PBR Prem. Bar & Res

 

TIDMPBR 
 
RNS Number : 6045R 
Premium Bars & Restaurants PLC 
01 May 2009 
 

Premium Bars and Restaurants plc 
Filing of Audited Accounts for the year ended 30th June 2008 
 
 
 
 
Premium Bars and Restaurants plc ('the Group') the bar, restaurant and nightclub 
operator, today announces that it has released its audited accounts for the year 
ended 30th June 2008. The Group issued its preliminary results on the 9th 
October 2008. 
 
 
The accounts are available on the Group's website, and include an updated 
Chairman's statement reflecting the latest position with its lenders as 
announced on the 3rd April 2009. The revised Chairman's statement is shown 
below: 
 
 
 
 
For further information please contact 
Premium Bars and Restaurants plc 
Charles Williamson  Executive Director 
                     0161 927 5020 
Wayne Arthur  Group Finance Director                             0161 927 5020 
Financial Dynamics 
Ben Foster/ Marc Cohen 
         020 7831 3113 
KBC/Peel Hunt (Nominated Advisor and Broker) 
Capel Irwin/Matt Goode 
                               020 7418 8900 
 
 
 
 
CHAIRMAN'S STATEMENT 
 
 
The year ended 30th June 2008 saw increased sales driven by the acquisition of 
the Bel and the Dragon and The Living Room brands and the addition of two new 
sites at St Katharine's Dock (Prohibition Bar and Grill) and Milton Keynes (The 
Living Room). 
 
 
During the year under review and as has been well chronicled, the macro-economic 
environment was very challenging and the Group experienced significant increases 
in costs, not least from utility suppliers. 
 
 
After satisfactory Christmas trading in 2007 and a strong first half period 
overall, the industry experienced much tougher trading in the second half of the 
financial year and particularly after Easter. Group like for like sales for the 
year were -5% with the decline driven by drink and door income partly offset by 
a better performance from food and accommodation sales. The acquisition of Bel 
and the Dragon and The Living Room brands during that year was mainly 
responsible for the growth in food sales. Group food sales were GBP16.1m versus 
just GBP2.1m in the prior year. Food sales now represent over 24% of total sales 
and this growth has partly mitigated the decline in drink sales elsewhere in our 
business. 
 
 
Despite significant cost pressure drinks and food margins showed improvement in 
the year due to the increased buying power of the enlarged Group. 
 
 
Since 30th June 2008 and the date at which these accounts have been approved the 
economic environment has worsened substantially. As a result of this the Group, 
in line with the industry as a whole, has experienced an increasingly 
challenging operating environment which has resulted in a decline in the trading 
performance. 
 
 
On 30th December 2008 the PBR's shares were suspended from trading on the 
Alternative Investments Market. 
 
 
 
 
Financial results 
 
 
Group revenue for the year ending 30th June 2008 increased by 80% to GBP66.0m 
(2007: GBP36.7m) driven by the acquisition of The Living Room and Bel and the 
Dragon. Loss before tax excluding non-recurring costs was GBP0.9m (2007:loss of 
GBP0.2m). EBITDA before non recurring costs* was GBP5.2m (2007: GBP4.2m). The 
loss before tax of GBP21.4m (GBP2.6m loss in 2007) included GBP20.5m of 
non-recurring costs (2007: GBP2.5m). 
 
 
Unit EBITDA increased by 43% to GBP9.9m (2007: GBP6.9m). The GBP9.9m was diluted 
by a GBP1.1m loss from seven units which are currently under consideration for 
sale. 
 
 
The impact of food cost price and liquor duty increases have been well 
documented in the sector. Despite these increases the Group managed to grow both 
its food and drink margins. Drinks margins have increased to 74.5% (+0.5%) 
through pricing and buying synergies of the enlarged estate. Food margin has 
grown by 10.9% to 68.6% driven by higher volumes and premium offerings in both 
The Living Room and Bel and the Dragon. We anticipate food cost price increases 
to continue to exert pressure on our margins; however we are well positioned to 
mitigate this through regular menu development. 
 
 
As part of the ongoing strategy to improve the overall quality of the estate, 
three sites were sold during the year and a further seven identified for 
disposal. Despite the current difficulties being experienced by the property 
market, one of these sites is under offer. The carrying value of these seven 
sites has been impaired by GBP6.7m at 30th June 2008 to reflect current market 
values. Exceptional costs include a large non-cash impairment charge following a 
review of the freehold property portfolio, resulting in an impairment charge of 
GBP14.0m (GBP17.8m including the leasehold estate). There was a further GBP1.1m 
impairment charge against the goodwill arising on the acquisition of 
Prohibition. Liverpool Prohibition has been closed, and a GBP0.5m onerous lease 
provision charged to the income statement, as the site has been out positioned 
by a new GBP920m shopping complex in the City. 
 
 
Other exceptional items include GBP0.7m of restructuring costs relating to the 
exit from the Newcastle office, which is resulting in cost savings being made 
during 2009. There was also a GBP0.3m charge for the loss on disposal of Yel, 
Kiss and Blu Bambu (Derby) which achieved net sale proceeds of GBP1.6m. 
 
 
Two new sites were developed during 2008, the Living Room Milton Keynes and 
Prohibition St Katherine's Dock London for a cost of GBP2.8m. A further GBP3m 
capex was spent on refurbishments and replacement equipment across the estate. 
This figure will be significantly lower during 2009. 
 
 
[*non recurring costs include an impairment charge, exceptional items, 
reorganisation costs and loss on disposal of assets]. 
 
 
Going concern 
 
 
The Group commenced discussions with its bankers during mid 2008 in order to 
renew its existing term and revolving credit facilities, consisting of a 
GBP41.0m revolving credit facility and a GBP5.5m capex facility (the "bank 
loans"), and to procure additional funding to meet its ongoing cash 
requirements. On 3rd April 2009 the directors agreed with the banks that funding 
of GBP2.5m would be made available through the use of a drawdown against the 
Group's capex facility under the bank loans. This additional funding was made 
available for a period of 12 weeks on condition that the Group embarked on an 
accelerated disposal process whereby the Group's business will be marketed with 
the intention of a sale of the business or some or all of the Group's assets. 
The Group entered into an amended loan facility agreement with its banks which, 
amongst other things, revised the maturity date of all bank facilities, 
including the bank loans and overdraft, to 26th June 2009. On this date the bank 
loans and the overdraft are repayable in full. 
 
 
Whilst the Directors have no commitment of continuing support from its banks, or 
agreement to a renewal of facilities beyond 26th June 2009, they continue to 
explore all realistic alternatives for the Group and the Company. In the event 
that a solution involving the sale of part or all of the Group's business and/or 
assets cannot be achieved on suitable terms, the Board has appointed advisors to 
assist the Directors in determining the best option, or a combination of 
options, to secure and maximise the value in the Group and the Company, 
including exploring the possibility of funding beyond 26th June 2009. 
 
 
The Group's bankers, on the basis set out above, remain supportive of the Group. 
The Directors have included in note 1 to these financial statements a further 
summary of the above position and the reasons why they continue to adopt the 
going concern basis in preparing the accounts. 
 
 
Dividends 
 
 
The Board has decided not to declare a final dividend for the year. 
 
 
People 
 
 
I would like to thank all of our employees for the contribution they have made 
to the Company over the last year. 
 
 
Mark Jones (Executive Chairman), tendered his resignation to the Board and left 
the Company in October 2008. I have temporarily replaced Mark having been a Non 
Executive Director of the Company for the last 4 years until a permanent 
replacement has been recruited. 
 
 
Craig Bell, (Finance Director), resigned from the Company and has been replaced 
by Wayne Arthur.  Wayne joined the Board from the Barracuda Group where he was 
Head of Finance. Previously he held a number of senior financial roles at 
Whitbread plc and The Laurel Pub Co. 
 
 
In the year under review Jacob Lyons, Alka Bali and K.C.Wong all Non Executive 
Directors resigned from the board. Patrick O'Driscoll joined the Board during 
this period. Additionally, since the year end, Anthony Kelly, Group Managing 
Director for Northern Racing Limited has joined the board as a Non Executive 
Director. 
 
 
Property and disposals 
 
 
The Group continues to actively churn the estate and disposed of three late 
night bars and nightclubs in the year. In addition two freehold nightclubs in 
Mansfield and Cork were leased to local operators. There are also a further 
seven sites being actively marketed for sale. These businesses are currently 
loss making, some are closed, and they impacted profit by GBP1.3m during 2008. 
 
 
The Group also owns the freehold of the Newcastle head office which is currently 
being marketed for sale or lease. 
 
 
 
 
 
 
Current trading and outlook 
 
 
The Group expects trading for the remainder of the 2008/2009 financial year to 
remain very challenging. 
Overall Group sales for the 39 week period from 1st July 2008 are 5.5% behind 
the prior year, impacted in the main by the economic slowdown. 
 
 
The Group will be concentrating on ensuring operational efficiencies and 
overhead costs are managed and that capital expenditure will be kept to an 
essential minimum over the remaining part of the year. 
The focus on meeting our customer's expectations and efficiently managing our 
business will continue, but because of the challenging trading conditions, we 
remain cautious about the prospects for the coming financial year. 
 
 
 
 
C Williamson    30th April 2009 
Chairman 
 
 
 
This information is provided by RNS 
            The company news service from the London Stock Exchange 
   END 
 
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