TIDMRIC
RNS Number : 8499U
Richoux Group PLC
12 April 2016
Richoux Group plc
Final results for the 52 weeks ended 27 December 2015
Richoux Group plc, the owner and operator of 21 restaurants
under the Richoux, Dean's Diner and Villagio brands, today
announces its audited final results for the year ended 27 December
2015.
Key points:
-- Turnover increased 2.7% to GBP13.03 million
(2014: GBP12.68 million).
-- Adjusted* EBITDA increased 0.4% to GBP1.64 million
(2014: GBP1.63 million).
-- Three new restaurants opened in the year. Three further sites
have been secured for 2016, one of which opened in February
2016.
-- Currently twenty-one restaurants trading.
-- Cash of GBP4.40 million at year end
(2014: GBP3.95 million).
* excluding pre opening costs, impairment, and onerous lease
provision.
Philip Shotter, Chairman of Richoux Group plc said:
"This solid set of results, which show a marginal increase in
EBITDA, reflect the on-going development of the Group. Three
restaurants opened during the period with an additional restaurant
already open now this year; two further sites to open during the
coming year, and another site secured for 2017, with all of these
restaurants being funded from the Group's cash flow and significant
cash reserves".
12 April 2016
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 27 December 2015 increased
2.7 per cent on the 52 week period ended 28 December 2014 to
GBP13,027,000 (2014: GBP12,679,000). Adjusted EBITDA before
pre-opening costs, impairment and onerous lease provision increased
0.4 per cent to GBP1,641,000 (2014: GBP1,634,000). Adjusted
operating profit before pre-opening costs, impairment and onerous
lease provision increased 4.1 per cent to GBP912,000 (2014:
GBP876,000). Pre-opening costs for the period were GBP181,000
(2014: GBP35,000). The net profit for the period was GBP365,000
(2014: GBP420,000).
The Directors are not recommending the payment of a
dividend.
Operations
The Group currently has twenty-one restaurants which operate
under the Richoux, Dean's Diner, and Villagio 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 five Richoux restaurants in
Knightsbridge, Mayfair, Piccadilly and St John's Wood and a new
restaurant in Gloucester Arcade off Gloucester Road in London which
opened in August 2015.
Dean's Diner
Dean's Diner is a classic 1950's inspired American Diner.
The Group currently has eight Dean's Diner restaurants - the
existing restaurants in Chatham, Port Solent, Braintree, Fareham,
Bicester, Trowbridge and new restaurants in Hempstead Valley; which
opened in June 2015 and Orpington; which opened in February 2016.
The Group took possession of the new Dean's Diner in Yate on 21
March 2016 and this is due to open in May 2016 and an agreement for
lease has been exchanged for a new Dean's Diner in Bromley; which
is due to open in 2017. An impairment charge of GBP0.26 million has
been made against the restaurants in Bicester and Trowbridge.
Villagio Ristorante
Villagio Ristorante is a modern local Italian family restaurant,
delivering a good quality family dining experience.
The Group currently has seven Villagio restaurants in Andover,
Basildon, Hammersmith, Chislehurst, Chatham, the rebranded
restaurant in Port Solent and a new restaurant in High Wycombe;
which opened in December 2015. The Group has also entered into an
agreement to take a lease for a new Villagio restaurant in
Canterbury which is due to open in May 2016. An impairment charge
of GBP0.06 million has been made against the restaurant in Port
Solent and GBP0.21 million has been made against the restaurant in
High Wycombe, which the Group had to take a reassignment of
pursuant to an authorised guarantee agreement entered into when the
Group assigned its lease in 2012.
The Group also has one Italian restaurant trading as Zippers
Bar, Restaurant and Grill in Chatham following the rebranding
during the period of the Zippers restaurant in Port Solent as a
Villagio restaurant.
Cash flow and capital expenditure
At 27 December 2015 the Group held cash of GBP4.40 million
(2014: GBP3.95 million).
Capital expenditure of GBP1.69 million was incurred in the
period; on the fit out of the new restaurants, fees for the
agreements for lease entered into for the new sites due to open in
2016, and some replacement equipment in the existing sites.
Staff
I would like to take the opportunity to thank all our staff for
the continued commitment and enthusiasm they have shown in
2015.
Outlook
The Group is well placed to continue its development this year.
One site has already opened and two further sites have been
secured, for openings during the year which, with another site
already secured for 2017, will push the Group's number of sites
close to the 25 mark. The increased cash reserves of GBP4.40
million means that the Group is well placed to fund not only these
openings but also a number of other restaurants, once appropriate
sites have been identified.
Philip Shotter
Chairman
11 April 2016
Strategic Report
Business review and key performance indicators
Revenue has continued to grow and adjusted EBITDA has been
maintained at GBP1.64 million (2014: GBP1.63 million). As expected,
profit after tax is down on the prior year at GBP0.37 million
(2014: GBP0.42 million). This decrease largely reflects the
impairment charge incurred in the year of GBP0.53 million, up from
GBP0.28 million in 2014, the reversal of the onerous lease
provision of GBP0.15 million, and pre-opening costs of GBP0.18
million, up from GBP0.04 million in 2014.
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. There is also
uncertainty surrounding the forthcoming EU referendum in June
2016.
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 living wage 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 an evolving and increasingly congested 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
11 April 2016
Richoux Group plc
Consolidated statement of comprehensive income
for the 52 week period ended 27 December 2015
52 week 52 week
period ended period ended
27 December 2015 28 December 2014
Notes
GBP000 GBP000
Revenue 13,027 12,679
Cost of sales:
------------------ ------------------
Excluding pre-opening costs (11,612) (11,220)
Pre-opening costs (181) (35)
------------------ ------------------
(MORE TO FOLLOW) Dow Jones Newswires
April 12, 2016 02:00 ET (06:00 GMT)
Total cost of sales (11,793) (11,255)
Gross profit 1,234 1,424
Administrative expenses (506) (583)
Other operating income 3 -
Operating profit before impairment 731 841
Impairment of intangible assets 6 (1) (6)
Impairment of property, plant and equipment 7 (526) (274)
Onerous lease provision 150 (150)
Operating profit 354 411
Finance income 11 9
Profit before taxation 3 365 420
Taxation - -
Profit and total comprehensive profit for the period 365 420
Profit and total comprehensive profit attributable to equity
holders of the parent 365 420
Profit and total comprehensive profit per share:
Profit per share 4 0.4p 0.5p
Diluted profit per share 4 0.4p 0.4p
Richoux Group plc
Consolidated statement of changes in equity
For the 52 week period ended 27 December 2015
Share premium account Profit and loss account
Share capital
Total
GBP000 GBP000 GBP000 GBP000
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 owners of the
Company, recognised directly in equity - - 27 27
At 28 December 2014 3,681 12,242 (7,483) 8,440
Profit for the period - - 365 365
Total comprehensive profit - - 365 365
Credit to equity for equity settled
share based payments - - 46 46
New share capital subscribed 3 7 - 10
Total contributions by owners of the
Company, recognised directly in equity 3 7 46 56
At 27 December 2015 3,684 12,249 (7,072) 8,861
Richoux Group plc
Consolidated statement of financial position
at 27 December 2015
Notes 2015 2014
GBP000 GBP000
Assets
Non-current assets
Goodwill 6 234 234
Other intangible assets 6 70 72
Property, plant and equipment 7 6,367 5,953
Trade and other receivables - 40
Total non-current assets 6,671 6,299
Current assets
Inventories 215 198
Trade and other receivables 893 691
Cash and cash equivalents 4,402 3,947
Total current assets 5,510 4,836
Total assets 12,181 11,135
Liabilities
Current liabilities
Trade and other payables (2,894) (2,172)
Provisions - (150)
Total current liabilities (2,894) (2,322)
Non-current liabilities
Trade and other payables (426) (373)
Total non-current liabilities (426) (373)
Total liabilities (3,320) (2,695)
Net assets 8,861 8,440
Capital and reserves
Share capital 3,684 3,681
Share premium account 12,249 12,242
Retained earnings (7,072) (7,483)
Total equity 8,861 8,440
Richoux Group plc
Consolidated statement of cash flows
for the 52 week period ended 27 December 2015
Notes 52 week 52 week
period ended period ended
27 December 28 December
2015 2014
GBP000 GBP000
Operating activities
Cash generated from operations 8 1,767 1,486
Interest paid - -
Net cash from operating activities 1,767 1,486
Investing activities
Purchase of property, plant and equipment (1,307) (1,816)
Purchase of intangible fixed assets (26) (27)
Net proceeds from sale of property, plant and equipment - 286
Interest received 11 9
Net cash (used in)/from investing activities (1,322) (1,548)
Financing activities
Proceeds from issue of ordinary shares 10 -
Net cash from financing activities 10 -
Net increase/(decrease) in cash and cash equivalents 455 (62)
Cash and cash equivalents at the beginning of the period 3,947 4,009
Cash and cash equivalents at the end of the period 4,402 3,947
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 28 December
2014 or 27 December 2015 but it is derived from those accounts.
Statutory accounts for 28 December 2014 have been delivered to the
Registrar of Companies and those for 27 December 2015 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
Richoux. 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 sublet part of one and the whole of another of its
leased properties and receives sublease payments from third
parties.
(MORE TO FOLLOW) Dow Jones Newswires
April 12, 2016 02:00 ET (06:00 GMT)
For the 52 week period ended 27 December 2015
Dean's Diner Un-allocated
Villagio Richoux Total
GBP000 GBP000 GBP000 GBP000 GBP000
Revenue 3,753 4,787 4,487 - 13,027
Segment gross profit/(loss) 217 633 626 (242) 1,234
Administrative expenses - - - (506) (506)
Other operating income - - - 3 3
Impairment of intangible assets - (1) - - (1)
Impairment of property, plant and equipment (257) (269) - - (526)
Onerous lease provision - - - 150 150
Finance income - - - 11 11
(Loss)/profit before taxation (40) 363 626 (584) 365
Non current assets as at 28 December 2014 2,590 2,609 1,004 96 6,299
Additions 619 295 767 10 1,691
Transfers - 3 (3) - -
Depreciation and amortisation (271) (303) (125) (30) (729)
Impairment of intangible assets - (1) - - (1)
Impairment of property, plant and equipment (257) (269) - - (526)
Disposals (3) (15) (3) (2) (23)
Transfer to current assets (40) - - - (40)
Non current assets as at 27 December 2015 2,638 2,319 1,640 74 6,671
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:
27 December 2015 28 December 2014
GBP000 GBP000
Profit
Profit for the purposes of basic profit per share being the net profit
attributable to equity
holders of the parent 365 420
Number of shares
Weighted average number of ordinary shares for the purposes of the basic profit
per share 92,037,661 92,019,612
Effect of dilutive potential ordinary shares:
Share options and warrants 2,042,134 2,564,456
Weighted average number of ordinary shares for the purposes of diluted profit
per share 94,079,795 94,584,068
Share options and warrants not included in the diluted calculations as per the
requirements
of IAS 33 (as they are anti-dilutive) 3,416,869 3,384,547
Basic profit per share:
From total operations 0.4p 0.5p
Diluted profit per share:
From total operations 0.4p 0.4p
5. No dividend is proposed.
6. Intangible fixed assets
Goodwill Trademarks Software Total
GBP000 GBP000 GBP000 GBP000
Cost
At 28 December 2014 269 23 161 453
Additions - 1 25 26
Disposals - - (16) (16)
At 27 December 2015 269 24 170 463
Accumulated amortisation and impairment
At 28 December 2014 35 7 105 147
Charge for the period - 3 19 22
Impairment - - 1 1
Disposal - - (11) (11)
At 27 December 2015 35 10 114 159
Carrying amount
At 27 December 2015 234 14 56 304
At 28 December 2014 234 16 56 306
Impairment testing of goodwill and intangible fixed assets
Goodwill of GBP269,000 (2014: 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 2016, and
forecasts to December 2020 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 (2014: 10 per cent).
An impairment charge of GBP1,000 has been recognised in relation
to the unrecoverable elements of the assets of one Villagio
restaurant (2014: GBP6,000 in relation to the unrecoverable
elements of the assets of two Villagio restaurants following the
decision to dispose of these restaurants). 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 28 December 2014 7,551 3,297 10,848
Additions 1,131 534 1,665
Disposals (17) (88) (105)
At 27 December 2015 8,665 3,743 12,408
Accumulated depreciation and impairment
At 28 December 2014 3,069 1,826 4,895
Charge for period 296 411 707
Impairment 443 83 526
Disposals (17) (70) (87)
At 27 December 2015 3,791 2,250 6,041
Carrying amount
At 27 December 2015 4,874 1,493 6,367
At 28 December 2014 4,482 1,471 5,953
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 2016, and forecasts to
December 2020 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 (2014: 10 per cent).
An impairment charge of GBP526,000 has been recognised
GBP257,000 in relation to the unrecoverable elements of the assets
of two Dean's Diner restaurants, and GBP269,000 in relation to the
unrecoverable elements of the assets of two Villagio restaurants
(2014: GBP274,000; 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). The value in use of the
remaining restaurants is higher than the carrying value.
(MORE TO FOLLOW) Dow Jones Newswires
April 12, 2016 02:00 ET (06:00 GMT)
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 GBP235,000
(2014: GBP105,000) would result from this scenario.
8. Reconciliation of operating profit to operating cash flows
52 week 52 week
period ended period ended
27 December 28 December
2015 2014
GBP000 GBP000
Operating profit 354 411
Loss on disposal of intangible assets 5 -
Loss on disposal of property, plant and equipment 18 24
Depreciation charge 707 736
Amortisation charge 22 22
Impairment of intangible fixed assets 1 6
Impairment of property, plant and equipment 526 274
Increase in stocks (17) (3)
Increase in debtors (162) (25)
Increase in creditors 267 14
Equity settled share based payments 46 27
Net cash inflow from operating activities 1,767 1,486
9. Post balance sheet events
On 21 March 2016 the Group took possession of the new unit in
Yate, Gloucestershire pursuant to the agreement for lease entered
into on 31 October 2014 at a rent of GBP50,000 per annum. On 14
March 2016 the Group entered into an agreement for a new sixteen
year lease for a new restaurant in Canterbury, Kent at a rent of
GBP66,500 per annum for a premium of GBP165,000.
10. Related party transactions
During the period the Group paid professional fees for legal
services of GBP45,000 (2014: GBP50,000) to Glovers Solicitors LLP
of which Philip Shotter is a member. As at the end of the period
GBP5,000 (2014: GBPnil) was outstanding. This is in addition to
fees included as Directors' 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
2015 GBP2014
GBP000 GBP000
Short term employee benefits 280 273
Share based payments 25 14
305 287
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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