Richoux Group Regulatory News (RIC)

28 Mar 2008 07:01

Gourmet Holdings PLC28 March 2008 Gourmet Holdings plcPreliminary results for the 27 weeks ended 30 December 2007 Gourmet Holdings plc, the owner and operator of Richoux restaurants and Amatopasticceria today announces its December 2007 preliminary results. 27 weeks ended 52 weeks ended 30 December 2007 24 June 2007 £m £m Turnover from continuing operations 2.70 4.74Gross profit from continuing operations 0.33 0.71Operating (loss)/profit on continuing operations before impairmentand reorganisation costs (0.00) 0.04Loss attributable to shareholders from continuing and discontinuedoperations (0.47) (2.84) Key points: • Core business remains profitable at restaurant level. • New board aiming to drive the business forward with three to four new sites targeted in 2008. • Purchase of the Amato brand for £0.77 million completed. • Focus on operational improvements. • Cash of £5.54 million at the period end. Neil Blows, Chairman of Gourmet Holdings plc said: "With the raising of additional finance, the acquisition of Amato andoperational improvements in Richoux we are in a strong position to move thebusiness forward. We have an experienced operational team in place to embraceour plans for expansion. A second Amato site has been acquired and we are inadvanced negotiations for a third site together with a central kitchen. Inaddition we have signed a supply agreement for Amato at Heathrow terminal 5. Weare also actively seeking one or more new sites for Richoux. We believe thefoundations are in place to enable the growth of a sound and profitablebusiness." 28th March 2007 Enquiries Gourmet Holdings plcNeil Blows, Chairman (020) 7491 3791 College HillMatthew Smallwood (020) 7457 2020Justine Warren Arbuthnot Securities (020) 7012 2000Paul Vanstone Introduction As announced in November 2007 the Group has changed its accounting referencedate from that last Sunday in June to the last Sunday in December, thus theresults now presented are for the 27 week period ended on 30 December 2007, andthe comparative figures are for the 52 week period ended 24 June 2007. In addition these are the first results of the Group presented under IFRS andthe reconciliations of the Group UK GAAP income statement and balance sheet tothe IFRS income statement and balance sheet are shown in note 7. Results Group turnover from our continuing operations for the 27 week period ended 30December 2007 decreased to £2.70 million (June 2007: £4.74 million) reflectingthe shorter period, and the refocusing of the business on the Richoux business.Gross profit from continuing operations was £0.33 million (June 2007: £0.71million). Administrative expenses for continuing operations (before impairmentand reorganisation costs) of £0.33 million (June 2007: £0.72 million) were inline with expectations. The impairment provision of £0.33 million is in respect of property, plant andequipment of one marginal restaurant, which the Group intends to continueoperating and improve the performance. The £0.29 million for reorganisationcosts are £0.26 million for staff compensation and redundancy costs and £0.03million for costs in respect of the closure of the Head Office in Putney. In October 2007 the Group raised £2.0 million (£1.85 million net of expenses)through a successful placing of new shares at 26 pence per share to fund thegrowth of the Company. The Directors are not recommending the payment of a dividend. Operations Richoux Trading proved difficult in the last quarter of 2007, in line with the sectorgenerally, although sales improved in the last three weeks. We are nowundertaking a planned refurbishment programme. The Richoux franchise operationcurrently forms no part of our key strategic aims as we focus on our UKrestaurant activities. The Group is actively seeking one or more additionalsites for Richoux in 2008. Amato In line with the Group's strategy, in October 2007 the Group acquired the Amatobusiness in Old Compton Street. It has been assimilated into the Group and isperforming to expectations. The Group is seeking to grow the new brand andanticipates acquiring two to three units for Amato in 2008. Head Office In line with the Group's strategic aims to reduce administrative costs,following the disposal of the pub restaurants, the size of the Head Office teamhas been reduced. In addition the offices in Putney have been closed followingthe expiry of the lease and temporarily relocated to the Richoux at Piccadilly. Capital expenditure and cash flow The board continued to tightly manage the cash resources of the Group. As at theend of the period under review the Group held cash of £5.54 million (June 2007:£5.53 million). Capital expenditure of £0.73 million (June 2007: £0.42 million) was incurred inthe period, of which £0.69 was for the acquisition of Amato. People As announced in November 2007 Daniel Rapacioli has been appointed as GroupOperations Director, Daniel was previously a Director of Shirepond Limited,where he was responsible for running Amato. In addition a new operations managerhas been appointed to drive the Richoux business forward. Change of name At its next AGM the Company intends, subject to shareholder approval, to changeits name to Richoux Group plc. Outlook In line with the Group's plans to streamline operational costs, it is inadvanced negotiations to purchase a freehold property that will be fitted out asa central kitchen. On the 7 February 2008 it completed the acquisition of a newleasehold premises in Charlotte Street, London, and this is currently beingfitted out as a new Amato restaurant. In addition, it has signed a supplyagreement for Amato at Heathrow terminal 5. The Group is also in advancednegotiations for another leasehold premises in North London. The Group thereforeanticipates opening three to four new premises in 2008 and continues to look forappropriate sites for both the Richoux and Amato concepts. Neil BlowsChairman Gourmet Holdings plcConsolidated income statementfor the 27 week period ended 30 December 2007 27 week 52 week period ended period ended 30 December 2007 24 June Notes 2007 £'000 £'000 Revenue 2,701 4,739Cost of sales:Excluding pre-opening costs (2,373) (4,006)Pre-opening costs - (28)Total cost of sales (2,373) (4,034) Gross profit 328 705Administrative expenses (334) (724)Other operating income 2 58 Operating (loss)/profit before impairment and (4) 39reorganisation costsImpairment of property, plant and equipment (325) -Reorganisation costs (288) (25) Operating (loss)/profit (617) 14Finance income 145 110Finance expense (2) (406) Loss before taxation (474) (282)Taxation - - Loss for the period from continuing operations (474) (282) Profit/(loss) for the period from discontinued 5 (2,562)operations Loss for the period (469) (2,844) Loss attributable to equity holders of the parent (469) (2,844) Loss per share:From continuing operations:Loss per share 4 (1.3)p (0.8)pDiluted loss per share 4 (1.3)p (0.8)p From continuing and discontinued operations:Loss per share 4 (1.3)p (8.3)pDiluted loss per share 4 (1.3)p (8.3)p Gourmet Holdings plcConsolidated balance sheetat 30 December 2007 30 December 24 June 2007 2007 £'000 £'000Assets Non-current assetsGoodwill 325 269Other intangible assets 79 1Property, plant and equipment 2,221 1,991 Total non-current assets 2,625 2,261 Current assets Inventories 88 69Trade and other receivables 427 458Disposal group assets - 24Cash and cash equivalents 5,535 5,534 Total current assets 6,050 6,085 Total assets 8,675 8,346 LiabilitiesCurrent liabilities Trade and other payables (959) (1,145)Disposal group liabilities - (923) Total liabilities (959) (2,068) Net assets 7,716 6,278 Capital and reservesShare capital 1,681 1,370Share premium account 10,335 8,769Warrants reserve 50 50Retained earnings (4,350) (3,911) Total equity 7,716 6,278 Gourmet Holdings plcConsolidated cash flow statementfor the 27 week period ended 30 December 2007 27 week 52 week period ended period ended 30 December 24 June Notes 2007 2007 £'000 £'000Operating activitiesCash (used in)/generated from operations 6 (1,274) 826Taxation paid - (11)Interest paid (2) (451) Net cash from operating activities (1,276) 364Investing activitiesPurchase of property, plant and equipment (41) (417)Acquisition of trade and assets (686) -Purchase of trade marks (1) (1)Proceeds from sale of property, plant and equipment 8 366Interest received 145 110Disposal of subsidiary undertakings - 8,186Net cash sold with subsidiary - (3) Net cash (used in)/from investing activities (575) 8,241Financing activitiesProceeds from issue of ordinary shares 2,000 8Transaction costs (148) -Repayment of borrowings - (6,079)Capital element of finance lease rentals - (9)Interest element of finance lease rentals - (1) Net cash from/(used in) financing activities 1,852 (6,081) Net increase in cash and cash equivalents 1 2,524Cash and cash equivalents at the beginning of the period 5,534 3,010 Cash and cash equivalents at the end of the period 5,535 5,534 Notes 1. The consolidated financial statements have been prepared in compliancewith International Financial Reporting Standards ("IFRS") as adopted by theEuropean Union and therefore the Group financial statements comply with Article4 of the EU IAS Regulation. The financial statements have been prepared on thehistorical costs basis. Historically the Group has prepared financial statementsunder UK GAAP. The adjustments required on first time adoption of IFRS aredisclosed in note 7 in accordance with IFRS 1 (First Time Adoption of IFRS). 2. The financial information set out above does not constitute theCompany's statutory accounts for the periods ended 24 June 2007 or 30 December2007 but it is derived from those accounts. Statutory accounts for 24 June 2007have been delivered to the Registrar of Companies and those for 30 December 2007will be delivered following the Company's Annual General Meeting. The auditorshave reported on those accounts; their reports were unqualified and did notcontain statements under section 237(2) or (3) of the Companies Act 1985. 3. Reorganisation costs Reorganisation costs of £288,000, comprises £260,000 for staff compensation,redundancy and related costs and £28,000 for costs in respect of the closure ofthe Head Office in Putney. 4. Loss per share The calculation of the basic and diluted loss per share is based on thefollowing data: 30 December 2007 24 June 2007 £000 £000LossLoss from continuing operations for the purpose of basic loss pershare excluding discontinued operations (474) (282)Profit/(loss) from discontinued operations 5 (2,562) Loss for the purposes of basic loss per share being the net profitattributable to equity holders of the parent (469) (2,844) Number of sharesWeighted average number of ordinary shares for the purposes of thebasic loss per share 37,323,118 34,209,687Effect of dilutive potential ordinary shares:Share options and warrants 9,171 21,806 Weighted average number of ordinary shares for the purposes of dilutedloss per share 37,332,289 34,231,493 Share options and warrants not included in the diluted calculations asper the requirements of IAS 33 (as they are anti-dilutive) 2,532,669 494,319 5. No dividend is proposed. 6. Reconciliation of operating loss to operating cash flows 27 week 52 week period ended period ended 30 December 24 June 2007 2007 £'000 £'000 Operating (loss)/profit - continuing (617) 14Operating loss - discontinued (3) (358)Loss on disposal of property, plant and equipment 3 217Depreciation charge 120 423Amortisation charge 2 -Impairment of intangible fixed assets - 5Impairment of tangible fixed assets 325 266(Increase)/decrease in stocks (19) 56Decrease in debtors 65 5(Decrease)/increase in creditors (1,119) 195Equity settled share based payments (31) 3 Net cash (outflow)/inflow from operating activities (1,274) 826 7. Impact of the adoption of International Financial Reporting Standards From the period ending 30 December 2007 the Group has prepared its financialstatements in accordance with IFRS. Below are the reconciliations of the GroupUK GAAP income statement to the IFRS income statement for the period ended 24June 2007 and the UK GAAP balance sheet to the IFRS balance sheet as at 24 June2007. There has been no impact on the Group cash flow statement, other than interms of presentation, from the transition to IFRS. IFRS 3 Business Combinations IFRS 3 prohibits the amortisation of goodwill. The standard requires goodwill tobe carried at cost with impairment reviews both annually and where there areindications that the carrying value may not be recoverable. As permitted by IFRS 1 the Group has chose to apply IFRS 3 from the date oftransition (26 June 2006) and has not chosen to restate previous businesscombinations. Therefore, goodwill is stated in the opening balance sheet (at 26June 2006) at £2,101,000 being its UK GAAP carrying value at this date.Subsequent amortisation has been reversed, increasing operating profit by£19,000 for the period to 24 June 2007 and increasing its carrying value at thisdate to £269,000. 7. Impact of the adoption of International Financial Reporting Standards(continued) Reconciliation of UK GAAP to IFRS income statement for the period ended 24 June2007 UK GAAP Goodwill amortisation (IFRS format) IFRS £'000 £'000 £'000Revenue 4,739 - 4,739Cost of sales:Excluding pre-opening costs (4,006) - (4,006)Pre-opening costs (28) - (28)Total cost of sales (4,034) - (4,034) Gross profit 705 - 705Administrative expenses (743) 19 (724)Other operating income 58 - 58 Operating profit/(loss) before tradingexceptional items 20 - 39Trading exceptional items (25) - (25) Operating profit/(loss) (5) 19 14Finance income 110 - 110Finance expense (406) - (406) Loss before taxation (301) 19 (282)Taxation - - - Loss for the financial period (301) 19 (282) Discontinued operations:Operating loss for the period ondiscontinued operations (456) 98 (358)Loss on sale of discontinued operations (2,095) (98) (2,193)Taxation on discontinued operations (11) - (11) Loss attributable to shareholders (2,863) 19 (2,844) 7. Impact of the adoption of International Financial ReportingStandards (continued) Reconciliation of UK GAAP to IFRS balance sheet as at 24 June 2007 UK GAAP (IFRS Goodwill format) amortisation IFRS £'000 £'000 £'000Assets Non-current assetsGoodwill 250 19 269Other intangible assets 1 - 1Property, plant and equipment 1,991 - 1,991 Total non-current assets 2,242 19 2,261 Current assets Inventories 69 - 69Trade and other receivables 458 - 458Disposal group assets 24 - 24Cash and cash equivalents 5,534 - 5,534 Total current assets 6,085 - 6,085 Total assets 8,327 19 8,346 LiabilitiesCurrent liabilities Trade and other payables (1,145) - (1,145)Disposal group liabilities (923) - (923) Total liabilities (2,068) - (2,068) Net assets 6,259 19 6,278 Capital and reservesShare capital 1,370 - 1,370Share premium account 8,769 - 8,769Warrants reserve 50 - 50Retained earnings (3,930) 19 (3,911) Total equity 6,259 19 6,278 8. Report and accounts Copies of the annual report and accounts will be posted to the shareholdersshortly and will be available at www.gourmetholdings.co.uk. This information is provided by RNS The company news service from the London Stock Exchange