TIDMRIC
RNS Number : 2462N
Richoux Group PLC
15 May 2015
Richoux Group plc
Final results for the 52 weeks ended 28 December 2014
Richoux Group plc, the owner and operator of 17 restaurants
under the Richoux, Dean's Diner, Villagio and Zippers brands, today
announces its final results for the year ended 28 December
2014.
Key points:
-- Turnover increased 10.4% to GBP12.68 million
(2013: GBP11.48 million).
-- Adjusted* EBITDA increased 10.0% to GBP1.63 million
(2013: GBP1.49 million).
-- One new restaurant opened in the year. Five further sites have been secured for 2015/2016.
-- Currently seventeen restaurants trading.
-- Cash of GBP3.95 million at year end
(2013: GBP4.01 million).
* excluding pre opening costs, impairment, and onerous lease
provision.
Philip Shotter, Chairman of Richoux Group plc said:
"I am pleased to report a positive set of results with double
digit percentage increases in turnover and adjusted EBITDA. Trading
so far for the current year has also been positive and in line with
expectations. Although only one restaurant was opened during the
period, we have already contracted to open three new sites this
year with two further sites already contracted for 2016"
15 May 2015
Enquiries:
Richoux Group plc (020) 7483 7000
Philip Shotter, Chairman
Cenkos Securities plc (020) 7397 8900
Bobbie Hilliam
Harry Pardoe
Chairman's Review
Results
Revenue for the 52 week period ended 28 December 2014 increased
10.4 per cent on the 52 week period ended 29 December 2013 to
GBP12,679,000 (2013: GBP11,483,000). Adjusted EBITDA before
pre-opening costs, impairment and onerous lease provision increased
10.0 per cent to GBP1,634,000 (2013: GBP1,486,000). Adjusted
operating profit before pre-opening costs, impairment and onerous
lease provision decreased 3.0 per cent to GBP876,000 (2013:
GBP903,000). Pre-opening costs for the period were GBP35,000 (2013:
GBP159,000). The net profit for the period was GBP420,000 (2013:
GBP740,000).
The Directors are not recommending the payment of a
dividend.
Operations
The Group currently has seventeen restaurants which operate
under the Richoux, Dean's Diner, Villagio and Zippers brands.
Further details on each of the brands are set out below.
Richoux
Richoux is an all day cafe and brasserie established in London
in 1909.
The Group currently has four Richoux restaurants in
Knightsbridge, Mayfair, Piccadilly and St John's Wood. A new
Richoux restaurant is due to open in Gloucester Road in summer
2015.
Dean's Diner
Dean's Diner is a classic 1950's inspired American Diner.
The Group currently has six Dean's Diner restaurants - the
existing restaurants in Chatham, Port Solent, Braintree, Fareham
and Bicester and a new restaurant in Trowbridge which opened in
July 2014. Agreements for lease have been exchanged for new Dean's
Diners in Hempstead Valley which is due to open in June 2015;
Orpington which is due to open before the year end and for Bromley
and Yate which are due to open in 2016.
Villagio Ristorante
Villagio Ristorante is a modern local Italian family restaurant,
delivering a good quality family dining experience.
The Group currently has five Villagio restaurants in Andover,
Basildon, Hammersmith, Chislehurst and Chatham. The Group sold two
underperforming restaurants, one in Chiswick in August 2014 and one
in Berkhamsted in September 2014 and an impairment provision of
GBP0.19 million was made against these two sites.
The Group also has two Italian restaurants trading as Zippers
Bar, Restaurant and Grill one in Chatham and one in Port Solent. An
impairment charge of GBP0.09 million has been made against the
underperforming restaurant in Port Solent.
Cash flow and capital expenditure
At 28 December 2014 the Group held cash of GBP3.95 million
(2013: GBP4.01 million).
Capital expenditure of GBP0.95 million was incurred in the
period; on the fit out of the new restaurant, fees for the
agreements for lease entered into for the new sites due to open in
2015 and 2016, and some replacement equipment in the existing
sites.
Chairman's Review(continued)
Staff
I would like to take the opportunity to thank all our staff for
the continued commitment and enthusiasm they have shown in
2014.
Outlook
There has been a positive start to the current financial year
and the restaurants are trading in line with expectations. We are
pleased to confirm that we will be opening a new Richoux restaurant
next to the Waitrose in the Gloucester Arcade off the Gloucester
Road in London and are looking to build on this with further
Richoux openings in order to exploit the considerable goodwill that
exists in the Richoux brand. We will also be continuing the
measured roll-out of the Dean's Diner concept by opening two
further sites later in 2015 in Orpington and Hempstead Valley,
Kent.
Philip Shotter
Chairman
14 May 2015
Strategic Report
Business review and key performance indicators
Revenue has continued to grow in the year reflecting the trading
performance of our existing sites and the full year benefit of the
restaurants opened in 2013. Adjusted EBITDA has also shown
significant growth, up 10.0 percent on 2013, reflecting the Group's
ability to maintain earnings margins whilst raising top line sales.
As expected, profit after tax is down on the prior year at GBP0.42
million (2013: GBP0.74 million). This decrease largely reflects the
impairment charge incurred in the year of GBP0.28 million, up from
GBP0.03 million in 2013, the onerous lease provision of GBP0.15
million, and the depreciation and amortisation charge incurred in
the year of GBP0.76 million, up from GBP0.58 million in 2013.
The Directors utilise a number of detailed performance
indicators to manage the business. The focus in the Income
Statement is on sales and operating profit compared to budget and
the prior year. In the Statement of Financial Position the focus is
on managing working capital.
The Directors recognise the importance of customer relations and
staff are extensively trained in this regard. Performance is
monitored by reference to results of regular mystery diner visits
and staff bonus calculations take into account these results and
other customer feedback.
Principal uncertainties and risks
Economic conditions
Deterioration in consumer confidence due to future economic
conditions could have a detrimental impact on the Group in terms of
sales and footfall. This risk is mitigated by the positioning the
Group's brands in the affordable casual dining market, constantly
reviewing pricing to ensure it is competitive, and continued focus
on customers with targeted and adaptable marketing.
Cost inflation
The Group's key variable costs are the costs of food and labour
both of which face inflationary pressures in the medium term. The
Group monitors its food supply chain closely, regularly reviewing
food costs and implementing a variety of strategies to mitigate the
impact of price increases. The Group closely monitors labour costs
and uses a number of initiatives to control costs. There are also
labour cost pressures which are outside the control of the Group
such as the recently introduced auto enrolment pension costs and
minimum wage increases which are suffered by both the Group and its
competitors.
Strategic risks
The acquisition of suitable and well located new sites in order
to continue the Group's expansion is proving to be demanding. The
Group has a strong and experienced property acquisition team with
good relationships with external agents and advisers.
Brand development risks
There are a number of inherent risks in developing new brands.
However the Group has a strong team with a proven track record in
developing new brands.
Future development
The Group will continue to acquire new sites, particularly
focusing on its Dean's Diner and Richoux concepts as these are
perceived to offer the greatest scope for development within what
is a congested and evolving restaurant market. The Group will also
consider further Villagio openings if the right sites become
available.
Central to our expansion are our people. Recognising the
importance of staff training and development the Group has
established a training academy and is investing in the operational
team and training for future growth.
On behalf of the Board
Salvatore Diliberto
Director
14 May 2015
Richoux Group plc
Consolidated statement of comprehensive income
for the 52 week period ended 28 December 2014
52 week 52 week
period ended period ended
28 December 2014 29 December 2013
Notes
GBP000 GBP000
Revenue 12,679 11,483
Cost of sales:
------------------ ------------------
Excluding pre-opening costs (11,220) (9,964)
Pre-opening costs (35) (159)
------------------ ------------------
Total cost of sales (11,255) (10,123)
Gross profit 1,424 1,360
Administrative expenses (583) (617)
Other operating income - 1
Operating profit before impairment 841 744
Impairment of intangible assets 6 (6) -
Impairment of property, plant and equipment 7 (274) (32)
Onerous lease provision (150) -
Operating profit 411 712
Finance income 9 30
Finance expense - (2)
Profit before taxation 3 420 740
Taxation - -
Profit and total comprehensive profit for the period 420 740
Profit and total comprehensive profit attributable to equity
holders of the parent 420 740
Profit and total comprehensive profit per share:
Profit per share 4 0.5p 0.8p
Diluted profit per share 4 0.4p 0.8p
Richoux Group plc
Consolidated statement of changes in equity
For the 52 week period ended 28 December 2014
Share premium account Profit and loss account
Share capital
Total
GBP000 GBP000 GBP000 GBP000
At 30 December 2012 3,681 12,242 (8,711) 7,212
Profit for the period - - 740 740
Total comprehensive profit - - 740 740
Credit to equity for equity settled
share based payments - - 41 41
Total contributions by and
distributions to owners of the
Company, recognised directly in
equity - - 41 41
At 29 December 2013 3,681 12,242 (7,930) 7,993
Profit for the period - - 420 420
Total comprehensive profit - - 420 420
Credit to equity for equity settled
share based payments - - 27 27
Total contributions by and
distributions to owners of the
Company, recognised directly in
equity - - 27 27
At 28 December 2014 3,681 12,242 (7,483) 8,440
Richoux Group plc
Consolidated statement of financial position
at 28 December 2014
Notes 28 December 2014 29 December
2013
GBP000 GBP000
Assets
Non-current assets
Goodwill 6 234 234
Other intangible assets 6 72 73
Property, plant and equipment 7 5,953 6,348
Trade and other receivables 40 40
Total non-current assets 6,299 6,695
Current assets
Inventories 198 195
Trade and other receivables 691 666
Cash and cash equivalents 3,947 4,009
Total current assets 4,836 4,870
Total assets 11,135 11,565
Liabilities
Current liabilities
Trade and other payables (2,172) (3,284)
Provisions (150) -
Total current liabilities (2,322) (3,284)
Non-current liabilities
Trade and other payables (373) (288)
Total non-current liabilities (373) (288)
Total liabilities (2,695) (3,572)
Net assets 8,440 7,993
Capital and reserves
Share capital 3,681 3,681
Share premium account 12,242 12,242
Retained earnings (7,483) (7,930)
Total equity 8,440 7,993
Richoux Group plc
Consolidated statement of cash flows
for the 52 week period ended 28 December 2014
Notes 52 week 52 week
period ended period ended
28 December 29 December
2014 2013
GBP000 GBP000
Operating activities
Cash generated from operations 8 1,486 1,944
Interest paid - (2)
Net cash from operating activities 1,486 1,942
Investing activities
Purchase of property, plant and equipment (1,816) (1,987)
Purchase of intangible fixed assets (27) (37)
Cash held on deposit - 2,500
Net proceeds from sale of property, plant and equipment 286 2
Interest received 9 30
Net cash (used in)/from investing activities (1,548) 508
Net (decrease)/increase in cash and cash equivalents (62) 2,450
Cash and cash equivalents at the beginning of the period 4,009 1,559
Cash and cash equivalents at the end of the period 3,947 4,009
Notes
1. The consolidated financial statements have been prepared in
compliance with International Financial Reporting Standards
("IFRS") as adopted by the European Union. The financial statements
have been prepared on the historical cost basis.
2. The financial information set out above does not constitute
the Company's statutory accounts for the periods ended 29 December
2013 or 28 December 2014 but it is derived from those accounts.
Statutory accounts for 29 December 2013 have been delivered to the
Registrar of Companies and those for 28 December 2014 will be
delivered following the Company's Annual General Meeting. The
auditors have reported on those accounts; their reports were
unqualified and did not contain statements under section 498(2) or
(3) of the Companies Act 2006.
3. Business segments
Based on the financial information which is monitored by the
board, which comprises the chief operating decision maker as
defined in IFRS 8, the Group has three reportable business segments
based around its core restaurant brands, Dean's Diner, Villagio and
Zippers and Richoux. From 2014 Villagio and Zippers are reported as
one segment as their menus have now been aligned. All brands are
engaged in the restaurant trade so derive their revenues and
results from similar products and services. There are no
geographical segments and there are no major customers.
Occasionally the Group also receives franchise income, however
this is not considered to be a significant business segment and the
Group has no control over the timing of this income. Franchise
income is reported under other operating income.
The Group sublets part of one and the whole of another of its
leased properties and receives sublease payments from third
parties.
For the 52 week period ended 28 December 2014
Dean's Diner Villagio & Zippers Un-allocated
Richoux Total
GBP000 GBP000 GBP000 GBP000 GBP000
Revenue 3,432 4,879 4,368 - 12,679
Segment profit/(loss) 413 348 879 (216) 1,424
Administrative expenses - - - (583) (583)
Impairment of intangible assets - (6) - - (6)
Impairment of property, plant and equipment - (274) - - (274)
Onerous lease provision - - - (150) (150)
Finance income - - - 9 9
Profit/(loss) before taxation 413 68 879 (940) 420
Non current assets as at 29 December 2013 2,133 3,453 1,011 98 6,695
Additions 681 100 145 26 952
Transfers 10 (10) - - -
Depreciation and amortisation (231) (350) (150) (27) (758)
Impairment of intangible assets - (6) - - (6)
Impairment of property, plant and equipment - (274) - - (274)
Disposals (3) (304) (2) (1) (310)
Non current assets as at 28 December 2014 2,590 2,609 1,004 96 6,299
The unallocated segment loss includes the costs of the
restaurant area management; unallocated administrative expenses
include the costs of the Group's head office.
4. Earnings per share
The calculation of the basic and diluted profit per share is
based on the following data:
28 December 2014 29 December 2013
GBP000 GBP000
Profit
Profit for the purposes of basic profit per share being the net profit
attributable to equity
holders of the parent 420 740
Number of shares
Weighted average number of ordinary shares for the purposes of the basic profit
per share 92,019,612 92,019,612
Effect of dilutive potential ordinary shares:
Share options and warrants 2,564,456 1,546,101
Weighted average number of ordinary shares for the purposes of diluted profit
per share 94,584,068 93,665,713
Share options and warrants not included in the diluted calculations as per the
requirements
of IAS 33 (as they are anti-dilutive) 3,384,547 2,736,652
Basic profit per share:
From total operations 0.5p 0.8p
Diluted profit per share:
From total operations 0.4p 0.8p
5. No dividend is proposed.
6. Intangible fixed assets
Goodwill Trademarks Software Total
GBP000 GBP000 GBP000 GBP000
Cost
At 29 December 2013 269 21 145 435
Additions - 2 25 27
Disposals - - (9) (9)
At 28 December 2014 269 23 161 453
Accumulated amortisation and impairment
At 29 December 2013 35 5 88 128
Charge for the period - 2 20 22
Impairment - - 6 6
Disposal - - (9) (9)
At 28 December 2014 35 7 105 147
Carrying amount
At 28 December 2014 234 16 56 306
At 29 December 2013 234 16 57 307
Impairment testing of goodwill and intangible fixed assets
Goodwill of GBP269,000 (2013: GBP269,000) relates to the
acquisition of Richoux Limited in August 2000 and is allocated to
the group of cash generating units (CGUs) that comprise the
business acquired (as described in note 3) with each restaurant
site being treated as a single CGU.
The Group tests annually for impairment or more frequently if
there are indications that the goodwill and intangible assets may
be impaired. The recoverable amounts of the restaurants are
calculated from value in use calculations based on cash flow
projections from formally approved budgets to December 2015, and
forecasts to December 2019 based on a sales growth rate of 2 per
cent for established sites. The discount rate applied to cash flow
projections is 10 per cent (2013: 12 per cent).
An impairment charge of GBP6,000 has been recognised in relation
to the unrecoverable elements of the assets of two Villagio
restaurants following the decision to dispose of these restaurants
(2013: GBPnil). The value in use of the remaining restaurants is
higher than the carrying value.
7. Property, plant and equipment
Short leasehold land and buildings Fixtures, fittings and equipment
Total
GBP000 GBP000 GBP000
Cost
At 29 December 2013 7,621 3,321 10,942
Additions 575 350 925
Transfers 42 (42) -
Disposals (687) (332) (1,019)
At 28 December 2014 7,551 3,297 10,848
Accumulated depreciation and impairment
At 29 December 2013 3,003 1,591 4,594
Charge for period 321 415 736
Transfers 21 (21) -
Impairment 257 17 274
Disposals (533) (176) (709)
At 28 December 2014 3,069 1,826 4,895
Carrying amount
At 28 December 2014 4,482 1,471 5,953
At 29 December 2013 4,618 1,730 6,348
Impairment testing of property, plant and equipment
The Group considers each trading restaurant to be a
cash-generating unit (CGU) and each CGU is reviewed when there are
indications of impairment.
The recoverable amounts of the restaurants are calculated from
value in use calculations based on cash flow projections from
formally approved budgets to December 2015, and forecasts to
December 2019 based on a sales growth rate of 2 per cent for
established sites. The discount rate applied to cash flow
projections is 10 per cent (2013: 12 per cent).
An impairment charge of GBP274,000 has been recognised
GBP184,000 in relation to the unrecoverable elements of the assets
of two Villagio restaurants following the decision to dispose of
these restaurants, and GBP90,000 in relation to one underperforming
Zippers restaurant (2013: GBP32,000; GBP244,000 was reversed
following the successful rebranding of one restaurant as a Villagio
restaurant in the previous period and a charge of GBP276,000 was
made in relation to two underperforming Villagio restaurants). The
value in use of the remaining restaurants is higher than the
carrying value.
The Board has conducted a sensitivity analysis taking into
consideration the impact on impairment test assumptions where there
is a decrease of 10% on the forecast cash flows. The sensitivity
analysis shows that an additional impairment charge of GBP105,000
would result from this scenario.
8. Reconciliation of operating profit to operating cash flows
52 week 52 week
period ended period ended
28 December 29 December
2014 2013
GBP000 GBP000
Operating profit 411 712
Loss on disposal of property, plant and equipment 24 12
Depreciation charge 736 558
Amortisation charge 22 25
Impairment of intangible fixed assets 6 -
Impairment of property, plant and equipment 274 32
Increase in stocks (3) (39)
Increase in debtors (25) (224)
Increase in creditors 14 827
Equity settled share based payments 27 41
Net cash inflow from operating activities 1,486 1,944
9. Post balance sheet events
On the 19 January 2015 the Group entered into an agreement for a
new twenty five year lease for a new restaurant in Gloucester Road,
London at a rent of GBP160,000 per annum and on 24 March 2015 the
Group entered into an agreement for an adjoining unit at a rent of
GBP23,000 per annum. On the 25 March 2015 the Group took possession
of the new unit in Hempstead Valley pursuant to the agreement for
lease entered into on 30 October 2014. On the 13 May 2015 the Group
entered into an agreement for a twenty five year lease for a new
restaurant in Orpington, Kent at a rent of GBP55,000 per annum. On
10 April 2015 the Group entered into an agreement to take a
reassignment of the lease of its former High Wycombe restaurant
where it retained liability under an authorised guarantee
agreement. This was completed on the 20 April 2015. The Board is
currently considering options for this restaurant.
10. Related party transactions
During the period the Group paid professional fees for legal
services of GBP50,000 (2013: GBP62,000) to Glovers Solicitors LLP
of which Philip Shotter is a member. As at the end of the period
GBPnil (2013: GBP7,000) was outstanding. This is in addition to
fees included as Director's emoluments.
The Group has a group VAT registration and the representative
Company, Richoux Group plc, pays the net VAT for the Group.
The Group has a group insurance policy which is paid by Richoux
Group plc.
Transactions with Directors
Directors' emoluments
2014 GBP2013
GBP000 GBP000
Short term employee benefits 273 272
Share based payments 14 26
287 298
Transactions with substantial shareholders
During the period the Group paid GBPnil (2013: GBP14,000) to
Prezzo plc, a Company in which Phillip Kaye was a shareholder, for
fixtures, fittings and equipment.
11. Report and accounts
Copies of the annual report and accounts will be posted to the
shareholders shortly and will be available at
www.richouxgroup.co.uk.
- ENDS -
This information is provided by RNS
The company news service from the London Stock Exchange
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