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The Fulham Shore PLC

Unaudited interim results for the six months ended 24 September 2017

Chairman's statement

Introduction

I am pleased to announce the unaudited interim results for the six months ended 24 September 2017 for The Fulham Shore PLC ("Fulham Shore" or the "Group"). It has been another busy six months for the Group, during which we have continued to make progress in delivering our growth strategy and we have produced a resilient set of financial results despite a challenging market backdrop.

Revenue grew to £27.5m from £19.5m for the same period last year while Headline EBITDA* increased to £4.5m (2016: £3.8m). Profit for the period was £0.6m (2016: £0.5m).

Strategic progress

The Group's growth has been driven primarily by new restaurant openings. During the six months ended 24 September 2017, the Group opened three The Real Greek restaurants, seven Franco Manca pizzerias in the UK and one Franco Manca franchise pizzeria in Salina, Italy. In line with the Group's expansion strategy, these openings included a number of locations outside London, including Bournemouth and Reading.

In September 2017, the Group announced in its AGM statement and trading update that it had taken the decision to simplify operations and focus on the Group's core brands by selling its business and property at D'Arblay Street, Soho. Discussions have commenced with suitable parties and as such we have, in the results, impaired the asset by some £0.3m and reflected the property as held for sale and a discontinued operation in the interim results.

We have continued to invest in our teams and infrastructure to support our long-term growth plans. During the six months ended 24 September 2017, and as previously indicated, we commenced investing in the central team of The Real Greek as this business begins its national expansion. We also continued to invest in the team we have in place to support the continued expansion of Franco Manca.

Cash flow

During the period ended 24 September 2017, the Group had lower net cash inflow from operating activities of £3.3m (2016: £6.4m) due primarily to the Group benefiting last year from an increase in trade and other payables. During the same period the Group invested £7.0m (2016: £6.0m), the majority of which was in new restaurant openings. Included in investing activities is a minority equity investment of £200,000 by Franco Manca in Made of Dough, a new pizza concept, as part of Franco Manca's pursuit of best in class pizza operations.

Overall there was a net cash inflow for the period of £0.8m (2016: £1.1m). At the beginning of the current financial year, the Group increased its facilities with HSBC Bank PLC from £6.5m to £15m. Net debt as at 24 September 2017 was £9.7m (2016: £3.0m).

Dividends

No dividend is being proposed by the Board. It remains the Board's policy that, subject to the availability of distributable reserves, dividends will be paid to shareholders when the Directors believe it is appropriate and prudent to do so.

Current trading and outlook

Since 24 September 2017 the Group has opened one The Real Greek restaurant in Bristol and two Franco Manca pizzerias in Kings Cross (London) and Bristol. This takes the number of restaurants operated today by the Group to a total of 58 in the UK, made up of 16 The Real Greek, 41 Franco Manca and one Bukowski Grill. We expect to open a further one or two new restaurants by the end of the current financial year to 25 March 2018.

Some of our planned openings this year have been delayed by as much as six months as we seek better deals from landlords thus protracting lease negotiations. These delays have had the beneficial side-effect of improving our cash position and lessening our peak borrowings. We will keep under review our opening programme for the rest of the current and following financial years. We intend that our new restaurants will be selected to give us an average return on capital at the higher end of the scale previously recorded. We will achieve this with more rigorous site selection and increased contributions from landlords thereby lowering our costs, in cash terms, for new sites while at the same time negotiating rents off the lower levels which are increasingly evident. We also intend to commit to sites which follow our returns requirement rather than to sign up purely to fill a formulaic pipeline.

As indicated in September 2017, the summer should have been one of the busiest periods of our financial year and the weak trading across the dining out market that we also experienced has impacted this year's overall performance. Some of our pre-2017 restaurants, particularly in the London suburbs, are still experiencing revenue below the equivalent period a year earlier with increased volatility and some expected cannibalisation from our new restaurants in nearby locations. However, revenue from these restaurants have seen slight improvements from the poor summer period of July to September.

Although we believe our half year figures to 24 September 2017 were satisfactory, our full year Headline EBITDA* to 25 March 2018 will depend on how our suburban estate performs in the second half of the year and also on the timing and performance of new openings.

The slowdown in the UK retail and restaurant sector has been noted by many commentators, and is, we believe, the result principally of rising inflation, poor consumer confidence and a weakening economy. These factors, together with a number of rising costs, means that our pre-2017 estate, while profitable, is contributing less, on an average site by site basis, than last year. We will respond to the economic climate in the next 24 months as we find it, as we believe these factors will continue to affect the restaurant sector in the coming years, limiting our visibility for the second half and beyond.

Despite this challenging backdrop I am confident that Fulham Shore is well placed; we have an experienced management team, who have navigated through several industry cycles, two strong brands that are renowned for their great quality, ambience and value, and a good site portfolio. We believe that our brands have significant customer appeal which is underpinned by the food quality and value of their offerings. As a result, and despite the challenging backdrop, we are confident that the Group will continue to grow over the coming years.

David Page

Chairman

15 December 2017

* Definition of Headline EBITDA can be found in note 3 to the unaudited interim financial information.

Contacts:

Notes for editors

Information on The Fulham Shore plc

Fulham Shore was incorporated in March 2012. The Directors believed that there were attractive investment opportunities within the restaurant sector in the UK and that, given their collective experience in the restaurant sector, they could take advantage of the opportunities which existed.

The ordinary shares of the Company were admitted to trading on AIM in October 2014 in order to capitalise on such opportunities and to give the company employees, customers and public the ability to share in the enterprise.

Today, Fulham Shore owns and operates "The Real Greek" (www.therealgreek.com) and "Franco Manca" (www.francomanca.co.uk) restaurants.

The Real Greek

Since its foundation in London in 1999, The Real Greek group has grown steadily, now offering modern Greek cuisine in 16 restaurants across London and Southern England.

The company is an ambassador of Greek food and Greek hospitality in the UK. The Real Greek food centres on the delicious, healthy diet of the Eastern Mediterranean, staying true to the Greek ethos of food, family and friends. Dishes are created using premium ingredients sourced from Greece and Cyprus whenever possible, and developed by Tonia Buxton, the face of Greek food in the UK.

The Real Greek's menu and atmosphere retain the spirit of eating in Greece, encouraging diners to take their time eating amongst friends and family, be it a relaxed dinner, family get-together, or a fully catered party.

Franco Manca

Franco Manca opened its first restaurant in 2008 and now has 41 restaurants, primarily in London, but with recent openings in Bournemouth, Reading, Oxford and Bristol. Other locations outside London are in the opening pipeline for the next 12 months. Franco Manca also has a franchised pizzeria on the island of Salina in Italy.

Franco Manca's pizza is made from slow-rising sourdough and is baked in an oven that produces heat of about 500°c (930°F). The slow levitation and blast cooking process lock in the flour's natural aroma and moisture, giving a soft and easily digestible crust. Where possible, locally sourced and organic ingredients are used. Pizza prices start from £4.95.

Winner of the R200 Best Value Restaurant Operator- Over 20 Sites Award 2017

Winner of the CGA Peach Hero and Icon Awards Best Concept award 2016

"Franco Manca is quite possibly the best pizza restaurant to ever exist in London." - Metro (2016)

The Fulham Shore PLC

Unaudited Consolidated Statement of Comprehensive Income

for the six months ended 24 September 2017

There were no other comprehensive income items.

The Fulham Shore PLC

Unaudited Consolidated Balance Sheet

as at 24 September 2017

The Fulham Shore PLC

Unaudited Consolidated Statement of Changes in Equity

for the six months ended 24 September 2017

Six months ended 24 September 2017

Six months ended 25 September 2016

Year ended 26 March 2017

The Fulham Shore PLC

Unaudited Consolidated Cash Flow Statement

for the six months ended 24 September 2017

The Fulham Shore PLC

Notes to the Unaudited Interim Financial Information

for the six months ended 24 September 2017

1. General information

The Fulham Shore PLC is a public limited company incorporated and domiciled in England and Wales. The address of the registered office is 1st Floor, 50-51 Berwick Street, London, W1F 8SJ, United Kingdom. Copies of this Interim Statement may be obtained from the above address or the investor section of the Group's website at http://www.fulhamshore.com.

2. Basis of preparation

The unaudited interim financial information for the six months ended 24 September 2017 has been prepared under the recognition and measurement principles of International Financial Reporting Standards as adopted by the EU ("IFRS") based on the accounting policies consistent with those used in the financial statements for the period ended 26 March 2017, and those to be applied for the year ending 25 March 2018.

The unaudited interim financial information was approved and authorised for issue by the Board on 15 December 2017.

The unaudited interim financial information for the six months ended 24 September 2017 does not constitute statutory accounts within the meaning of section 434 of the Companies Act 2006 and should be read in conjunction with the statutory accounts for the period ended 26 March 2017. Statutory accounts for the period ended 26 March 2017 have been delivered to the Registrar of Companies. The audit report on these statutory accounts was unqualified, did not contain an emphasis of matter paragraph, and did not contain a statement either under section 498(2)-(3) of the Companies Act 2006.

The interim financial statements are presented in Pounds Sterling because that is the currency of the primary economic environment in which the company operates. All values are rounded to the nearest one thousand Pounds (£'000) except when otherwise indicated.

3. Segment information

For management purposes, the Group was organised into two operating divisions during the 6 months ended 24 September 2017. These divisions, The Real Greek and Franco Manca, are the basis on which the Group reports its primary segment information. All other segments include the Fulham Shore head office.

For the six months ended 24 September 2017 (Unaudited)

For the six months ended 25 September 2016 (Unaudited)

For the year ended 26 March 2017 (Audited)

Headline EBITDA is defined as EBITDA before amortisation of brand, impairment of property, plant and equipment, impairment of goodwill and intangible assets, onerous lease costs, restructuring costs, costs of reverse acquisition, cost of acquisition, share based payments, loss on disposal of property, plant and equipment and pre-opening costs.

4. Income Tax Expense

5. Earnings per share

6. Investments

Unlisted equity investments are recorded at fair value where appropriate.

7. Cash and cash equivalents

Bank balances comprise cash held by the Group on a short term basis with maturity of three months or less. The carrying amount of these assets approximates their fair value.

8. Reconciliation of net cash flows from operating activities

9. Discontinued operations

During the period, the Group committed to the disposal of the property and business of the Bukowski franchise at D'Arblay Street, Soho, London within the next 12 months. A search is underway for a buyer. An impairment loss was recognised on reclassification of the property, plant and equipment as held for sale.

The impairment charge above relates to the impairment of the property, plant and equipment for the D'Arblay Street restaurant business. The Group expect the fair value (estimated based on the recent market prices of similar properties in similar locations and initial offers from potential buyers) less costs to be approximately £213,000. There are no liabilities expected to be held for sale.