line with the strong 2022 Christmas period.
The Board remains cautious about the near term future trading due to the challenges presented by continuing train strikes. The Nightcap estate is of a higher quality, better operated and with better trained and more engaged teams than ever before. We therefore remain optimistic about the future potential of the Group and remain excited about building the UK's leading bar group.
The Group's balance sheet remains strong. As at 1 October 2023, the Group's cash at bank was £2.6 million with bank debt of £9.1 million prior to entering the important and lucrative Christmas period.
Sarah Willingham
Chief Executive Officer
* Like-for-like revenue is same site revenue defined as revenue at only those venues that traded in the same week in both the current year and comparative reporting periods.
** These estimates have been derived from the average weekly revenues in the weeks preceding and following the week impacted by the industrial action. EBITDA has been estimated based on gross margins adjusted for variable costs.
FINANCIAL REVIEW
The 52-week period ended 2 July 2023 represents a full year of trading for The Cocktail Club, the Adventure Bar Group, and Barrio Familia Group, and three weeks of trading for Dirty Martini, which was acquired on 9 June 2023.
As the Group accounts on a weekly basis, the full year results report on a 52-week period ended 2 July 2023, with the prior year comparative being the 53 weeks ended 3 July 2022.
Nightcap's performance for these periods is summarised in the table below.
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| 52 weeks ended 2 July 2023 £m | 53 weeks ended 3 July 2022 £m |
| Sites trading at year end | 47** | 31 |
| Revenue | 46.4 | 35.9 |
| Adjusted EBITDA (IFRS 16)* | 6.6 | 6.0 |
| Adjusted EBITDA (IAS 17)* | 2.6 | 3.3 |
| (Loss) / Profit from operations | (2.8) | 1.4 |
| (Loss) / Profit before tax | (4.9) | 0.2 |
| Cash and equivalents | 5.4 | 5.4 |
| Net Debt (including IFRS 16 lease liabilities) | (44.5) | (27.8) |
| Net (Debt) (excluding IFRS 16 lease liabilities) | (6.7) | (0.2) |
| Net Assets | 14.5 | 16.2 |
The Group uses a range of financial and non-financial measures to assess its performance. Several of these (for example Adjusted EBITDA and Adjusted earnings / (losses) per share) are considered to be Alternative Performance Measures ("APMs"), as they are not defined under IFRS. The Board believes that these APMs provide stakeholders with additional useful information on the underlying trends, performance and position of the Group and are consistent with how its business performance is measured internally and across the wider hospitality sector.
Adjusted EBITDA / EBITDAR (EBITDA before rental costs) is also the measure used by the Group's banks for the purposes of assessing covenant compliance.
* The table below shows the reconciliation between adjusted EBITDA and statutory figures within these accounts. Further definitions of the APMs can be found on page 93 of the Annual Report.
** As at year end, we have included Dirty Martini Hanover Square as a trading site. The lease for this site was handed back to the landlord on 13th October 2023. Further information is provided in the Chief Executive's Statement.
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Note | 52 weeks ended 02 July 2023 £'000 | 53 weeks ended 03 July 2022 £'000 |
| (Loss) / profit from operations | | (2,812) | 1,407 |
| Exceptional items | 10 | 792 | 84 |
| Acquisition related transaction costs | 11 | 734 | (866) |
| Pre-opening costs | 12 | 1,013 | 442 |
| Share based payment charge | 7 | 181 | 345 |
| Impairment | 6 | 565 | 143 |
| Adjusted profit from operations | | 473 | 1,555 |
| Depreciation and amortisation (pre IFRS 16 Right of use asset depreciation) | 6 | 3,094 | 2,256 |
| IFRS 16 Right of use asset depreciation | 6 | 3,278 | 2,224 |
| IFRS 16 Right of use asset / liability disposal | 6 | (220) | - |
| Adjusted EBITDA (IFRS 16) | | 6,625 | 6,036 |
| IAS 17 Rent charge | | (3,997) | (2,727) |
| Adjusted EBITDA (IAS 17) | | 2,627 | 3,309 |
RESULTS FOR THE YEAR
This year Nightcap has continued to grow at pace, with the addition of six new sites across the three brands and the acquisition of the Dirty Martini group of bars which contributed three weeks of trading in this financial year. This has taken the estate to 46 bars across the UK. The Group has achieved revenues of £46.4 million, an increase of 29% over the previous year, driven by new openings and the full year effect of the Barrio Familia group.
On 9 June 2023, Nightcap acquired the Dirty Martini group of bars (including Tuttons restaurant) for an initial consideration of £4.15 million which will increase to £4.65 million on the successful assignment of the property leases of four key sites, the completion of which was announced on 9 November 2023. Nightcap is currently the operator of nine Dirty Martini bars and the Tuttons brasserie restaurant in Covent Garden. There are four Dirty Martini bars located in London with an additional five bars located in Cardiff, Bristol, Birmingham, Leeds and Manchester.
The single biggest impact in the last financial year has been the continued industrial action from transport worker unions that has significantly impacted the whole of the hospitality industry. There were 28 days of industrial action last year, targeted mainly on Thursdays and Saturdays. This action has cost us an estimated £2.9 million1 of lost revenue and £1.9 million1 of lost EBITDA (IAS 17) and has cost the hospitality industry an estimated £3.25 billion2 overall. On a like?for?like3 basis, this industrial action impacted the Group negatively resulting in a 12.5% decline when compared to the previous year where we saw 23.6% growth in like-for-like3 revenue.
1 These estimates have been derived from the average weekly revenues in the weeks preceding and following the week impacted by the industrial action. EBITDA has been estimated based on gross margins adjusted for variable costs.
2 Source: UK Hospitality - "Rail strikes to cause half-term havoc"
3 Like-for-like revenue is same site revenue defined as revenue at only those venues that traded in the same week in both the current year and comparative reporting periods.
Revenue for the 52-week period ended 2 July 2023 incorporated a full year of trading for The Cocktail Club, Adventure Bar Group and Barrio Familia, and three weeks of trading from the Dirty Martini group of bars that were acquired on 9 June 2023. The Group's brands trade in similar geographical locations and are subject to the same risks as described in the principal risks and uncertainties section of the Annual Report. The brands are also part of the cluster model as described in the Chief Executive's report, where several brands operate in the same geographical area. Therefore, the Group's revenue is reported as one segment. Further information can be found in Note 4.
The Group delivered an Adjusted EBITDA of £6.6 million under IFRS 16 and an Adjusted EBITDA of £2.6 million under IAS 17. Taking into account the financial impact of the industrial action, management estimates that Adjusted EBITDA (IAS 17) would have been £4.5 million for the 52 weeks ended 2 July 2023. As highlighted above, the industrial action impacted the Group by an estimated £1.9 million at the EBITDA level.
Group depreciation increased from £3.9 million to £5.7 million, which reflects a full year's contribution in relation to the sites opened in 2021-22 together with the Barrio Familia Group bars, and a further six bars opened in 2022-23. Group amortisation increased to £0.6 million in the year due to the amortisation of intangibles associated with the Adventure Bar Group and Barrio Familia Group transactions.
Exceptional items over the period of £0.8 million are detailed in Note 10. The Group incurred acquisition related transaction costs in respect of Dirty Martini of £0.7 million. In the prior year, the Group incurred acquisition related transaction costs, being a net credit, of £0.9 million. Transaction costs relating to the Barrio Familia Group transaction of £0.4 million were offset by a £1.2 million credit that related to the deferred contingent liability relating to the Adventure Bar Group consideration - see Note 11.
The Group has a reported tax credit for the year of £0.9 million (2022: credit of £0.3 million). The Group has utilised capital allowances, tax losses and Group relief where available to mitigate corporation tax payable. The Group has benefited from the introduction of the 130% capital allowance super deduction due to the capital expenditure incurred on the new sites.
In June 2023, the Group made the decision to temporarily cease trading at the Barrio Watford site. The Group retains the lease for this site and is considering whether to either launch an alternative brand on the site, partner with another operator or dispose of the lease. As a consequence, the Group has recognised an impairment charge of £565,000 in relation to the property, plant and equipment.
With the Group continuing to execute its roll out strategy, during parts of the financial year there were preopening costs that relate to the fixed and training costs in delivering the new sites ready for opening. In the 52-week period ended 2 July 2023, the Group incurred £1.0 million of preopening costs relating to the six sites opened in the year.
The Group reported a loss from operations of £2.8 million for the 52-week period ended 2 July 2023, compared to a profit of £1.4 million in the previous year. The Group also reported a loss before tax of £4.9 million compared to a profit of £0.2 million for the 2022 financial year.
The table below sets out our basic and diluted (loss) / earnings per share.
| Earnings per share attributable to the ordinary equity holders of the parent | Note | 52 weeks ended 02 July 2023 pence | 53 weeks ended 03 July 2022 pence |
| (Loss) / earnings per share | 13 | | |
| - Basic | | (2.09) | 0.06 |
| - Diluted | | (2.09) | 0.06 |
Financing
The Group incurred total interest costs of £2.1 million compared to £1.2 million in the previous financial year. Interest on bank loans was £0.5 million compared to £0.2 million in the previous period. Further information can be found in Note 8.
During the year, the Group refinanced its borrowings from three individual lenders under multiple tranches with new debt facilities from HSBC Bank to provide support to the business on its roll out strategy. The new £10 million HSBC Bank facility, replaced £5.5 million of legacy debt that we acquired from acquisitions, which had a blended interest margin of 4%. The remaining £4.5 million has supported the fit out of the sites opened in the financial year. The new facility carries a margin of 3% above SONIA on a £3 million term loan and 3.25% above SONIA on a £7 million Revolving Credit Facility. Further details of the loans can be found in Note 22. At the same time, the Group has taken out an interest rate cap on the reference base rate (SONIA) fixed at 3% giving certainty over interest costs until August 2025.
In order to fund the acquisition of Dirty Martini, the Company raised new funds, totalling £5.0 million, through a combination of new shares and convertible loan notes ("CLNs"). 19,583,333 new shares were issued at a price of 12 pence per share totalling £2.35 million, which represented a premium of 26.3% to the mid-market closing price of Nightcap's Ordinary Shares on 8 June 2023. In addition, the Company issued CLNs totalling £2.65 million to existing shareholders and new investors.
The CLNs mature on 9 September 2025 and are convertible at the option of the investors subject to certain conditions. The CLNs are only convertible following a period of 12 months from issue, at the higher of 12 pence per share or a 15% discount to the volume weighted average share price of the Company's shares for the five business day period prior to the investor notifying the Company of its intention to convert. The CLNs bear a coupon of 10% per annum which shall be rolled up and settled either when a conversion notice has been served or on an Exit. In this context, an Exit is defined as being a change of control in the Company or the sale of substantially all of the business and assets of the Company.
Cash flow and financial position
The Group's cash flow from operating activities was £6.7 million compared to £2.2 million in the prior year. We continued to invest in our estate and invested £6.7 million (2022: £6.0 million) before right of use asset additions, in new site capital expenditure. This was spent bringing six new sites into the business and investing in IT systems to improve the reporting of management information. In addition, we acquired Dirty Martini via a pre-pack acquisition out of administration for an initial consideration of £4.15 million (excluding acquisition related transaction costs).
The table below sets out the Group's year end cash and net (debt) position.
| |
| At 2 July 2023 |
| Cash | Note 19 | £5.0m |
| Cash in transit | Note 2.13, 18 | £0.4m |
| Cash including cash in transit | | £5.4m |
| Net (debt) - pre IFRS 16 leases | Note 29 | £(6.7m) |
| Cash in transit | Note 2.13, 18 | £0.4m |
| Net (debt) - pre IFRS 16 leases including cash in transit | | £(6.3m) |
| IFRS 16 leases | Note 21 | £(37.9m) |
| Net (debt) - including IFRS 16 leases and cash in transit |
| £(44.2m) |
As part of the refinancing completed in August 2022, the majority of the Group's bank debt is repayable via a bullet payment in August 2025, with a further 1-year option to extend.
Lease liabilities increased to £37.9 million from £27.6 million and reflect the addition of the new sites opened during the year. This liability is expected to increase further as the Dirty Martini leases are assigned to Nightcap.
Market overview and opportunities
The Group continues to enjoy a property landscape and a corporate landscape that presents considerable opportunities to secure sites on attractive terms in prime city centre locations. The current macroeconomic environment has reduced competition so more sites are available. The significant headwinds in the UK economy, including the rise in interest rates to 5.25% has left many companies struggling to manage their debt burden and as a result they are looking for ways to re?structure their balance sheets. The acquisition of Dirty Martini as a pre-pack acquisition out of administration is one such example.
The Group faces a number of challenges as a consequence of ongoing industrial action, inflationary price pressures and the ongoing cost of living crisis.
Train strikes - Industrial action
With a loss to the industry of an estimated £3.25 billion, the ongoing train strikes, started in June 2022, continue to have a profoundly negative effect on the late night industry in particular. Industrial action has continuously targeted Thursdays, Saturdays, bank holidays and other celebratory holidays to ensure the biggest possible impact on consumers and businesses. The ongoing train strikes significantly impacted the Company's trading on these rail strike action days throughout the financial year, particularly affecting the business' ability to convert high margin evening trade during weekends, resulting in an estimated loss of £1.9 million** of EBITDA (IAS 17). We do not believe that Nightcap will be in a position to reach its fullest trading potential until the industrial action has been settled.
Inflation
Early on in the year, inflationary pressures resulted in increased fit out costs for new sites, significantly increased energy costs and increased wage cost pressures. Towards the end of the financial year we saw fit out pricing pressures subside and energy costs have continued to reduce with the Group locking into a new fixed one year deal in September 2023. This has resulted in significant additional savings as well as an easing of wage pressures as inflation has continued to reduce during the course of the year. However, inflation continues to have an impact on consumers' disposable income.
Interest rates
Given the turbulent nature of inflation and its link to interest rates as a key tool of the Bank of England to control inflation, in September 2022 the Group had hedged 80% of its bank debt interest costs for three years by taking out an interest rate cap, so that there is certainty that whilst interest rates remain high the majority of our bank interest costs will be fixed due to the interest rate cap on the reference base rate (SONIA) at 3% (Note 22).
Whilst the combination of the above factors makes the trading environment challenging, our focus on building a market leading portfolio of bars continues. We continue our focus on providing good value for everyone and a best in class customer experience and we believe that our bars operate better than ever, with management and staff that are well trained and deliver better experiences in our bars than ever before.
During FY2023, we have invested £6.7 million into new sites and refurbishments (including pre-opening costs), creating a significant number of new jobs in the year. The increase in drink sales has allowed us to secure new competitively fixed price supplier contracts for all key spirits along with enhanced retrospective volume rebates and ongoing marketing support, which has allowed us to continue to maintain our profit margin and be able to re-invest in our team and our guest experience.
As part of the integration of all subsidiary head offices into one during the financial year, there has been an increased focus on recruiting best in class subject matter experts from across the industry to strengthen the Group's senior management team as our Company continues its rapid growth. This is an important step in the Group's pursuit of recruiting and retaining a talented and committed management team, which in turn serves to mitigate operational execution risks in all departments across the business.
Further details around our risk mitigation strategies can be found in the principal risks and uncertainties section of the Annual Report.
Going Concern
The Board has considered the Group's ability to continue to operate as a going concern in the current challenging economic conditions and with the impact that the rail strikes have had on the business. As at 2 July 2023 the Group had cash balances of £5.4 million including cash in transit. During the financial year under review the Group refinanced its legacy debt with an amortising term loan (£3m) and a Revolving Credit Facility (up to £7m) repayable in August 2025.
Management has prepared forecasts for the next 15 months in three scenarios- a base case, a normalised case and a downside case.
The base case scenario was prepared ahead of the end of the financial year in the final quarter of FY2023 and included an assumption that rail strikes continue throughout the FY2024 forecast period with a negative EBITDA impact of £1.9 million. This scenario has been adjusted for trading performance in Q1 FY2024 and the cash position until the end of October 2023. The base case has been further adjusted for additional known contractual changes.
A normalised scenario was created to take into account a potential end to the rail strikes from January 2024. It further takes into account the launch of the Group's new collaboration with PianoWorks at its Barrio Covent Garden site which launched on 16 November2023.
A significant, but plausible downside case scenario was developed to stress the forecasts. This assumes continued rail strikes and no benefit from any new initiatives or partnerships. It furthermore anticipates a worsening macro-economic environment resulting in an additional significant reduction in EBITDA. To mitigate the modelled deterioration in trading, the significant but plausible downside case reduces CAPEX and includes cost savings across the Group. This downside scenario continues to show the Group meeting all borrowing covenants and having sufficient liquidity to operate the business.
The Group continues to trade in line with its revised base case model, in which the Group would meet all borrowing covenants over the next 15 months and retain sufficient headroom above the cash balances required to run the business.
The covenant with the lowest headroom in all three scenarios is the fixed cover charge covenant. The Board recognises that this cash flow forecast relies on important factors such as ongoing trading performance, which is currently volatile and impacted by the challenging macroeconomic environment, as well as the delivery of conversion into site and company EBITDA along with the implementation of a number of cash and cost improvement actions. The Board continually monitors its forecasts and the potential impacts the above factors may have.
Based on the Group's forecasts, the Directors have adopted the going concern basis in preparing the Financial Statements. The Directors have made this assessment after consideration of the Group's cash flows and related assumptions and in accordance with the Guidance on Risk Management, Internal Control and Related Financial and Business Reporting 2014 published by the UK Financial Reporting Council.
By order of the Board
Toby Rolph
Chief Financial Officer
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE 52 WEEKS ENDED 2 JULY 2023
|
|
Note | 52 weeks ended 02 July 2023 £'000 | 53 weeks ended 03 July 2022 £'000 |
| Revenue | 4 | 46,414 | 35,943 |
| Cost of sales | | (9,029) | (7,297) |
| Gross profit | | 37,386 | 28,646 |
| Administrative expenses | | (40,643) | (27,404) |
| Other income | 5 | 446 | 165 |
| Adjusted EBITDA | | 6,625 | 6,036 |
| Share based payments | 7, 26 | (181) | (345) |
| Profit on disposal of right of use asset / liability | 6 | 220 | - |
| Depreciation | 6, 15, 16 | (5,745) | (3,931) |
| Amortisation of intangible assets | 6, 14 | (627) | (549) |
| Exceptional items | 10 | (792) | (84) |
| Acquisition related transaction costs | 11 | (734) | 866 |
| Pre opening costs | 12 | (1,013) | (442) |
| Impairment | 6 | (565) | (143) |
| (Loss) / profit from continuing operations | | (2,812) | 1,407 |
| Net finance expense | 8 | (2,052) | (1,169) |
| (Loss) / profit before taxation | | (4,863) | 238 |
| Tax credit on (loss) / profit | 9 | 931 | 262 |
| (Loss) / profit and total comprehensive (loss) / profit for the period | | (3,932) | 500 |
| (Loss) / profit for the period attributable to: | | | |
| - Owners of the parent | | (4,169) | 114 |
| - Non-controlling interest | | 237 | 386 |
| | | (3,932) | 500 |
|
|
Note | 52 weeks ended 02 July 2023 pence | 53 weeks ended 03 July 2022 pence |
| Earnings per share attributable to the ordinary equity holders of the parent | | | |
| (Loss) / earnings per share | | | |
| - Basic | 13 | (2.09) | 0.06 |
| - Diluted | 13 | (2.09) | 0.06 |
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 2 JULY 2023
|
| Note | 02 July 2023 £'000 | 03 July 2022 £'000 |
| Non-current assets | | | |
| Goodwill | 14 | 12,144 | 9,751 |
| Intangible assets | 14 | 6,971 | 4,604 |
| Property, plant and equipment | 15 | 12,723 | 9,109 |
| Deferred tax asset | 25 | 1,489 | - |
| Right of use assets | 16 | 35,905 | 26,462 |
| Derivative financial asset | | 361 | - |
| Other receivable | 18 | 914 | 699 |
| Total non-current assets | | 70,507 | 50,625 |
| Current assets | | | |
| Inventories | 17 | 1,154 | 554 |
| Trade and other receivables | 18 | 3,266 | 2,005 |
| Cash and cash equivalents | 19 | 5,017 | 5,353 |
| Total current assets | | 9,438 | 7,911 |
| Total assets | | 79,945 | 58,537 |
| Current liabilities | | | |
| Loans and borrowings | 22 | (1,000) | (800) |
| Trade and other payables | 20 | (12,980) | (7,889) |
| Lease liabilities due less than one year | 21 | (3,281) | (2,374) |
| Total current liabilities | | (17,261) | (11,062) |
| Non-current liabilities | | | |
| Borrowings | 22 | (10,687) | (4,723) |
| Lease liabilities due more than one year | 21 | (34,594) | (25,254) |
| Provisions | 23 | (683) | (366) |
| Deferred tax provision | 25 | (2,200) | (891) |
| Total non-current liabilities | | (48,164) | (31,233) |
| Total liabilities | | (65,425) | (42,295) |
| Net assets | | 14,520 | 16,241 |
| Called up share capital | 27 | 2,179 | 1,983 |
| Share premium | 27 | 23,527 | 21,372 |
| Share based payment reserve | | 661 | 543 |
| Reverse acquisition reserve | | (2,513) | (2,513) |
| Retained earnings | | (10,066) | (5,639) |
| | | 13,788 | 15,746 |
| Non-controlling interest | | 732 | 495 |
| Total equity | | 14,520 | 16,241 |
The financial statements on pages 50 to 85 of the Annual Report were approved and authorised for issue by the Board and were signed on its behalf by:
Toby Rolph Sarah Willingham-Toxvaerd
Chief Financial Officer Chief Executive Officer
22 November 2023 22 November 2023
Company Number: 12899067
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE 52 WEEKS ENDED 2 JULY 2023
| | Called up share capital £'000 | Share premium £'000 | Share based payment reserve £'000 | Reverse acquisition reserve £'000 | Retained earnings £'000 | Total attributable to equity holders of parent £'000 | Non- controlling interest £'000 | Total equity £'000 |
| At 27 June 2021 | 1,855 | 19,267 | 216 | (2,513) | (5,753) | 13,073 | 109 | 13,181 |
| Issue of shares on acquisition - Barrio Bar Group | 57 | 1,051 | - | - | - | 1,108 | - | 1,108 |
| Issue of shares - Adventure Bar Group contingent consideration | 71 | 1,054 | - | - | - | 1,125 | - | 1,125 |
| Share based payments and related deferred tax recognised directly in equity |
- |
- |
326 |
- |
- |
326 |
- |
326 |
| Total transactions with owners recognised directly in equity |
1,983 |
21,372 |
543 |
(2,513) |
(5,753) |
15,632 |
109 |
15,741 |
| Total comprehensive income for the 53 week period |
- |
- |
- |
- |
114 |
114 |
386 |
500 |
| At 3 July 2022 | 1,983 | 21,372 | 543 | (2,513) | (5,639) | 15,746 | 495 | 16,241 |
| Shares issued for cash subscription - 8 June 2023 | 196 | 2,154 | - | - | - | 2,350 | - | 2,350 |
| Share based payments and related deferred tax recognised directly in equity | - | - | 118 | - | - | 118 | - | 118 |
| Dividends paid - non controlling interest portion |
- |
- |
- |
- |
(257) |
(257) |
- |
(257) |
| Total transactions with owners recognised directly in equity |
2,179 |
23,527 |
661 |
(2,513) |
(5,896) |
17,957 |
495 |
18,452 |
| Total comprehensive expense for the 52 week period |
- |
- |
- |
- |
(4,169) |
(4,169) |
237 |
(3,932) |
| At 2 July 2023 | 2,179 | 23,527 | 661 | (2,513) | (10,066) | 13,788 | 732 | 14,520 |
CONSOLIDATED STATEMENT OF CASH FLOW
FOR THE 52 WEEKS ENDED 2 JULY 2023
|
| 52 weeks ended 02 July 2023 £'000 | 53 weeks ended 03 July 2022 £'000 |
| Cash flows from operating activities | | |
| (Loss) / profit for the period | (3,932) | 500 |
| Adjustments for: | | |
| Depreciation | 5,745 | 3,931 |
| Amortisation | 627 | 549 |
| Profit on disposal of right of use asset / liability | (220) | - |
| Share based payments | 181 | 345 |
| Interest on lease liabilities | 1,699 | 917 |
| Interest on borrowings | 714 | 252 |
| Net change in fair value of interest rate cap | (361) | - |
| Impairment | 565 | 143 |
| Tax expense | (931) | (262) |
| (Increase) in trade and other receivables | (1,377) | (1,214) |
| Increase / (decrease) in trade and other payables | 4,387 | (2,785) |
| (Increase) in inventories | (255) | (113) |
| Cash generated from operations | 6,840 | 2,264 |
| Corporation taxes (paid) | (184) | (72) |
| Net cash flows from operating activities | 6,656 | 2,192 |
| Investing activities | | |
| Acquisition of Dirty Martini (Note 32) | (4,150) | - |
| Acquisition of Barrio Bar Group, net of cash | - | (991) |
| Purchase of property, plant and equipment | (6,658) | (6,008) |
| Purchase of intangible assets | (45) | (48) |
| Net cash used in investing activities | (10,853) | (7,048) |
| Financing activities | | |
| Issue of ordinary shares | 2,350 | - |
| Proceeds from borrowings (net of repayments of £500,000) | 12,030 | - |
| Issue costs in connection with borrowings | (479) | - |
| Repayment of loans and borrowings | (5,597) | (941) |
| Principal paid on lease liabilities | (2,255) | (906) |
| Interest paid on lease liabilities | (1,699) | (917) |
| Interest paid on loans and borrowings | (489) | (215) |
| Net cash inflow / (outflow) from financing activities | 3,861 | (2,979) |
| Net (decrease) in cash and cash equivalents | (336) | (7,835) |
| Cash and cash equivalents at beginning of the period | 5,353 | 13,187 |
| Cash and cash equivalents at end of the period | 5,017 | 5,353 |
Basis of Preparation
The financial information included in this announcement does not constitute statutory accounts of the Group for the 52 weeks to 2 July 2023 and 53 weeks ended 3 July 2022 but is derived from those accounts. Statutory accounts for the 52 weeks to 2 July 2023 will be delivered to the Registrar of Companies following the Group's Annual General Meeting. The auditors have reported on those accounts: their reports were (i) unqualified, (ii) did not include a reference to any matters to which the auditors drew attention by way of emphasis without qualifying their report, and (iii) did not contain a statement under section 498(2) or (3) of the Companies Act 2006.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE 52 WEEKS ENDED 2 JULY 2023
1. GENERAL INFORMATION
Nightcap plc ("the Company") and its subsidiaries ("the Group") is an award-winning independent operator of 46 themed bars.
At 22 November 2023 the Group operates 16 bars under The Cocktail Club brand, 13 under the Adventure Bar Group ("ABG") brand, seven under Barrio Familia Group brand and ten under the newly acquired Dirty Martini brand.
On 9 June 2023, Nightcap plc acquired the trade and assets for certain bars and one restaurant relating to the Dirty Martini business, for a total consideration of up to £4.65m. Nightcap is currently the operator of nine Dirty Martini bars and the Tuttons brasserie restaurant in Covent Garden. There are four Dirty Martini bars located in London with an additional five bars located in Cardiff, Bristol, Birmingham, Leeds and Manchester. Further information on this acquisition is provided in Note 32.
The Company is a public limited company whose shares are publicly traded on the AIM market of the London Stock Exchange and is incorporated and registered in England and Wales.
The registered office address of the Company is c/o Locke Lord (UK) LLP, 201 Bishopsgate, London, EC2M 3AB.
2. ACCOUNTING POLICIES
2.1. Basis of preparation of financial statements
The consolidated financial statements of Nightcap plc have been prepared in accordance with International Accounting Standards as adopted for use in the United Kingdom ("UK adopted IAS") and with the requirements of the Companies Act 2006 as applicable to companies reporting under those standards.
The accounting policies adopted in the preparation of the Financial Statements have been consistently applied to all years presented, unless otherwise stated. The Group has not early adopted any other standard, interpretation or amendment that has been issued but is not yet effective.
The financial statements have been prepared under the historical cost convention. The financial statements are presented in pounds Sterling ('£') rounded to the nearest thousand, except where otherwise indicated.
The principal accounting policies adopted in the preparation of these consolidated financial statements are set out below.
Judgements made by the Directors in the application of the accounting policies that have a significant effect on the consolidated financial statements and estimates with significant risk of material adjustment in the next year are discussed in Note 3.
Due to rounding, numbers presented in the Financial Statements may not add up precisely to the totals provided and percentages may not precisely reflect the presented figures as the underlying calculations are referenced from absolute values, whereas numbers presented have been rounded to thousands.
2.2. Going concern
Management have prepared forecasts for the next 15 months in three scenarios- a base case, a normalised case and a downside case. More detail on these scenarios has been provided in the going concern section of the Financial Review. There remains uncertainty over whether the Group will continue to meet these forecasts. This will be dependent upon the underlying economic conditions and whether there is any increase in the level of industrial action impacting the sector.
The Group continues to trade in line with the revised base case model. In all three scenario's the Group has sufficient cash to successfully operate the business and will continue to meet all bank covenants. As a result the Board is satisfied that the Group has sufficient liquidity to support the assessment that it is appropriate to prepare the financial statements for the 52 weeks ended 2 July 2023 on the going concern basis.
2.3. Basis of consolidation
A subsidiary is an entity controlled by the Group. Control is the power to govern the financial and operating policies of an entity to obtain benefits from its activities. Subsidiaries are fully consolidated from the date on which control is transferred to the Group.
All intra-Group transactions, balances, income and expenses are eliminated on consolidation.
2.4. Alternative performance measures
The Group has identified certain measures that it believes will assist the understanding of the performance of the business. These alternative performance measures ("APMs") are not defined or specified under the requirements of UK adopted IAS.
The Group believes that these APMs, which are not considered to be a substitute for, or superior to, UK adopted IAS measures, provide stakeholders with additional useful information on the underlying trends, performance and position of the Group and are consistent with how business performance is measured internally. Adjusted EBITDA is also one of the measures used by the Group's banks for the purposes of assessing covenant compliance. The APMs are not defined by UK adopted IAS and therefore may not be directly comparable with other companies' alternative performance measures.
The key APM that the Group uses is Adjusted EBITDA. This APM is set out on page 93 of the Annual Report including an explanation of how it is calculated and how it reconciles to a statutory measure where relevant.
These measures exclude exceptional items, as defined below, non-cash share-based payment charges, pre-opening costs and acquisition related costs.
Exceptional items
Exceptional items are those where, in management's opinion, their separate reporting provides a better understanding of the Group's underlying business performance; and which are significant by virtue of their size and nature. In considering the nature of an item, management's assessment includes, both individually and collectively, whether the item is outside the principal activities of the business; the specific circumstances which have led to the item arising; the likelihood of recurrence; and if the item is likely to recur, whether it is unusual by virtue of its size.
No single criterion classifies an item as exceptional, and therefore management must exercise judgement when determining whether, on balance, presenting an item as exceptional will help users of the financial statements understand the Group's underlying business performance.
Non-cash share based payment charges
Charges/credits relating to share-based payments arising from the Group's long-term incentive schemes are not considered to be exceptional but are separately identified due to the scope for significant variation in charges/credits.
Pre-opening costs
Pre-opening costs can vary significantly depending on the number of new sites acquired and opened in any period, and so do not reflect the costs of the day-to-day operations of the business. These costs are therefore split out in order to aid comparability with prior periods. Site pre-opening costs refer to costs incurred in getting new sites operational, and primarily include costs incurred before opening and in preparing for launch.
Acquisition-related costs
Acquisition-related costs are costs incurred to effect a business combination. Those costs include advisory, legal, accounting, valuation and other professional or consulting fees including employees bonuses in connection with the successful completion of a transaction. Acquisition-related costs are expensed in the period in which the costs are incurred and the services are received.
2.5. Revenue
IFRS 15 requires revenue to be recognised when goods or services are transferred to customers and the entity has satisfied its performance obligations under the contract, and at an amount that reflects the consideration to which an entity expects to be entitled in exchange for those goods or services. Revenue predominantly arises from the sale of food and drink to customers in the Group's bars for which payment in cash or cash equivalents is received immediately and as such revenue is recognised at point of sale.
The Group operates in a single geographical region (the UK) and hence all revenues are impacted by the same economic factors.
Retrospective volume rebates ('retro' payments) and listing fees are spread over the life of the contract. The income is recognised as a credit within cost of sales.
Revenue is shown net of value added tax, returns and discounts.
Customer deposits received in advance of events and bookings are recorded as deferred revenue on the balance sheet. They are recognised as revenue along with any balancing payment from the customer when the associated event / booking occurs.
2.6. Government grants
Government grants are not recognised until there is reasonable assurance that the Group will comply with the conditions attaching to them and that the grants will be received. Government grants that are receivable as compensation for losses already incurred or for the purpose of giving immediate financial support to the Group with no future related costs are recognised in profit or loss in the period in which they become receivable. This income is recognised within Other income. Where the income relates to a distinct identifiable expense, the income is offset against the relevant expense for example, income received under the Coronavirus Job Retention Scheme has been offset against staff costs.
2.7. Finance costs
Finance costs are charged to the Statement of Comprehensive Income over the term of the debt using the effective interest rate method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.
2.8. Intangible assets goodwill
Goodwill represents the difference between amounts paid on the cost of a business combination and the acquirer's interest in the fair value of the identifiable assets and liabilities of the acquiree at the date of acquisition.
Goodwill is not subject to amortisation and is tested annually for impairment, or more frequently if events or changes in circumstances indicated that they may be impaired.
2.9. Intangible assets - trademarks, licenses and brands
Separately acquired trademarks and licences are shown at historical cost. Trademarks and licences have a finite useful life and are carried at cost less accumulated amortisation and any accumulated impairment losses.
Intangible assets acquired as part of a business combination are only recognised separately from goodwill when they arise from contractual or other legal rights, are separable, the expected future economic benefits are probable and the cost or value can be measured reliably.
Asset class Amortization method and rate
Trademarks 10%- straight-line
Licenses Straight line over the life of the lease
Brand Straight-line over the expected useful economic life of the brand being 7.5 to 10 years
2.10. Property, plant and equipment
Property, plant and equipment is stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.
Depreciation is provided on the following basis:
Leasehold building improvements - straight-line over the life of the lease
Plant and machinery - 25% straight-line
Fixtures and fittings - 25% straight-line
Computer equipment - 33% straight-line
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in the Consolidated Statement of Comprehensive Income.
2.11. Inventories
Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Cost is based on the cost of purchase on a first in, first out basis.
At each reporting date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price. The impairment loss is recognised immediately in profit or loss.
2.12. Impairment
Goodwill is tested annually for impairment, or more frequently if events or changes in circumstances indicated that it might be impaired. Goodwill is not allocated to individual cash generating units ("CGUs") but to a group of CGUs encompassing all bars operating under certain brands, including any additional new sites. The brands that make up that group of CGUs is defined by the original acquisition group.
The recoverable amount is the higher of an asset's fair value less costs of disposal and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash inflows which are largely independent of the cash inflows from other assets or groups of assets (cash-generating units).
Other assets are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount.
2.13. Cash and cash equivalents
Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Payments taken from customers on debit and credit cards for which cash remains outstanding at any reporting date ("cash in transit") are recognised as trade receivables. The trade receivable is converted to cash within 3 days of processing. The Directors view these trade receivables as cash when monitoring cash flows and forecasts internally.
2.14. Financial instruments
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.
Initial recognition
The Group initially recognises trade receivables, trade payables, deposits, loans and borrowings on the date on which they are originated. All other instruments are recognised on the trade date, which is the date on which the Group becomes party to the contractual provisions of the instrument.
All financial instruments are recognised initially at fair value plus or minus, in the case of assets not at fair value through the Statement of comprehensive income, transaction costs that are attributable to the acquisition of the financial asset or liability.
Financial assets
The Group financial assets are measured at amortised cost.
A financial asset is measured at amortised cost when assets that are held for collection of contractual cash flows and where those cash flows represent solely payments of principal and interest. Interest income from these financial assets is included in finance income using the effective interest rate method.
The derivative financial asset / liability comprises the Group's interest rate cap. It is carried in the statement of financial position at fair value with changes in fair value recognised in the consolidated statement of comprehensive income in the finance expense line. The fair value of the interest rate cap is determined using the market standard methodology of discounting the future expected cash flow that would occur if variable interest rates rise above the strike rate of the interest rate cap. The variable interest rates used in the calculation of projected cash flow on the interest rate cap is based on an expectation of future interest rates derived from observable market interest rate curves and volatilities.
Trade and other receivables are recognised initially at the amount of consideration that is unconditional, unless they contain significant financing components, when they are recognised at fair value. The Group holds the trade and other receivables with the objective of collecting the contractual cash flows and therefore measures them subsequently at amortised cost using the effective interest method.
Payments taken from customers on debit and credit cards for which cash remains outstanding at any reporting date ("cash in transit") are recognised as trade receivables. The trade receivable is converted to cash within 3 days of processing.
Impairment losses are presented as a separate line item in the statement of profit or loss.
The Group assesses on a forward-looking basis the expected credit losses associated with its financial assets carried at amortised cost. The impairment methodology applied depends on whether there has been a significant increase in credit risk. For trade and other receivables, the Group applies the simplified approach permitted by IFRS 9, which requires expected lifetime losses to be recognised from initial recognition of the receivables.
Loss allowances for expected credit loss ("ECLs") are presented in the statement of financial position as a deduction from the gross carrying amount of the assets. In the profit or loss, the amount of ECL is recognised as an Impairment gain or loss.
Financial assets are derecognised when the rights to receive cash flows have expired or have been transferred and the Group has transferred substantially all risks and rewards of ownership.
Financial liabilities
Financial liabilities
Financial liabilities are classified as financial liabilities at fair value through profit or loss or as financial liabilities measured at amortised cost, as appropriate. The Group determines the classification of its financial liabilities at initial recognition.
The Group's financial liabilities include trade and other payables, loans and borrowing and other financial liabilities and accrued liabilities that are classified as measured at amortised cost.
Short-term creditors are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest rate method.
Amortised cost is calculated by taking into account any issue costs, and any discount or premium on settlement. Gains and losses arising on the repurchase, settlement or cancellation of liabilities are recognised respectively in interest and other revenues and finance costs. For substantial and non-substantial modifications the Group derecognises a financial liability from the statement of financial position when the obligation specified in the contract or arrangement is discharged, cancelled or expires.
2.15. Leased assets
Under IFRS 16, the Group recognises right-of-use assets at the commencement date of the lease (i.e. the date the underlying asset is available for use). Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any remeasurement of lease liabilities. Unless the Group is reasonably certain to obtain ownership of the leased assets at the end of the lease term, the recognised right-of-use assets are depreciated over the shorter of its estimated useful life and lease term. Right- of-use assets are subject to impairment testing as described further in Note 15. At the commencement date of the lease, the Group recognises lease liabilities measured at the present value of lease payments to be made over the lease term. The lease payments include fixed payments less any lease incentives receivable. In calculating the present value of lease payments, the Group uses its incremental borrowing rate at the lease commencement date if the interest rate implicit in the lease is not readily determinable. After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for lease payments made. In addition, the carrying amount of lease liabilities is remeasured if there is a modification or a change in the lease term. The Group applies the short-term lease recognition exemption to its short-term leases of equipment (i.e. those leases that have a lease term of 12 months or less from the commencement date and do not contain a purchase option). It also applies the lease of low-value assets recognition exemption to leases that are considered of low value. Lease payments on short-term leases and leases of low- value assets are recognised as an expense in the Statement of Comprehensive Income.
For leases acquired as part of a business combination the lease liability is measured at the present value of the remaining lease payments at the acquisition date with the right of use asset being measured at the same value. The discount rate applied to the remaining lease payments is the incremental borrowing rate of the acquiree.
2.16. Pensions
The Group operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity. Once the contributions have been paid the Group has no further payment obligations.
The contributions are recognised as an expense in the Consolidated Statement of Comprehensive Income when they fall due. Amounts not paid are shown in accruals as a liability in the Statement of Financial Position. The assets of the plan are held separately from the Group in independently administered funds.
2.17. Provisions
Provisions are made where an event has taken place that gives the Group a legal or constructive obligation that probably requires settlement by a transfer of economic benefit, and a reliable estimate can be made of the amount of the obligation.
Provisions are charged as an expense to the Consolidated Statement of Comprehensive Income in the period that the Group becomes aware of the obligation, and are measured at the best estimate at the Statement of Financial Position date of the expenditure required to settle the obligation, taking into account relevant risks and uncertainties. When payments are eventually made, they are charged to the provision carried in the Statement of Financial Position.
2.18. Share based payments
Equity-settled share-based payments to employees are measured at the fair value of the equity instruments at the grant date. The fair value excludes the effect of non-market-based vesting conditions. Details regarding the determination of the fair value of equity-settled share-based transactions are set out in Note 26.
The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight-line basis over the vesting year, based on the Group's estimate of equity instruments that will eventually vest. At each balance sheet date, the Group revises its estimate of the number of equity instruments expected to vest as a result of the effect of non-market-based vesting conditions.
The impact of the revision of the original estimates, if any, is recognised in profit or loss such that the cumulative expense reflects the revised estimate, with a corresponding adjustment to equity reserve.
2.19. Current and deferred taxation
The tax expense for each reporting period comprises current and deferred tax. Tax is recognised in the Consolidated Statement of Comprehensive Income, except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.
The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date.
Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the Statement of Financial Position date, except that:
? The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits;
? Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met; and
? Where they relate to timing differences in respect of interests in subsidiaries, associates, branches and joint ventures and the Group can control the reversal of the timing differences and such reversal is not considered probable in the foreseeable future.
Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the reporting date.
Deferred tax assets and liabilities are offset where there is a legally enforceable right to offset current tax assets and liabilities and where the deferred tax balances relate to the same tax authority. Current tax assets and tax liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.
2.20. Related party transactions
The Group discloses transactions with related parties which are not consolidated and not wholly owned within the Group. Where appropriate, transactions of a similar nature are aggregated unless, in the opinion of the Directors, separate disclosure is necessary to understand the effect of the transactions on the Group Financial Statements.
2.21. New standards, amendments and interpretations adopted
The Group has applied the same accounting policies and methods of computation in its Financial Statements as in the prior period.
There are a number of standards, amendments to standards, and interpretations, which have been issued by the IASB that are effective in future accounting periods that the Group has decided not to adopt early.
The following amendments are effective for the period beginning on or after 1 January 2023:
? Definition of Accounting Estimate (Amendments to IAS 8)
? Disclosure of Accounting Policies (Amendments to IAS 1 and IFRS Practice Statement 2)
? Classification of liabilities as current or non-current (amendments to IAS 1).
In January 2020, the IASB issued amendments to IAS 1, which clarify the criteria used to determine whether liabilities are classified as current or non-current. The Group has reviewed this standard and does not believe that the amendments to IAS 1 will have a significant impact on the classification of its liabilities.
Other
The Group does not expect any other standards issued by the IASB, but not yet effective, to have a material impact on the Group.
The following is a list of other new and amended standards which, at the time of writing, had been issued by the IASB but which are effective in future periods. The amount of quantitative and qualitative detail to be given about each of the standards will depend on each entity's own circumstances.
? IFRS 17 Insurance Contracts (effective 1 January 2023)- in June 2020, the IASB issued amendments to IFRS 17, including a deferral of its effective date to 1 January 2023.
? Deferred tax related to assets and liabilities arising from a single transaction (Amendments to IAS 12 Income taxes?effective 1 January 2023).
? Lease liability in a Sale and Leaseback (Amendments to IFRS 16- effective 1 January 2024).
3. CRITICAL ACCOUNTING JUDGEMENTS AND ESTIMATION UNCERTAINTY
The preparation of consolidated financial information in conformity with IFRS requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses.
Estimates and underlying assumptions are reviewed on an on-going basis and are based on historical experience and other factors including expectations of future events that are believed to be reasonable under the circumstances. Although these judgements, estimates and associated assumptions are based on management's best knowledge of current events and circumstances, the actual results may differ. Revisions to accounting estimates are recognised in the period in which the revision takes place and in any future periods affected.
The key assumptions concerning the future and other key sources of estimation and uncertainty at the date of the statement of financial position that have a significant risk of causing material adjustments to the carrying amounts of assets and liabilities within the next financial period are set out below.
The Directors consider the principal judgements made in the Financial Statements to be:
KEY JUDGEMENTS
Operating Segments
The Directors have taken a judgement that individual bars meet the aggregation criteria in IFRS 8 and hence have concluded that the Group only has a single reporting segment, as discussed in Note 4.
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. As the Group has external borrowings, judgement is required to compute an appropriate discount rate which was calculated based on UK bank borrowings and adjusted by an indicative credit premium that reflects the credit risk of the Group. The weighted average discount rate applied to those leases that pre-dated the Group's IPO was 4.75%. Leases entered into post IPO have been discounted with a weighted average discount rate of 4.68%. For the lease liabilities at 2 July 2023 a 0.1% increase in the discount rate used would have reduced the total liabilities by £227,000.
Consolidation of Waterloo Sunset Limited
Waterloo Sunset Limited ("Waterloo Sunset") is a subsidiary that runs and operates the Bar Elba bar in Waterloo, London. The Group has a 50% economic interest in Waterloo Sunset with each partner holding 50% of the voting rights. The Group maintains an agreement to operate Waterloo Sunset and charges a management fee of 10% of revenue to Waterloo Sunset.
The Directors have determined that the Company exerts significant influence and control because it has the power to direct all significant activities of Waterloo Sunset and has a higher economic interest in it as compared to its unrelated venture partner, and as a result consolidates Waterloo Sunset in these financial statements with a 50% non-controlling interest representing the 50% of the equity the Group does not own.
Exceptional items
Exceptional items are those where, in management's opinion, their separate reporting provides a better understanding of the Group's underlying business performance; and which are significant by virtue of their size and nature. In considering the nature of an item, management's assessment includes, both individually and collectively, whether the item is outside the principal activities of the business; the specific circumstances which have led to the item arising; the likelihood of recurrence; and if the item is likely to recur, whether it is unusual by virtue of its size.
No single criterion classifies an item as exceptional, and therefore management must exercise judgement when determining whether, on balance, presenting an item as exceptional will help users of the financial statements understand the Group's underlying business performance.
Valuation of intangible assets and goodwill
Allocation of the purchase price affects the results of the Group as finite lived intangible assets are amortised, whereas indefinite lived intangible assets, including goodwill, are not amortised and could result in differing amortisation charges based on the allocation to indefinite lived and finite lived intangible assets.
During the period, the Group acquired the trade and assets of the business known as Dirty Martini for total consideration of £4.65m. Details of the acquisition is set out in Note 32. In accordance with IFRS 3, the identifiable assets acquired and liabilities and contingent liabilities assumed should be measured at fair value at the acquisition date in order to determine the difference between the cost of acquisition and the fair value of the Group's share of net assets acquired, which should then be recognised as goodwill on the balance sheet or recognised in the income statement.
In determining the fair value, management has recognised brand value totalling £2.95m in respect of the business acquired. Key estimates used in arriving at the brand valuation include growth rates, discount rate, cashflow assumptions including working capital estimates, appropriate royalty rates and useful economic lives. Further information is provided in Notes 14 and 32.
Valuation of intangible assets and goodwill
The amount of goodwill initially recognised as a result of a business combination is dependent on the allocation of the purchase price to the fair value of the identifiable assets acquired and the liabilities assumed. The determination of the fair value of the assets and liabilities is based, to a considerable extent, on management's judgement.
Legal and Other Claims
The Group considers all legal or other claims against it. Where appropriate provision is made for management's best estimate of any liability arising. These provisions are reviewed regularly by management and the audit and risk committee and amended to reflect any new information. Where a claim has been received but management consider that it is unlikely that any liability will result this is disclosed as a contingent liability. The Group receives a number of employment or accident related claims that, having sought appropriate advice, it believes have no merit and, as a consequence, the likelihood of any payout is remote. No provision is included in the financial statements for any amounts that are considered remote.
KEY ESTIMATES
Impairment of non current assets
Annually, the Group considers whether non current assets are impaired. Where an indication of impairment is identified the estimation of recoverable value requires estimation of the recoverable value of the cash generating units (CGUs). This requires estimation of the future cash flows from the CGUs and also selection of appropriate discount rates and the longer term growth rate in order to calculate the net present value of those cash flows. Individual bars are viewed as separate CGUs in respect of the impairment of property, plant and equipment. Details of the sensitivity of the estimates used in the impairment exercise are provided in Notes 14 and 15.
Forecast business cashflows
For purposes of the going concern assessment and as an input into the impairment assessment, the Group make estimates of likely future cash flows which are based on assumptions in the base case, normalised case and significant but plausible downside case, given the uncertainties involved. The assumptions as outlined in the going concern section of the Financial Review include a deterioration of the macro environment as well as reduced profitability for the Group along with a range of mitigating factors within the Boards control. These assumptions are made by management based on recent performance and management's knowledge and expertise of the cashflow drivers going forward.
Share-based payments
The charge for share based payments in respect of the Nightcap plc Share Option Plan is calculated in accordance with the methodology described in Note 26. The model requires subjective assumptions to be made including the future volatility of the Company's share price, expected dividend yield, risk-free interest rates, expected time of exercise and employee attrition rates. Changes in such estimates may have a significant impact on the original fair value calculation at the date of grant and therefore the share based payments charge.
Amortisation of intangible assets
Amortisation is recorded to write down intangible assets to a residual value of nil over their useful economic lives (UELs). Management must therefore estimate the appropriate UELs to apply to each class of intangible asset. Changes in the estimated UELs would alter the amount of amortisation charged each year, which could materially impact the carrying value of the assets in question over the long term. UELs are therefore reviewed on an annual basis to ensure that they are in line with policy and that those policies remain appropriate.
4. SEGMENTAL REPORTING
The Group's continuing operating businesses are organized and managed as reportable business segments according to the information used by the Group's Chief Operating Decision maker ("CODM") in its decision making and reporting structure. The CODM is regarded as the Chief Executive together with other Board Members who receive financial information at a bar-by-bar level.
The Group's internal management reporting is focused predominantly on revenue and adjusted EBITDA, as these are the principal performance measures and drive the allocation of resources. The CODM receives information by trading venue, each of which is considered to be an operating segment. All operating segments have similar characteristics and, in accordance with paragraph 12 of IFRS 8, are aggregated to form an 'Ongoing business' reportable segment. Economic indicators assessed in determining that the aggregated operating segments share similar economic characteristics include expected future financial performance, operating and competitive risks and return on investment. These common risks include, but are not limited to, cost inflation, recruitment and retention, Brexit and supply chain disruption, consumer confidence, availability of new sites, impact of national industrial action, health and safety and food and drink safety. These risks are discussed in more detail in the "Principal Risks and Uncertainties" section of this Annual Report. The risks are managed, discussed and monitored at a Board level across the Group.
The Group performs all of its activities in the United Kingdom. All the Group's non-current assets are located in the United Kingdom. Revenue is earned from the sale of drink and food with a small amount of admission income.
Revenue
Revenue arises from the sale of food and drink to customers in the Group's bars for which payment in cash or cash equivalents is received immediately. The Group operates in a single geographical region (the UK) and hence all revenues are impacted by the same economic factors. Accordingly, revenue is presented as a single category and further disaggregation is not appropriate or necessary to gain an understanding of the risks facing the business.
5. OTHER INCOME
|
| 52 weeks ended 02 July 2023 £'000 | 53 weeks ended 03 July 2022 £'000 |
| Business interruption insurance proceeds - COVID related | - | 10 |
| Government grants | - | 155 |
| Insurance claims | 446 | - |
| | 446 | 165 |
6. OPERATING (LOSS) / PROFIT
The operating (loss) / profit is stated after charging/ (crediting):
|
|
Note | 52 weeks ended 02 July 2023 £'000 | 53 weeks ended 03 July 2022 £'000 |
| (Loss) / profit from operations is stated after charging / (crediting): | | | |
| Share based payments | 7, 26 | 181 | 345 |
| Depreciation of tangible fixed assets | 15 | 2,467 | 1,707 |
| Depreciation of right of use assets | 16 | 3,278 | 2,224 |
| Amortisation of intangible assets: | | | |
| - Trademarks | 14 | 30 | 21 |
| - Brands | 14 | 597 | 528 |
| Auditors' remuneration | | | |
| - for statutory audit services | | 176 | 106 |
| - for other assurance services | | - | 25 |
| Exceptional costs | 10 | 792 | 84 |
| Acquisition related transaction costs | 11 | 734 | (866) |
| Pre-opening costs | 12 | 1,013 | 442 |
| Profit on disposal of right of use asset / liability | | (220) | - |
| Impairment of tangible fixed assets | 15 | 565 | 47 |
| Impairment of right of use asset | 16 | - | 96 |
7. EMPLOYEES AND DIRECTORS
The average monthly number of employees, including the Directors, during the period was as follows:
|
| 52 weeks ended | 53 weeks ended |
| Management | 85 | 49 |
| Operations | 669 | 510 |
| | 754 | 559 |
Staff costs were as follows:
|
| Note | 52 weeks ended | 53 weeks ended |
| Wages and salaries | | 15,798 | 11,549 |
| Social security costs | | 1,339 | 1,156 |
| Defined contribution pension costs | | 183 | 128 |
| Other employment costs | | 48 | 109 |
| | | 17,368 | 12,942 |
| Share based payments | 26 | 181 | 345 |
| | | 17,549 | 13,287 |
All of the Group's employees were based in the United Kingdom in the current and prior periods.
The following table shows a breakdown of the remuneration of individual Directors who served in all or part of the period.
| Name | Salary and Fees £'000 | Annual | Transaction | Pension | Total |
| Sarah Willingham-Toxvaerd | 260 | - | - | 13 | 273 |
| Toby Rolph | 175 | - | | 9 | 184 |
| Michael Willingham-Toxvaerd | 3251 | - | 1002 | 9 | 434 |
| Gareth Edwards | 75 | - | - | - | 75 |
| Tobias Van der Meer | - | - | - | - | - |
| Lance Moir | 29 | - | - | - | 29 |
| Thi-Hanh Jelf | 29 | - | - | - | 29 |
| Total | 893 | - | 100 | 31 | 1,023 |
1 Salary includes fees relating to the share placing for the Dirty Martini acquisition, in line with his service agreement as described within the AIM admission document.
2 Relates to the acquisition of certain of the assets of DC Bars Limited, the operator of the 'Dirty Martini' chain of cocktail bars, on 9 June 2023, in line with the framework in his service agreement as described within the Company's AIM admission document.
Further information in respect of Directors' remuneration is provided in the Remuneration Committee Report.
Key management personnel compensation
Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the Group, including the Directors of the Company listed above.
|
| 52 weeks ended 02 July 2023 £'000 | 53 weeks ended 03 July 2022 £'000 |
| Key management emoluments | 1,192 | 1,617 |
| Pension contribution | 40 | 25 |
| | 1,233 | 1,642 |
8. FINANCE COSTS
|
| Note | 52 weeks ended | 53 weeks ended |
| Interest on bank overdrafts and loans | | 503 | 205 |
| Interest on lease liabilities | 21 | 1,699 | 917 |
| Net change in fair value of hedging instrument in a fair value hedge | | (361) | - |
| Amortisation of debt issue costs - HSBC | | 136 | - |
| Amortisation of debt issue costs - legacy debt | | 74 | 47 |
| | | 2,052 | 1,169 |
9. TAX (CREDIT) / CHARGE ON LOSS
The income tax credit is applicable on the Group's operations in the UK.
|
| Note | 52 weeks ended | 53 weeks ended |
| Taxation charged / (credited) to the income statement | | | |
| Current income taxation | | 61 | 131 |
| Adjustments for current taxation of prior periods | | (12) | (54) |
| Total current income taxation | | 49 | 77 |
| Deferred Taxation | | | |
| Origination and reversal of temporary timing differences | | | |
| Current period | | (988) | (372) |
| Adjustments in respect of prior periods | | 37 | 56 |
| Adjustment in respect of change of rate of corporation tax | | (29) | (23) |
| Total deferred tax | 25 | (980) | (339) |
| Total taxation credit in the consolidated income statement | | (931) | (262) |
| The above is disclosed as: | | | |
| Income tax (credit) - current period | | (956) | (264) |
| Income tax charge - prior period | | 25 | 2 |
| | | (931) | (262) |
|
| 52 weeks ended | 53 weeks ended |
| Factors affecting the tax credit for the period (Loss) / profit before tax | (4,863) | 238 |
| At UK standard rate of corporation taxation of 20.5% (2022: 19%) | (997) | 45 |
| Income not assessable for tax purposes | - | (231) |
| Expenses not deductible for tax purposes | 175 | 14 |
| Fixed asset differences | 161 | (33) |
| Timing differences on leases | - | 34 |
| Deferred tax (charged)/credited directly to equity | (63) | - |
| Other temporary differences | 100 | - |
| Movement in unrecognised deferred tax | (215) | 23 |
| Adjustments to current tax charge in respect of prior periods | (12) | (54) |
| Adjustments to deferred tax charge in respect of prior periods | 37 | 56 |
| Adjustment in respect of change of rate of corporation tax | (116) | (117) |
| Total tax credit for the period | (931) | (262) |
10. EXCEPTIONAL ITEMS
|
| 52 weeks ended | 53 weeks ended |
| Included in administrative expenses: | | |
| Legal cost accrual | 300 | - |
| Site closure costs | 81 | - |
| Reorganisation costs | 411 | 84 |
| | 792 | 84 |
In the 52 weeks ended 3 July 2023 the Group has made an accrual for legal costs in relation to a claim - see Note 34 for further details.
In the 52 weeks ended 3 July 2023 the Group closed its previous legacy, The Cocktail Club site in Bethnal Green. This site had no material impact on the Group's trading in the period.
In the 52 weeks ended 3 July 2023 and 53 weeks ended 3 July 2022, reorganisation costs were incurred in relation to the restructuring and reorganisation of certain employees in the Group.
11. ACQUISITION RELATED TRANSACTION COSTS
|
| Note | 52 weeks ended | 53 weeks ended |
| Acquisition related transaction costs | | 734 | 352 |
| Adventure Bar Group contingent consideration | | - | (1,218) |
| | 2.4 | 734 | (866) |
The acquisition related transaction costs in the 52 weeks ended 2 July 2023 relate to costs incurred directly in connection with the acquisition of the trade and assets relating to Dirty Martini. For the 53 weeks ended 3 July 2022 these costs relate to the acquisition of Barrio Familia Limited.
The acquisition of Adventure Bar Group in May 2021 included contingent deferred consideration to be settled with the issue of shares. Certain estimates had been used in valuing the consideration including share price volatility, enterprise value/EBITDA multiples, risk free rates and estimates on probabilities and timing for the satisfaction of the shares to be issued. In June 2022, the Group issued 7,142,856 new ordinary shares relating to the deferred consideration and the difference between the issue price of 15.75p and the estimate used in the prior year to value the consideration has been taken as a gain to the prior year Consolidated Statement of Comprehensive Income in accordance with IFRS 3.
12. PRE OPENING COSTS
|
| Note | 52 weeks ended | 53 weeks ended |
| Pre opening costs | 2.4 | 1,013 | 442 |
13. EARNINGS PER SHARE
Basic earnings / (loss) per share is calculated by dividing the profit/(loss) attributable to equity shareholders by the weighted average number of shares outstanding during the year, excluding unvested shares held pursuant to The Nightcap plc Share Option Plan. Further details of the share options that could potentially dilute basic earnings per share in the future are provided in Note 26.
Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion of all potential dilutive ordinary shares. During the 52 weeks ended 2 July 2023 and the 53 weeks ended 3 July 2022 the Group had potentially dilutive shares in the form of unvested shares options pursuant to the above long-term incentive plan.
|
| 52 weeks ended | 53 weeks ended |
| (Loss) / profit for the period after tax for the purposes of basic and diluted earnings per share | (4,169) | 114 |
| Non-controlling interest | 237 | 386 |
| Taxation credit | (931) | (262) |
| Finance cost | 2,052 | 1,169 |
| Exceptional items | 792 | 84 |
| Acquisition related costs | 734 | (866) |
| Pre-opening costs | 1,013 | 442 |
| Share based payment charge | 181 | 345 |
| Impairment | 565 | 143 |
| Depreciation and amortisation | 6,372 | 4,480 |
| Profit on disposal of right of use asset / liability | (220) | - |
| Profit for the period for the purposes of Adjusted EBITDA (IFRS 16) basic and diluted earnings per share | 6,625 | 6,036 |
| IAS 17 Rent charge | (3,997) | (2,727) |
| Profit for the period for the purposes of Adjusted EBITDA (IAS 17) basic and diluted earnings per share | 2,627 | 3,309 |
| | 52 weeks ended | 53 weeks ended |
| Weighted average number of ordinary shares in issue for the purposes of basic earnings per share | 199,591,866 | 189,008,260 |
| Effect of dilutive potential ordinary shares from share options | 950,758 | 6,529,509 |
| Weighted average number of ordinary shares in issue for the purposes of diluted earnings per share | 200,542,623 | 195,537,769 |
|
| 52 weeks ended | 53 weeks ended |
| Earnings per share: | | |
| Basic | (2.09) | 0.06 |
| Diluted | (2.09) | 0.06 |
| Adjusted EBITDA (IFRS 16) basic | 3.32 | 3.19 |
| Adjusted EBITDA (IFRS 16) diluted | 3.30 | 3.09 |
| Adjusted EBITDA (IAS 17) basic | 1.32 | 1.75 |
| Adjusted EBITDA (IAS 17) diluted | 1.31 | 1.69 |
During a period where the Group or Company makes a loss, accounting standards require that 'dilutive' shares for the Group be excluded in the earnings per share calculation, because they will reduce the reported loss per share.
14. INTANGIBLE ASSETS
|
| Trademarks and | Brand | Total | Goodwill |
| (i) Cost or valuation | | | | |
| At 28 June 2021 | 155 | 2,982 | 3,137 | 6,573 |
| Additions | 48 | - | 48 | - |
| On acquisition - Barrio Familia Group | 101 | 1,936 | 2,037 | 3,178 |
| At 3 July 2022 | 304 | 4,918 | 5,222 | 9,751 |
| At 4 July 2022 | 304 | 4,918 | 5,222 | 9,751 |
| Additions | 45 | - | 45 | - |
| On acquisition - Dirty Martini (Note 32) | - | 2,950 | 2,950 | 2,393 |
| At 2 July 2023 | 349 | 7,868 | 8,217 | 12,144 |
| (ii) Amortisation | | | | |
| At 28 June 2021 | 4 | 49 | 53 | - |
| Provided for the period | 21 | 528 | 549 | - |
| On acquisition - Barrio Familia Group | 16 | - | 16 | - |
| At 3 July 2022 | 41 | 577 | 618 | - |
| At 4 July 2022 | 41 | 577 | 618 | - |
| Provided for the period | 30 | 597 | 627 | - |
| At 2 July 2023 | 71 | 1,174 | 1,245 | - |
| (iii) Net book value | | | | |
| At 28 June 2021 | 151 | 2,933 | 3,084 | 6,573 |
| At 3 July 2022 | 263 | 4,341 | 4,604 | 9,751 |
| At 2 July 2023 | 278 | 6,694 | 6,971 | 12,144 |
Goodwill of £2,393,000 arose on the acquisition of Dirty Martini in June 2023 - see Note 32 (03 July 2022 - £3,178,000 arose on the acquisition of the Barrio Familia Group).
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 business's fair value less costs of disposal and its value in use.
For the purposes of its impairment test for goodwill and intangible assets, the CGU is determined by the acquisition that generated the respective goodwill and intangible assets. Our CGUs with related goodwill and brand intangibles are Adventure Bar Group, Barrio Familia and Dirty Martini. The value in use is calculated based upon the Group's latest five?year forecast to June 2028, incorporating the assumptions concerning the rate at which business unit level cash flows are generated and ongoing capital expenditure. The value in use calculations use an annual growth rate of 2% in the initial period, with the exception of Dirty Martini. Dirty Martini's calculation uses a rate of 7% in year 1, and 2% thereafter. A higher rate was used for Dirty Martini to reflect managements expectations of an one off uplift in trade following the acquisition of the business from administration The discount rate used to determine the present value of projected future cash flows is based on the Group's Weighted Average Cost of Capital ("WACC") and the Group's current view of achievable long-term growth. The pre-tax discount rate and terminal growth rate used in the discounted cash flow model were 14% and 2% respectively.
The estimation of value in use involves significant judgement in the determination of inputs to the discounted cash flow model and is most sensitive to changes in future cash flows, discount rates and terminal growth rates applied to cash flows beyond the forecast year. The sensitivity of key inputs and assumptions used was tested by recalculating the recoverable amount using reasonably possible variances to those assumptions. The discount rate was increased by 1%, the terminal growth rate was decreased by 1%, and future cash flows were reduced by 20%. As at 2 July 2023, no reasonably possible change in an individual key input or assumption, as described, would result in the carrying amount exceeding its recoverable amount based on value in use.
15. PROPERTY, PLANT AND EQUIPMENT
|
| Leasehold improvements | Plant and | Furniture, | Computer equipment | Total |
| (i) Cost or valuation | | | | | |
| At 28 June 2021 | 3,933 | 2,115 | 814 | 161 | 7,023 |
| Additions | 3,939 | 1,405 | 887 | - | 6,231 |
| On acquisition - Barrio Familia Group | 1,835 | 775 | 1,050 | - | 3,661 |
| Reclassification | - | 134 | 27 | (161) | - |
| Impairment | (27) | (19) | - | - | (47) |
| At 3 July 2022 | 9,680 | 4,411 | 2,778 | - | 16,869 |
| At 4 July 2022 | 9,680 | 4,411 | 2,778 | - | 16,869 |
| Additions | 2,708 | 1,842 | 1,652 | - | 6,202 |
| On acquisition - Dirty Martini | 306 | 136 | - | - | 442 |
| Disposals | (40) | (1,102) | (1,063) | - | (2,205) |
| At 2 July 2023 | 12,655 | 5,288 | 3,367 | - | 21,309 |
| (ii) Depreciation | | | | | |
| At 28 June 2021 | 1,728 | 1,263 | 395 | 90 | 3,476 |
| Provided for the period | 573 | 742 | 392 | - | 1,707 |
| On acquisition - Barrio Familia Group | 1,029 | 698 | 850 | - | 2,577 |
| Reclassification | - | 85 | 6 | (90) | - |
| At 3 July 2022 | 3,329 | 2,788 | 1,643 | - | 7,760 |
| At 4 July 2022 | 3,329 | 2,788 | 1,643 | - | 7,760 |
| Provided for the period | 1,024 | 761 | 681 | - | 2,467 |
| Disposal | (40) | (1,102) | (1,063) | - | (2,205) |
| Impairment | 294 | 17 | 254 | - | 565 |
| At 2 July 2023 | 4,608 | 2,465 | 1,514 | - | 8,587 |
| (iii) Net book value | | | | | |
| At 27 June 2021 | 2,205 | 853 | 419 | 71 | 3,548 |
| At 3 July 2022 | 6,351 | 1,623 | 1,136 | - | 9,109 |
| At 2 July 2023 | 8,047 | 2,822 | 1,853 | - | 12,723 |
Impairment of property, plant and equipment and right of use assets
The Group has determined that each bar is a separate CGU 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.
The value in use of each CGU is calculated based upon the Group's latest five-year forecast. The bar cash flows include an allocation of central costs and ongoing capital expenditure. Cash flows beyond the initial FY23/24 budget period are extrapolated using the Group's estimate of the long-term growth rate, currently 2%.
The key assumptions in the value in use calculations are the like-for-like sales projections for each bar, changes in the operating cost base, the long-term growth rate and the pre-tax discount rate. The pre-tax discount rate is derived from the Group's WACC and is currently 14%.
In June 2023, the Group made the decision to temporarily cease trading at the Barrio Watford site. The Group retains the lease for this site and is considering whether to either launch an alternative brand on the site, partner with another operator or dispose of the lease. As a consequence, the Group has recognised an impairment charge of £565,000 in relation to the tangible fixed assets.
The cash flows used within the impairment model are based upon assumptions which are sources of estimation uncertainty. Management has performed sensitivity analysis on the key assumptions in the impairment model using reasonably possible changes in the key assumptions. A reduction in cash flows of 20% in each year does not result in any additional impairment charge. A 100 basis point increase in the discount rate does not result in any additional impairment charge and a 50 basis point reduction in the terminal growth rate does not result in any additional impairment charge.
16. RIGHT OF USE ASSETS
|
| Right of use assets |
| (i) Cost | |
| At 28 June 2021 | 15,491 |
| Additions | 10,070 |
| Impairment | (96) |
| On acquisition - Barrio Familia Group | 5,265 |
| At 3 July 2022 | 30,730 |
| At 4 July 2022 | 30,730 |
| Additions | 12,746 |
| Disposals | (312) |
| Revaluations | - |
| At 2 July 2023 | 43,164 |
| (ii) Depreciation | |
| At 28 June 2021 | 2,045 |
| Provided for the period | 2,224 |
| At 3 July 2022 | 4,269 |
| At 4 July 2022 | 4,269 |
| Provided for the period | 3,278 |
| Disposals | (288) |
| At 2 July 2023 | 7,259 |
| (iii) Net book value | |
| At 28 June 2021 | 13,447 |
| At 3 July 2022 | 26,462 |
| At 2 July 2023 | 35,905 |
17. INVENTORIES
|
| 02 July 2023 | 03 July 2022 |
| Food, beverage and consumables | 1,154 | 554 |
There is no material difference between the replacement cost of inventories and the amounts stated above. Inventories are charged to cost of sales in the consolidated statement of comprehensive income.
18. TRADE AND OTHER RECEIVABLES
| | 02 July 2023 | 03 July 2022 |
| Included within Current assets | | |
| Trade receivables | 1,277 | 981 |
| Other receivables | 169 | 50 |
| Prepayments and accrued income | 1,820 | 974 |
| | 3,266 | 2,005 |
| Included within Non-current assets | | |
| Other receivables - rent deposits | 914 | 699 |
Included within trade receivables is £349,000 (3 July 2022 - £649,000) relating to credit card receivables (Note 2.13). Receivables are denominated in Sterling.
The Group held no collateral against these receivables at the balance sheet dates. The Directors consider that the carrying amounts of receivables are recoverable in full and that any expected credit losses are immaterial.
At each period end, there were no overdue receivable balances.
19. CASH AND CASH EQUIVALENTS
|
| 02 July 2023 | 03 July 2022 |
| Cash at bank and in hand | 5,017 | 5,353 |
Cash and cash equivalents comprise cash at bank and in hand. The fair value of cash and cash equivalents is the same as the carrying value.
20. TRADE AND OTHER PAYABLES
|
| 02 July 2023 | 03 July 2022 |
| Trade payables | 4,628 | 2,841 |
| Social security and other taxes | 2,458 | 1,272 |
| Corporation tax | 288 | 423 |
| Other payables | 2,048 | 370 |
| Accruals and deferred income | 3,559 | 2,983 |
| | 12,980 | 7,889 |
Trade payables were all denominated in Sterling and comprise amounts outstanding for trade purchases and ongoing costs and are non-interest bearing.
The Directors consider that the carrying amount of trade payables approximate to their fair value.
21. LEASES
This note provides information for leases where the Group is the lessee.
The Group leases the entire The Cocktail Club, Adventure Bar Group and Barrio Familia Group estates as well as its Head Office. The leases are non-cancellable operating leases with varying terms, escalation clauses and renewal rights and in some cases include variable payments that are not fixed in amount but based upon a percentage of sales. Lease agreements are typically made for fixed years of between 5 and 25 years. At year end the weighted average lease term remaining is 14 years (03 July 2022 - 14 years).
In accordance with IFRS 16, leases of property, plant and equipment are recognised as a right-of-use asset and a corresponding liability at the date at which the leased asset is available for use by the Group.
Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the net present value of the following lease payments:
? fixed payments (including in-substance fixed payments), less any lease incentives receivable, and
? variable lease payment that are based on an index or a rate, initially measured using the index or rate as at the commencement date
Lease payments to be made under reasonably certain extension options are also included in the measurement of the liability.
The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be readily determined, which is generally the case for leases in the Group, the lessee's incremental borrowing rate is used, being the rate that the Group 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.
|
| Lease liability |
| At 28 June 2021 | 13,903 |
| Additions | 10,070 |
| On acquisition - Barrio Familia Group | 5,265 |
| Interest expense | 917 |
| Lease payments | (2,528) |
| At 3 July 2022 | 27,627 |
| At 4 July 2022 | 27,627 |
| Additions | 12,746 |
| Disposals | (244) |
| Interest expense | 1,699 |
| Lease payments | (3,954) |
| At 2 July 2023 | 37,875 |
|
| 02 July 2023 | 03 July 2022 |
| Lease liability: | | |
| Current | 3,281 | 2,374 |
| Non-current | 34,594 | 25,254 |
| | 37,875 | 27,627 |
Amounts recognised in the consolidated statement of comprehensive income
|
| 02 July 2023 | 03 July 2022 |
| Depreciation charge of right of use assets | 3,278 | 2,224 |
| Interest expense (included in finance cost) | 1,699 | 917 |
22. BORROWINGS
|
| 02 July 2023 | 03 July 2022 |
| Short-term borrowing | | |
| Secured bank loans | 1,000 | 793 |
| Unsecured bank loan | - | 7 |
| | 1,000 | 800 |
|
| 02 July 2023 | 03 July 2022 |
| Long term borrowings | | |
| Secured bank loans | 8,037 | 4,723 |
| Convertible loan notes | 2,650 | - |
| | 10,687 | 4,723 |
Secured bank loans
In August 2022, the Group refinanced its borrowings from three individual lenders under multiple tranches with a new £10.0m debt facility from HSBC Bank, comprised of a £3m term loan and a £7m Revolving Credit Facility, to provide support to the business as it executes on its roll out strategy. The new £10.0m HSBC facility, replaced £5.5m of legacy debt that was acquired from acquisitions, which had a blended interest margin of 4%, with the new facility bearing a margin of 3% above SONIA on the £3m term loan and 3.25% above SONIA on the £7m Revolving Credit Facility. The Group has taken out an interest rate cap on its reference base rate at 3% on £8m out of £10m of its HSBC facility.
The Group's borrowings are secured on a fixed and floating charge basis over the assets of the Company and its wholly owned subsidiaries.
In order to fund the acquisition of Dirty Martini, the Company raised new funds, totalling £5.0 million, through a combination of the issue of new shares and convertible loan notes ("CLNs"). 19,583,333 new shares were issued at a price of 12 pence per share totalling £2.35 million - see Note 27.
The Company issued CLNs totalling £2.65 million to existing shareholders and new investors. The CLNs mature on 9 September 2025 and are convertible at the option of the investors subject to certain conditions. The CLNs are only convertible following a period of 12 months from issue, at the higher of 12 pence per share or a 15% discount to the volume weighted average share price of the Company's shares for the five business day period prior to the investor notifying the Company of its intention to convert. The CLNs bear a coupon of 10% per annum which shall be rolled up and settled either when a conversion notice has been served or on an Exit. In this context, an Exit is defined as being a change of control in the Company or the sale of substantially all of the business and assets of the Company.
23. PROVISIONS
|
| Dilapidations provisions |
| At 28 June 2021 | 150 |
| On acquisition - Barrio Familia Group | 216 |
| At 3 July 2022 | 366 |
| On acquisition - Dirty Martini (Note 32) | 317 |
| At 2 July 2023 | 683 |
The Group expects the dilapidations provision to reverse over the underlying lease term.
24. FINANCIAL INSTRUMENTS
The Group is exposed to the risks that arise from its use of financial instruments. Derivative instruments may be transacted solely for risk management purposes. The management consider that the key financial risk factors of the business are liquidity risks, interest rate risk and market risks. The Group operates solely within the UK and therefore has limited exposure to foreign exchange risk. The Group's exposure to credit risk is limited due to insignificant receivables balances.
This note describes the objectives, policies and processes of the Group for managing those risks and the methods used to measure them.
Interest rate risk
The Group is exposed to cash flow interest rate risk from long-term borrowings at variable rates.
Given the turbulent nature of inflation and its link to interest rates as a key tool of the Bank of England to control inflation, the Group has hedged over 80% of its debt interest costs for three years by taking out an interest rate cap, so that there is certainty that whilst interest rates increase, the majority of our interest costs will be fixed based on the reference base rate at 3%.
Commodity price risk
The Group is exposed to movements in the wholesale prices of foods and drinks. Although the Group sources a majority of products in the UK there is a risk that disruption to supply caused by Brexit or the conflict in Ukraine will cause a significant increase in wholesale food and drink prices. Prices for drinks typically rise once a year to provide short term protection to the Group. The Group benchmarks and verifies any potential cost changes from suppliers and also has the ability to flex its offering to customers to mitigate specific product related cost pressures.
Liquidity risk
The Group's primary objective is to ensure that it has sufficient funds available to meet its financial obligations as they fall due. Following the Company's IPO in January 2021, the placement of additional shares in May 2021 and June 2023 and the refinance with HSBC Bank (Note 22), the Group believes it has sufficient liquidity, along with a cash generative business model.
Capital risk
The Group manages its capital to ensure it will be able to continue as a going concern while maximising the return to shareholders through optimising the debt and equity balance.
The Group monitors cash balances and prepares regular forecasts, which are reviewed by the board. In order to maintain or adjust the capital structure, the Group may, in the future, issue new shares for future acquisition opportunities.
Financial assets and liabilities
Financial assets and liabilities consist of the following:
|
| 02 July 2023 | 03 July 2022 |
| Financial Assets at amortised cost | | |
| Trade receivables | 1,277 | 981 |
| Cash and cash equivalents | 5,017 | 5,353 |
| | 6,294 | 6,334 |
| Financial liabilities at amortised cost | | |
| Trade payables | 4,628 | 2,841 |
| Borrowings | 11,687 | 5,523 |
| | 16,315 | 8,364 |
There are no material differences between the carrying values of financial assets and liabilities held at amortised cost and their fair values.
Maturity analysis
The maturity analysis table below analyses the Group's contractual undiscounted cash flows for the Group's financial liabilities:
|
| Less than | 1 - 2 | 2 - 3 | 3 - 4 | 4 - 5 | More than | Total |
| 02 July 2023 | | | | | | | |
| Secured bank loans | 1,000 | 1,500 | 6,537 | - | - | - | 9,037 |
| Convertible loan notes | - | - | 2,650 | - | - | - | 2,650 |
| Trade and other payables | 4,628 | - | - | - | - | - | 4,628 |
| | 5,628 | 1,500 | 9,187 | - | - | - | 16,315 |
| 03 July 2022 | | | | | | | |
| Secured bank loans | 793 | 3,712 | 591 | 299 | 120 | - | 5,515 |
| Other loans | 7 | - | - | - | - | - | 7 |
| Trade and other payables | 2,841 | - | - | - | - | - | 2,841 |
| | 3,641 | 3,712 | 591 | 299 | 120 | - | 8,364 |
The maturity profile of the Group's lease liabilities as at 2 July 2023 was as follows:
|
| 02 July 2023 | 03 July 2022 |
| Within one year | 4,956 | 3,563 |
| In more than one year but less than two years | 3,938 | 3,200 |
| In more than two years but less than three years | 3,812 | 2,816 |
| In more than three years but less than four years | 3,785 | 2,691 |
| In more than four years but less than five years | 3,744 | 2,664 |
| In more than five years | 31,661 | 22,463 |
| | 51,897 | 37,397 |
| Effects of discounting | (14,023) | (9,769) |
| Lease liabilities | 37,875 | 27,627 |
There are no committed lease liabilities not yet commenced at 2 July 2023.
25. DEFERRED TAXATION
|
| Fixed asset | Losses | Acquisition accounting | Share Schemes | Other | Total |
| At 28 June 2021 | 46 | (350) | 1,084 | (105) | (8) | 667 |
| On acquisition - Barrio Familia Group | (48) | - | 593 | - | - | 545 |
| Recognised in income statement (Note 9) | (180) | - | (159) | - | - | (339) |
| Change in deferred tax rate (Note 9) | - | - | - | - | - | - |
| Recognised in equity | - | - | - | 18 | - | 18 |
| At 3 July 2022 | (182) | (350) | 1,518 | (86) | (8) | 891 |
| On acquisition - Dirty Martini (Note 32) | - | - | 738 | - | - | 738 |
| Reclassification | 127 | (91) | (24) | (12) | - | - |
| Recognised in income statement (Note 9) | 704 | (1,489) | (188) | - | (8) | (980) |
| Transferred to deferred tax asset | - | 1,489 | - | - | - | 1,489 |
| Recognised in equity | - | - | - | 63 | - | 63 |
| At 2 July 2023 | 649 | (441) | 2,044 | (36) | (16) | 2,200 |
26. SHARE BASED PAYMENTS
The Group currently uses one equity settled share plan to incentivise its Executive Directors and employees - The Nightcap plc Share Option Plan (the "Plan").
In accordance with IFRS 2 Share Based Payments, 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. The vesting period on the Plan is between 1 and 3 years with an expiration date of 10 years from the date of grant. Furthermore, share options are forfeited if the employee leaves the Group before the options vest unless forfeiture is waived at the discretion of the Board of Directors.
The Group recognised a total charge of £181,000 (53 weeks ended 03 July 2022 - £345,000) in respect of the Group's share based payment plans and related employer's national insurance of £21,000) (53 weeks ended 03 July 2022 - £(18,000)).
|
| The Nightcap plc |
| Outstanding at 28 June 2021 | 20,079,988 |
| Granted during the period - November 2021 | 1,350,000 |
| Granted during the period - March 2022 | 3,864,406 |
| Lapsed / forfeited during the period | (1,790,169) |
| Outstanding at 3 July 2022 | 23,504,225 |
| Granted during the period - December 2022 | 2,770,000 |
| Granted during the period - June 2023 | 1,160,000 |
| Lapsed / forfeited during the period | (3,574,946) |
| Outstanding at 2 July 2023 | 23,859,279 |
Nightcap Share Option Plan
The Nightcap plc Share Option Plan (the "Plan") is a discretionary executive and management share option plan. One-off Plan awards were granted at the time of the IPO, and subsequently post IPO. The vesting conditions of the Plan are set out in the Remuneration Committee report.
The fair value of the options granted in the period have been calculated using the Black Scholes option pricing model assuming the inputs shown below. The fair value of the option awards was estimated at the grant date taking into account the terms and conditions upon which the awards were granted. This model uses historic dividends and share price fluctuations to predict the distribution of relative share price performance. The shares are potentially dilutive for the purposes of calculating diluted earnings per share.
The following assumptions were used:
|
| 15 December 2022 | 29 June 2023 |
| Number of options granted | 2,770,000 | 1,160,000 |
| Share price at date of grant (pence) | 8.5 | 11 |
| Exercise price (pence) | 10 | 11 |
| Option life in years | 10 years | 10 years |
| Risk free rate (%) | 3.21% | 4.71% |
| Expected dividend yield (%) | 0.00% | 0.00% |
| Fair value of options (pence) | 3.3 | 5.2 |
The fair value of the options granted in the comparative period have been calculated using the Black Scholes option pricing model assuming the inputs shown below.
|
| 23 November 2021 | 15 March 2022 |
| Number of options granted | 1,350,000 | 3,864,406 |
| Share price at date of grant (pence) | 20 | 14.75 |
| Exercise price (pence) | 20 | 14.75 |
| Option life in years | 10 years | 10 years |
| Risk free rate (%) | 0.74% | 1.44% |
| Expected dividend yield (%) | 0.00% | 0.00% |
| Fair value of options (pence) | 7.56 | 5.92 |
The weighted average exercise price for options outstanding at the year end was 12p (03 July 2022 - 14p).
27. CALLED-UP SHARE CAPITAL
|
| 02 July 2023 | 03 July 2022 |
| Allotted, called up and fully paid ordinary shares | 2,179 | 1,983 |
|
| 02 July 2023 | 03 July 2022 |
| Ordinary shares at £0.01 each | 217,883,990 | 198,300,657 |
The table below summarises the movements in share capital for Nightcap plc during the periods ended 2 July 2023 and 3 July 2022:
|
| Ordinary | Ordinary Shares | Ordinary Shares |
| At 27 June 2021 | 185,475,192 | 1,855 | 19,267 |
| Shares issued in connection with Barrio Bar Group acquisition - 21 November 2021 | 5,682,609 | 57 | 1,051 |
| Shares issued in connection with Adventure Bar Group contingent consideration - 29 June 2022 | 7,142,856 | 71 | 1,054 |
| At 3 July 2022 | 198,300,657 | 1,983 | 21,372 |
| Shares issued for cash subscription - 8 June 2023 | 19,583,333 | 196 | 2,154 |
| At 2 July 2023 | 217,883,990 | 2,179 | 23,527 |
- On 21 November 2022 the Company acquired the Barrio Familia Group for initial consideration comprising 5,682,609 Ordinary Shares
- On 29 June 2022 the Company issued 7,142,856 Ordinary shares in connection with the settlement of the contingent consideration arising from the Adventure Bar Group acquisition in May 2021.
- On 8 June 2023 the Company raised new funds, totalling £5.0 million, through a combination of new ordinary shares and convertible loan notes ("CLNs") in order to fund the acquisition of Dirty Martini. 19,583,333 new shares were issued at a price of 12 pence per share totalling £2.35 million alongside CLNs totalling £2.65 million.
28. EQUITY
The Group's Equity comprises the following:
Called-up share capital
Called-up share capital represents the nominal value of the shares issued.
Share premium account
The share premium account records the amount above the nominal value received for shares sold.
Share based payment reserve
The share option reserve represents the cumulative amounts charged to profit in respect of employee share option arrangements where the scheme has not yet been settled by means of an award of shares to an individual.
Reverse acquisition reserve
The reverse acquisition reserve arose on the share for share exchange between Nightcap plc and London Cocktail Club Limited on 13 January 2021
Retained earning
Retained earnings represents cumulative profits or losses, net of dividends paid and other adjustments.
Non-controlling interest
Non controlling interest represents the portion of equity ownership in a subsidiary's net assets not attributable to the parent company.
29. ANALYSIS OF CHANGES IN NET DEBT
|
| At 28 June 2021 | Cash flows | Acquisitions | Reclass long term to short term | Non cash movement | At 3 July 2022 |
|
| £'000 | £'000 | £'000 | £'000 | £'000 | £'000 |
| Cash at bank | 13,187 | (10,822) | 2,988 | - | - | 5,353 |
| Bank loans falling due within 1 year | (1,424) | 914 | (277) | (73) | 67 | (793) |
| Bank loans falling due greater than 1 year | (3,256) | - | (1,540) | 73 | - | (4,723) |
| Other loans falling due within 1 year | (35) | 28 | - | - | - | (7) |
| Lease liabilities falling due within 1 year | (1,441) | 1,611 | (421) | (2,124) | - | (2,374) |
| Lease liabilities falling due greater than 1 year | (12,463) | - | (4,845) | 2,124 | (10,070) | (25,254) |
| Total debt | (18,617) | 2,553 | (7,082) | - | (10,003) | (33,150) |
| Net debt | (5,430) | (8,270) | (4,094) | - | (10,003) | (27,797) |
| Net (debt) / cash - pre IFRS 16 leases | 8,473 | (9,881) | 1,171 | - | 67 | (170) |
|
| At 4 July 2022 £'000 | Cash flows £'000 | Acquisitions £'000 | Reclass long term to short term £'000 | Non cash movement £'000 | At 2 July 2023 £'000 |
| Cash at bank | 5,353 | (336) | - | - | - | 5,017 |
| Bank loans falling due within 1 year | (793) | 794 | - | (1,000) | (1) | (1,000) |
| Bank loans falling due greater than 1 year | (4,723) | (4,105) | - | 1,000 | (209) | (8,037) |
| Other loans falling due within 1 year | (7) | 7 | - | - | - | - |
| Other loans falling due greater than 1 year | - | (2,650) | - | - | - | (2,650) |
| Lease liabilities falling due within 1 year | (2,374) | 2,255 | - | (3,162) | - | (3,281) |
| Lease liabilities falling due greater than 1 year | (25,254) | - | - | 3,162 | (12,502) | (34,594) |
| Total debt | (33,150) | (3,699) | - | - | (12,713) | (49,562) |
| Net debt | (27,797) | (4,035) | - | - | (12,713) | (44,545) |
| Net (debt) / cash - pre IFRS 16 leases | (170) | (6,289) | - | - | (211) | (6,670) |
30. PENSION COMMITMENTS
|
| 52 weeks ended 02 July 2023 £'000 | 53 weeks ended 03 July 2022 £'000 |
| Pension cost | 183 | 128 |
The following contributions were payable to the fund and are included in creditors:
|
| 02 July 2023 £'000 | 03 July 2022 £'000 |
| Pension contributions payable | 132 | 44 |
31. RELATED PARTY TRANSACTIONS
Related parties are considered to be the directors and former directors of Nightcap plc, The Cocktail Club, Adventure Bar Group and Barrio Familia Group and substantial shareholders. Transactions with them are detailed below:
|
| 52 weeks ended 02 July 2023 £'000 | 53 weeks ended 03 July 2022 £'000 |
| Purchase of inventories - D&H Spirits Limited | 33 | 85 |
| Purchase of inventories - CGCC Limited | 11 | 41 |
| Consultancy fees - CGCC Limited | 30 | - |
| Consultancy fees - Ferdose Ahmed | 44 | 24 |
| Consultancy fees - James Hopkins | 16 | 24 |
| | 133 | 174 |
The companies listed below are deemed to be related parties due to having common shareholders with the Company. These transactions are split by related party as follows:
|
| 52 weeks ended 02 July 2023 £'000 | 53 weeks ended 03 July 2022 £'000 |
| CGCC Limited - a company controlled by JJ Goodman | 41 | 41 |
| Ferdose Ahmed | 44 | 24 |
| James Hopkins | 16 | 24 |
| D&H Spirits Limited - a company co-controlled by James Hopkins | 33 | 85 |
| | 133 | 174 |
Amounts owed to related parties were as follows:
|
| 02 July 2023 £'000 | 03 July 2022 £'000 |
| James Hopkins | - | 2 |
| | - | 2 |
32. BUSINESS COMBINATIONS
On 9 June 2023, Nightcap plc acquired the trade and assets for certain bars and one restaurant relating to the Dirty Martini business, for a total consideration of up to £4.65m. Nightcap is currently the operator of nine Dirty Martini bars and the Tuttons brasserie restaurant in Covent Garden. There are four Dirty Martini bars located in London with an additional five bars located in Cardiff, Bristol, Birmingham, Leeds and Manchester.
The total consideration of £4.65m comprised cash of £4.15m with an additional £0.5 million due on the successful assignment of the property leases of four key sites, the completion of which was announced on 9 November 2023.
The acquired business contributed revenues of £1,308,000 and loss before tax of £138,000 (in accordance with IFRS) to the consolidated Group for the period from 9 June 2023 to 2 July 2023. As a result of acquiring the trade and certain assets out of administration, the Group is unable to report the pre-acquisition trading results of the business.
|
| Book Value £'000 | Fair Value Adjustments £'000 | Fair Value £'000 |
| Property, plant and equipment | 442 | - | 442 |
| Intangible assets | - | 2,950 | 2,950 |
| Inventories | 345 | - | 345 |
| Receivables | 99 | - | 99 |
| Payables | (525) | - | (525) |
| Provisions | - | (317) | (317) |
| Deferred tax liability | - | (738) | (738) |
| Total net assets acquired | 362 | 1,895 | 2,257 |
| Fair value of consideration paid | | | £'000 |
| - Cash paid to vendor | | | 4,150 |
| - Contingent consideration | | | 500 |
| Acquisition date fair value of the total consideration transferred | | | 4,650 |
| Goodwill (Note 14) | | | 2,393 |
The Group has made certain estimates and judgements in arriving at the valuation of intangible assets and goodwill.
In accordance with IFRS 3, the identifiable assets acquired and liabilities and contingent liabilities assumed should be measured at fair value at the acquisition date in order to determine the difference between the cost of acquisition and the fair value of the Group's share of net assets acquired, which should then be recognised as goodwill on the balance sheet or recognised in the income statement. In determining the fair value, management has recognised brand values totalling £2.95m in respect of the brand acquired. Key estimates used in arriving at the brand valuation include growth rates, discount rate, cashflow assumptions including working capital estimates, appropriate royalty rates and useful economic lives.
The Group has not recognised a right of use asset on acquisition of Dirty Martini as a result of the granting of licenses to trade while the lease assignments where being negotiated with landlords. As noted in the Chief Executive's Report, Nightcap successfully completed the assignments, which was announced on 9 November 2023. As a result, the Group will recognise right of use assets in its next reporting period.
The main factors leading to the recognition of goodwill are:
? The presence of certain intangible assets, such as the assembled workforce of the acquired entity, which do not qualify for separate recognition
? Cost savings and synergies through better buying and enhancing the customer offering, which result in the Group being prepared to pay a premium, and
? The fact that a lower cost of capital is ascribed to the expected future cash flows of the entire operation acquired than might be to individual assets.
Acquisition costs of £734,000 arose as a result of the transaction (Note 11). These have been included as transaction related costs as part of administrative expenses in the statement of comprehensive income.
33. LEGAL ENTITIES
The following table presents the investments in which the Group owns a portion of the nominal value of any class of share capital:
| Direct Subsidiary Holding | % Owned | Nature of Business |
| London Cocktail Club Limited | Ordinary 100% | The development, operation and management of individually themed cocktail bars |
| +Venture Battersea Limited | Ordinary 100% | The development, operation and management of individually themed bars |
| Adventure Bars Mid Limited | Ordinary 100% | The development, operation and management of individually themed bars |
| Adventure Bars Luna Digbeth Limited | Ordinary 100% | The development, operation and management of individually themed bars |
| Barrio Familia Limited | Ordinary 100% | The development, operation and management of individually themed bars |
| DMN Bars Limited | Ordinary 100% | The development, operation and management of individually themed bars |
| Indirect Subsidiary Holding | % Owned | Nature of Business |
| London Cocktail Club Trading Limited | Ordinary 100% | Dormant |
| London Cocktail Events Limited | Ordinary 100% | Dormant |
| The London Cocktail School Limited | Ordinary 100% | Dormant |
| The Craft Cocktail Club Limited | Ordinary 100% | Dormant |
| Adventure Bars Group CHS Limited | Ordinary 100% | The development, operation and management of individually themed bars |
| Adventure Bars Waterloo Limited | Ordinary 100% | The development, operation and management of individually themed bars |
| Waterloo Sunset Limited | Ordinary 50% | The development, operation and management of individually themed bars |
| Barworks (Electric) Limited | Ordinary 100% | The development, operation and management of individually themed bars |
| Adventure Bars Cardiff Limited | Ordinary 100% | Dormant |
| Adventure Bars Bristol Limited | Ordinary 100% | Dormant |
| Adventure Bars Liverpool Limited | Ordinary 100% | Dormant |
| Barrio Central Limited | Ordinary 100% | The development, operation and management of individually themed bars |
| Barrio Bars Limited | Ordinary 100% | The development, operation and management of individually themed bars |
| Barrio East Limited | Ordinary 100% | The development, operation and management of individually themed bars |
| Barrio South Limited | Ordinary 100% | The development, operation and management of individually themed bars |
| Barrio Regio Limited | Ordinary 100% | The development, operation and management of individually themed bars |
34. CONTINGENT LIABILITY
Nightcap plc and DMN Bars Limited, a subsidiary company of Nightcap, have received notification that 18 individuals wish to bring proceedings to an employment tribunal where Nightcap and DMN Bars Limited have been listed as second and third respondents. The nature of their claim is in relation to the acquisition of certain assets of Dirty Martini out of administration where they were not included in the acquisition of those assets. The claimants are alleging to have been employed by DC Bars Limited and that they should have transferred to DMN Bars Limited or Nightcap under the Transfer of Undertakings Protection of Employment rights ("TUPE") regulations. The total amount claimed is £338,000 together with further unquantified amounts. Management has sought legal advice on the matter and management believes that there are no grounds for such claims. Given the uncertainty involved and the strength of legal opinion, no provision has been made in these financial statements as management believes that the most likely outcome is no liability. We have no indication of the likely timescales involved.
35. POST BALANCE SHEET EVENTS NOTE
On 9 November 2023, the Group completed the process of assigning the Dirty Martini leases from the administrator.
When Nightcap acquired certain assets of DC Bars Limited and Tuttons Brasserie Limited, the operator of the 'Dirty Martini' chain of cocktail bars and Tuttons Brasserie, a critical part of the process was securing the assignment of leases for the key sites from the administrator, with the consent from the relevant landlords.
As a result the Group will continue trading in nine of the ten sites. Eight out of ten leases have been assigned on existing terms (only subject to rent reviews) and these assigned leases have expiry dates between 2030 and 2047.
One site has not been assigned. This is the Hanover Square site, where the Group could not agree with the landlord on reduced rental costs to make the site profitable, and therefore no agreement could be reached to keep trading at the site.
The Group has entered into a new three year lease for the Tuttons restaurant and Dirty Martini Covent Garden site. This lease covers a restaurant lease as well as the small downstairs cocktail bar. The new lease is on considerably more favourable commercial terms and is in line with Nightcap's objective to not remain as a restaurant operator in the long term.
RECONCILIATION OF STATUTORY RESULTS TO ALTERNATIVE PERFORMANCE MEASURES ("APMS")
|
| Note | 53 weeks ended 02 July 2023 £'000 | 52 weeks ended 03 July 2022 £'000 |
| (Loss) / profit from operations | | (2,812) | 1,407 |
| Exceptional items | 10 | 792 | 84 |
| Acquisition related transaction costs | 11 | 734 | (866) |
| Pre-opening costs | 12 | 1,013 | 442 |
| Share based payment charge | 7 | 181 | 345 |
| Impairment | 6 | 565 | 143 |
| Adjusted profit from operations | | 473 | 1,555 |
| Depreciation and amortisation (pre IFRS 16 Right of use asset depreciation) | 6 | 3,094 | 2,256 |
| IFRS 16 Right of use asset depreciation | 6 | 3,278 | 2,224 |
| IFRS 16 Right of use asset / liability disposal | 6 | (220) | |
| Adjusted EBITDA (IFRS 16) | | 6,625 | 6,036 |
| IAS 17 Rent charge | | (3,997) | (2,727) |
| Adjusted EBITDA (IAS 17) | | 2,627 | 3,309 |
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