Richoux Group Regulatory News (RIC)

Richoux Group plc

Interim results for the 28 weeks ended 10 July 2016

Richoux Group plc (the "Group"), the owner and operator of Richoux, Dean's Diner and Villagio restaurants today announces its unaudited interim results for the 28 week period ending 10 July 2016.

Key points: 

(2015: £6.70 million). 

(2015: £0.79 million). 

(2015: profit £0.32 million). 

(December 2015: £4.40 million).

 * Excluding pre opening costs and impairment.

Philip Shotter, Chairman of Richoux Group plc said:

"In line with a number of other restaurant groups, trading conditions have been difficult during the period as we continue to face the challenge of increased competition at a number of sites as well as increased property and staff costs, the latter due largely to the impact of the living wage. We are pleased to have opened two further Dean's Diner restaurants and one further Villagio restaurant, although handover of what will be the tenth Dean's Diner site has been delayed until 2017 due to delays on the part of the developer. A decision has also been made to recognise impairment charges against three sites which are underperforming"

This announcement contains inside information.

Results

Revenue for the 28 week period ended 10 July 2016 increased 5.7% on the 28 week period ended 12 July 2015 to £7.08 million (2015: £6.70 million). Adjusted EBITDA before pre-opening costs and impairment decreased to £0.28 million (2015: £0.79 million). Adjusted operating loss before pre-opening costs and impairment decreased to £0.15 million (2015: profit £0.39 million). Pre-opening costs for the period were £0.09 million (2015: £0.08 million). The net loss for the period was £0.58 million (2015: profit £0.32 million).

The Directors are not recommending the payment of a dividend.

Operations

The Group currently has twenty-three operating 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 has five Richoux restaurants in Central London - in Knightsbridge, Mayfair, Piccadilly, St John's Wood and Gloucester Arcade.

Dean's Diner

Dean's Diner is a classic 1950s American Diner.

The Group currently has nine Dean's Diner restaurants - the existing restaurants in Chatham, Port Solent, Braintree, Fareham, Bicester, Trowbridge and Hempstead Valley and new restaurants in Orpington; which opened in February 2016 and Yate; which opened in May 2016. An agreement for lease has been exchanged for a new Dean's Diners in Bromley which is due to open in late 2017. An impairment charge of £0.29 million has been made against the restaurants in Bicester and Trowbridge.

Villagio

Villagio is a modern local Italian family restaurant, delivering a good quality value family dining experience.

The Group currently has eight Villagio restaurants in Andover, Basildon, Hammersmith, Chislehurst, Port Solent, Chatham and High Wycombe and a new restaurant in Canterbury; which opened in July 2016. An impairment charge of £0.06 million has been made against the restaurant in Chislehurst.

The Group also has one Italian restaurant trading as Zippers Bar, Restaurant and Grill in Chatham.

Capital expenditure and cash flow

As at the end of the period under review the Group held cash of £3.09 million (December 2015: £4.40 million).

Capital expenditure of £1.71 million was incurred in the period; on the fit out of the new restaurants and some replacement equipment in the existing sites.

Outlook

The Group will be focusing on improving performance of the three principal trading formats at existing sites but will continue to evaluate new sites for further acquisitions as and when suitable opportunities present themselves.

Philip Shotter

Chairman

8 September 2016

Richoux Group plc

Condensed consolidated statement of comprehensive income

for the 28 week period ended 10 July 2016

Condensed consolidated statement of changes in equity

For the 28 week period ended 10 July 2016

Condensed consolidated statement of financial position

at 10 July 2016

Condensed consolidated statement of cash flows

for the 28 week period ended 10 July 2016

1. The consolidated financial statements have been prepared in compliance with International Financial Reporting Standards ("IFRS") as adopted by the European Union and therefore the Group financial statements comply with Article 4 of the EU IAS Regulation. The financial statements have been prepared on the historical cost basis.

2. The condensed financial information for the 28 week period ended 10 July 2016 and the 28 week period ended 12 July 2015 has been prepared in accordance with IAS 34 "Interim financial reporting" and should be read in conjunction with the annual financial statements for the period ended 27 December 2015 which have been prepared in accordance with International Financial Reporting Standards as adopted by the European Union. The accounting policies used in preparing the condensed financial information are consistent with those of the annual financial statements for the period ended 27 December 2015. During the period various Standards and Interpretations were adopted in line with the effective dates as outlined in the annual financial statements for the period ended 27 December 2015. The condensed financial information for the 28 week period ended 10 July 2016 and the 28 week period ended 12 July 2015 has not been audited or reviewed and does not constitute full financial statements within the meaning of section 435 of the Companies Act 2006.

The financial information for the 52 week period ended 27 December 2015 does not constitute the Group's statutory accounts for that period but it is derived from those accounts. Statutory accounts for the 52 week period ended 27 December 2015 have been delivered to the Registrar of Companies. The auditors have reported on these accounts; their report was 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.

For the 28 week period ended 10 July 2016

The unallocated segment loss includes the cost of the restaurant area management, and the unallocated administrative expenses include the costs of the Group's head office.

4. (Loss)/profit per share

The calculation of the basic and diluted (loss)/profit per share is based on the following data:

5. No dividend is proposed.

6. Intangible fixed assets

Impairment testing of goodwill and intangible fixed assets

Goodwill of £269,000 (2015: £269,000) 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 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 forecasts to December 2021 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.

No impairment provision is required (December 2015: £1,000).

7. Property, plant and equipment

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 forecasts to December 2021 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.

An impairment charge of £352,000 has been recognised in relation to the irrecoverable elements of the assets of two Dean's Diner restaurants and one Villagio restaurant (December 2015: £526,000).

8. Reconciliation of operating (loss)/profit to operating cash flows

9. Related party transactions

During the period the Group paid professional fees for legal services in connection with properties of £20,000 (July 2015: £32,000, December 2015: £45,000) to Glovers Solicitors LLP of which Philip Shotter is a member. As at the end of the period £nil was outstanding (December 2015: £5,000). This is in addition to fees included in Directors' emoluments.

Transactions with directors:

Directors' emoluments

10. Report and accounts

Copies of the interim report and accounts will be posted to the shareholders shortly and will be available at www.richouxgroup.co.uk.

- ENDS -