Tasty Regulatory News (TAST)

7 April 2021

Tasty plc

("Tasty" or the "Company")

Preliminary results for the 52 weeks ended 27 December 2020

Tasty (AIM: TAST), the owner and operator of restaurants in the casual dining sector, announces its annual results for the 52 week period ended 27 December 2020.

Key Points:

Financial

· Revenue £24.2m (2019: £44.6m), significantly impacted by Covid-19 related restrictions

· Adjusted EBITDA1 loss (pre IFRS 16) of £1.5m (2019: profit £1.1m)

· Adjusted EBITDA (post IFRS 16) of £2.7m

· Impairment charge of £8.1m (2019: £nil)

· Loss after tax for the period (post IFRS 16) of £12.7m (2019: loss of £0.3m (pre IFRS16))

· Bank loan as at 27 December 2020 of £nil (29 December 2019: £1.7m)

· Net cash after allowing for deferred creditors and HMRC payments of £1.5m

· Post year end - bank loan of £1.25m fully drawn in January 2021

Operational

· Sale of More London dim t completed in January 2020 for gross proceeds of £2m

· All sites closed from 24 March 2020 including takeaway

· Phased reopening of some sites for takeaway from end of May 2020 and gradually reopened most sites for eat-in from July 2020

· All sites closed again in November 2020 for in-store dining, with further tier restrictions introduced in December 2020 impacting trading

· Currently trading from 38 of 54 restaurants for delivery and takeaway

· Post year end - Samuel Kaye stepping down from Board following 2021 Annual General Meeting

1 Adjusted for depreciation, amortisation, share based payments

The report and accounts for the 52 week period ended 27 December 2020 will be available on the Company's website at https://dimt.co.uk/investor-relations/ shortly.

For further information, please contact:

Certain of the information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the UK version of the EU Market Abuse Regulation (2014/596) which is part of UK law by virtue of the European Union (Withdrawal) Act 2018, as amended and supplemented from time to time.

Chairman's statement

I am pleased to be reporting on the Group's annual results for the 52 week period ended 27 December 2020 and the comparative 52 week period ended 29 December 2019. The Group currently operates 54 restaurants, comprising of five dim t and 49 Wildwood restaurants.

The last 12 months have been extremely tough and required swift action to mitigate the extraordinary challenges and uncertainty following the outbreak of the pandemic. From the onset, the Group quickly implemented various measures to stabilise the business and ensure the safety of our staff and customers. We navigated our way through the cycle of various lockdown restrictions and consequent reopenings, through agility and quick responses to the everchanging constraints. The Board would like to thank our loyal staff, suppliers, customers, landlords and other trade creditors who have supported us throughout this unprecedented difficult period.

Following the sale of More London dim t for £2m in January 2020, we repaid our bank loan and were fortunate to have no banking covenant pressure when we shut down our estate in March 2020. As previously communicated, cash preservation has been key to maximising the Group's ability to manage the impact of the pandemic. With lockdown continuing into this year, in January 2021, the Group drew down its £1.25 million, four year term loan from its existing bankers, Barclays Bank plc, secured in September 2020, in order to strengthen its balance sheet and provide additional working capital.

In common with much of the UK hospitality industry we have where possible, utilised the various Government support schemes, including furloughing our staff during periods of full or partial closure, VAT reductions and business rate holidays. Sadly, as previously announced, we had to make a significant part of our workforce redundant to preserve the business for our remaining stakeholders, including our current employees.

While the economic and retail environment continues to be challenging, trading in between lockdowns and restrictions has been encouraging. We currently have 38 restaurants open for takeaway only. With the bank facility and continued support from our creditors and landlords, we expect to get through these difficult times due to our responsiveness and restructured operational base. Cash preservation and maintaining our staff and customers' wellbeing continues to be paramount.

The cash balance at year-end reflects our cash preservation strategy and a deferral of payments due to landlords, HMRC, and other trade creditors. When these outstanding payments are allowed for, our net cash at year-end is approximately £1.5m. 

We believe that the lessons we have learnt over the last 12 months have strengthened our operating model. We have found new ways of operating the business and have become agile at adapting to the current conditions. This includes new delivery partnerships which we envisage will continue in the future. Having survived the turmoil of the past 12 months, and as we come out of this pandemic and restrictions are lifted, we are confident that we are in a good position to service the pent-up customer demand and take advantage of the reduced competition.

As previously announced, Adam Kaye stepped down from the Board on 15 September 2020. In addition, the Board is sad to announce that Samuel Kaye will be stepping down as Non-Executive Director following the 2021 Annual General Meeting ('AGM') (date to be confirmed). Samuel stepped down as Joint CEO to become Non-Executive Director in December 2020 and both Adam and Samuel are leaving the Board to focus on their other commercial interests. The Board regrets that they are departing and would like to thank both of them for the enormous support and invaluable experience that they have provided to the Board from the Group's inception and continue to on an ongoing basis as substantial shareholders. The Board has commenced the search for an additional independent non-executive director and an announcement will be made, as appropriate.

Dividend

The Board does not propose to recommend a dividend (2019: £nil).

Keith Lassman

Chairman

6 April 2021

Strategic report for the 52 weeks ended 27 December 2020

Tasty operates two concepts in the casual dining market: Wildwood and dim t.

WildwoodAimed at a broad market, our 'Pizza, Pasta, Grill' restaurant remains the Group's main focus. Our sites are primarily based on the high street. However, we have a number of leisure, retail and tourist locations that have historically traded well, highlighting the broad appeal of the offering. Located nationally, mainly outside of London, Wildwood is currently open for takeaway service from 34 of the 49 Wildwood branded restaurants.

dim t

Our pan-Asian restaurant now trades from 5 sites, serving a wide range of dishes including dim sum, noodles, soup and curry. Currently, 4 of the 5 sites are open for takeaway service only.

Introduction and Covid-19

The beginning of 2020 was generally encouraging; however, the pandemic meant that the year played out very differently from what was anticipated.

In line with Government restrictions, we closed all our restaurants for eat-in on 20 March 2020, and decided to close all remaining open sites for takeaway and delivery on 24 March 2020. At the end of May 2020, we gradually started to reopen for takeaway service only whilst strictly following social distancing and health and safety guidelines. When the first lockdown was lifted, on 4 July 2020, the Group began a phased reopening programme for eat-in; though 6 sites remained closed during this period and have not reopened since March 2020. 

The "Eat Out To Help Out" ("EOTHO") Scheme was a great Government initiative and helped trade recover in August 2020. The Group experienced a favourable level of sales during this period, due to the increase in UK residents staying in the UK during the summer of 2020, Government initiatives and pent up demand built up since March 2020. This positive trading was short-lived as stricter measures were imposed in September 2020, including the 10 pm curfew and "work from home if you can", followed by subsequent lockdowns and the introduction of the tier system. As with other UK hospitality operators, the tier system in December 2020 had a considerable impact on our Christmas trade. The mild optimism we had in the Summer was dampened by the end of the year, and trading during this historically crucial period was poor. However, with the vaccination programme on target, staycation demand, and the prediction of an initial "surge" in the economy, we hope that the future will be more promising once lockdown ends. However, this will depend on when we can return to some kind of normality. In line with the latest Government announcements, we will open outdoor spaces where feasible in April 2021 and gradually open dine-in from May 2021; although the timing is subject to change depending on infection levels and the progress of the vaccination programme. Although closing and reopening, often with very little notice, has impacted our operating costs including inventory write-off, we have become acclimatised and effective at operating within this cycle.

Currently, we are operating under the third national lockdown, and 38 sites are open for takeaway and delivery. We are in the fortunate position that many of our sites are in residential areas and, consequently, less dependent on trade from office workers. To optimise the delivery trade, we now partner with Uber Eats and Just Eat in addition to Deliveroo. While delivery helps keep some sites open, the high cost of delivery erodes our margin. Dine-in is central to the business, and we look forward to welcoming customers back into our restaurants in the early summer.

Government support

The Government initiatives, including the Job Retention Scheme ("CJRS"), business rates holiday, deferral of HMRC payments, EOTHO and VAT reduction, have proved invaluable in supporting the Group during this difficult time. With the restrictions for dine-in remaining in place until May 2021, there will be further pressure on our cash reserves. The only way to alleviate this is to reopen our restaurants and utilise Government support. Government initiatives alone do not compensate for lost trade.

Suppliers

Since the first lockdown last March, we have worked with our food and beverage suppliers to negotiate extended payment terms and/or discounts; when we reopened for trade in the summer, they supported us in mobilising the business again. We are most thankful to everyone that helped and continues to assist us through these difficult times.

Rent negotiations

The Group has now successfully achieved consensual lease concessions and rent reductions to March 2021 on more than two-thirds of the estate. The Group is continuing negotiations with landlords and other creditors regarding outstanding debts. Given the current third lockdown and the moratorium expected to end in June 2021, we now anticipate that we may require further landlord support. 

The Board believes that with continued creditor assistance, a more formal procedure such as a company voluntary arrangement ("CVA") may be avoided but we continue to consider all options. 

The Group will constantly review its existing estate to consider whether some restaurants should close permanently. The pandemic accelerated the decision to surrender the following two restaurants:

Oakham WildwoodOn 24 September 2020, this site was surrendered at £nil.

Letchworth WildwoodOn 9 December 2020, this site was surrendered at £nil.

Oakham was one of the six sites that had not reopened since the first lockdown. In respect of other sites, we will review our options to assign or surrender if we are unable to negotiate a favourable rent, and reopening is not viable.

The following site was disposed of due to the attractive premium:

More London dim t

On 7 January 2020, this site was assigned for a total consideration of £2m.

Financial stability

From the onset of the pandemic, the Group reviewed all business costs and took steps very early to reduce outgoings, including salary reductions, reduced services, and ensuring only necessary costs were incurred.

We operated at a minimum staffing level during the first lockdown in March 2020, with over 98% of our staff furloughed. To secure the longer-term future of the Group and support maximum employee levels, we also took the agonising decision to make approximately one-third of our staff redundant across our restaurants and head office. This was a very difficult decision and process, but our priority was to save the business and support those affected as best we could. Currently, the majority of our eligible staff are on flexible furlough.

We have sought to preserve cash by deferring creditor, landlord and HMRC payments, and the Group drew down a bank loan of £1.25m in January 2021.

Appointment of strategic advisers

The Group is continuing to work with its advisers, KPMG, to assess the potential impact of Covid-19 on the business and the various strategic options available to the Group. With the progress made on consensual negotiations with landlords and other creditors, the Group has to date managed to prevent a CVA. However, with dine-in restrictions in place until May 2021, there is additional pressure on cash reserves. The Board will continue to explore all options but are hopeful that with continued creditor assistance, a more formal procedure may be avoidable.

People

We recognise that this has been a difficult time for everyone across our business, including those working remotely or in environments with additional protocols and reduced teams, and those on furlough. At one stage, 98% of our employees were furloughed and, while unfortunately, we have not been able to retain all our staff, we still employ approximately 650 people.

Every team member has played their part in helping us survive this unprecedented year. We have been overwhelmed with the dedication of our teams over the last 12 months. Despite personal and professional challenges, our colleagues have shown outstanding commitment and support throughout, for which we are incredibly grateful.

We believe in nurturing talent and are committed to training and, where possible, this continued in last year's more challenging environment. Ten apprentices completed their training programme, six with distinction and 35 functional skill exams were passed.

Throughout this difficult year, we communicated regularly with our teams and offered support, including mental health and volunteering advice.

Board Changes

As previously announced, Adam Kaye stepped down from the Board on 15 September 2020. In addition, the Board is sad to announce that Samuel Kaye will be stepping down as Non-Executive Director following the 2021 Annual General Meeting ('AGM') (date to be confirmed). Samuel stepped down as Joint CEO to become Non-Executive Director in December 2020 and both Adam and Samuel are leaving the Board to focus on their other commercial interests. The Board regrets that they are departing and would like to thank both of them for the enormous support and invaluable experience that they have provided to the Board from the Group's inception and continue to on an ongoing basis as substantial shareholders. The Board has commenced the search for an additional independent non-executive director and an announcement will be made, as appropriate.

Food and drink proposition

We continuously look at ways to make our menu more exciting and broaden its appeal, including the launch of specific vegetarian, vegan, and non-gluten menus. However, in 2020 with the new restrictions in place, a different type of innovation was required. With reduced restaurant teams due to social distancing, we simplified our menu and reviewed the menu again when the restaurants were open for takeaway only. We have introduced new menu items such as cocktails and ice-creams, which have enhanced the dine at home experience.

Customer engagement

We pioneered asking our customers what they expected of us when we reopened our doors after the first lockdown. We have been using several tools to measure and improve customer experience: mystery diner reports, online customer feedback and Trip Advisor scores.

Current trading and outlook for the coming year

With the current restrictions in place, the focus during lockdown is to preserve cash and maintain team engagement. Trading outside of lockdown has been encouraging, and we look forward to a promising period after the current lockdown ends. In the coming months we expect to be able to assess the opportunities available in the post Covid-19 world.

Highlighted Items

The Group recognises a number of charges in the accounts which arise under accounting rules and have no cash impact. These charges include share-based payments and impairments to fixed assets. The above items are included under 'highlighted items' in the statement of comprehensive income and further detailed in Note 5. These items, due to their nature, will fluctuate significantly year on year and are, therefore, highlighted to give more detail on the Group's trading performance.

Full year results and key performance indicators

The Directors continue to use a number of performance metrics to manage the business but, as with most businesses, the focus on the income statement at the top level is on sales, EBITDA before highlighted items and operating loss before highlighted items compared to the previous year. All key performance indicators that adjust for highlighted items do not constitute Statutory or GAAP measures.

The table below shows key performance indicators both before and after IFRS 16:

Due to the lockdown and Covid-19 restrictions, sales were down 46% on the corresponding period to £24.2m (2019: £44.6m). In the period leading up to the closures, revenue had been ahead of management expectations. The adjusted EBITDA loss before IFRS 16 adjustments was £1.5m (2019: profit £1.1m). EBITDA post IFRS 16 adjustments was £2.7m.

Operating loss before highlighted items was £2.2m (pre-IFRS 16 equivalent: loss £2.9m, 2019: loss £0.5m).

The impact of the implementation of the new IFRS 16 "Leases", has resulted in depreciation on Right-of-use (ROU) assets for leases and the interest charge on lease liabilities being greater than the charge for rent that would have been reported pre-IFRS 16; net impact on reported loss is £1.8m. The interest charge on the lease liabilities is higher in the earlier years of a lease. We have reviewed the impairment provision across the ROU assets, fixed assets and goodwill and have made a net provision of £8.1m (2019: £nil). After taking into account all non-trade adjustments, the Group reports a loss after tax for the period of £12.7m (2019: loss of £0.3m). Net cash inflow for the period before financing was £9.4m (2019 - inflow £2.3m). This is generated from operations and proceeds from the sale of property. Net cash flows generated from operations were £7.5m and impacted by IFRS 16 (2019 - £2.2m).

As at 27 December 2020, the Group had an outstanding bank loan of £nil (2019 - £1.7m). At 27 December 2020 cash at bank was £8.0m (2019: £4.6m). Net cash before outstanding bank loan at the balance sheet date was £8.0m (2019 - net cash £2.9m). The outstanding bank debt of £1.7m was repaid in full in January 2020. The cash balance at year-end reflects our cash preservation strategy and deferring payments due to landlords, HMRC, and other trade creditors. After reflecting these outstanding payments, our net cash at year-end is approximately £1.5m. The Group has secured a £1.25m, four year term loan from its existing bankers, Barclays Bank plc (the "Facility"), in order to strengthen its balance sheet and provide additional working capital support. The Facility was fully drawn down in January 2021.

Principal risks and uncertainties

The Directors have the primary responsibility for identifying the principal risks the business faces and for developing appropriate policies to manage those risks.

On behalf of the Board.

Daniel Jonathan PlantChief Executive Officer

6 April 2021

Report of the directors for the 52 weeks ended 27 December 2020

The Directors present their report together with the audited financial statements for the 52 weeks ended 27 December 2020 (comparative period 52 weeks to 29 December 2019).

New legislation became effective in the UK during the financial year, aimed at helping shareholders better understand how directors discharged their duty to promote the success of companies under Section 172 of the Companies Act 2006 ("S172 Matters"). Throughout the year, in performance of its duties, the Board has had regard to the interests of the Group's key stakeholders and taken account of the potential impact on these stakeholders of the decisions it has made. Details of how the Board had regard to the following S172 Matters are as follows:

Results and dividends

The consolidated statement of comprehensive income is set out below and shows the loss for the period.

The Directors do not recommend the payment of a dividend (2019 - £nil).

Post balance sheet events

Post balance sheet events are set out in Note 32.

Future developments

The outlook and future developments are set out in the Chairman's statement and the Strategic Report below.

Principal activities

The Group's principal activity is the operation of restaurants.

Directors 

The Directors of the Group during the period were as follows:

Daniel Jonathan Plant

Mayuri Vachhani 

Non-Executive

Keith Lassman

Samuel Kaye (executive until 23 December 2020)Adam Kaye (resigned 15 September 2020)

Directors' interest in shares

On 19 January 2021, Keith Lassman purchased 615,384 ordinary shares of 0.1 pence each in the Company ("Ordinary Shares"). Following this purchase, Keith now holds 1,421,983 Ordinary Shares representing approximately 1.01% of the Company's issued share capital.

Share options

At the start of the year certain of the Directors had interests in 'A' and 'B' shares in Took Us a Long Time Limited, the subsidiary company. The benefit of holding these shares is considered by the Board to be similar to the benefit of holding an EMI option. 

In March 2020 to simplify the Group and the tax structure, the above shares were bought back by Took Us a Long Time Limited and cancelled at a nominal cost of £15.65 and in aggregate at a cost of £28.37.

In January 2021 Daniel Jonathan Plant was awarded 15,676,640 'B' shares in Tasty plc which can be converted to 'A' shares subject to achievement of hurdle rates.

Employees

Applications from disabled persons are given full consideration providing the disability does not seriously affect the performance of their duties. Such persons, once employed, are given appropriate training and equal opportunities.

The Group takes a positive view toward employee communication and has established systems for ensuring employees are informed of developments and that they are consulted regularly.

Environment

Despite the Covid-19 pandemic disruption we have managed to maintain an average of 45% recycling across both brands with less than 1% of waste going to landfill.

As part of our ongoing energy efficiency programme there has been a focus on energy saving. This includes a rigorous check list for branches which have been and may be required to close during the pandemic.

Our waste oil is collected and converted into Bio Diesel and Bio Gas to ensure that none is wasted.

The Group continues to work with its delivery partners in converting all our delivery packaging to biodegradable and recyclable materials.

The Group presents its greenhouse gases ("GHG") emissions and energy use data for the first time under Streamlined Energy and Carbon Reporting ("SECR") for the year ended 27 December 2020:

Energy Intensity ratio of 0.127 has been measured using the metric of Tonnes CO2e per m2 floor area ("tCO2e").

The Group's total energy consumption for the year ended 27 December 2020 was 12,216,634 kWh.

Donations

The Group made no charitable or political donations in the period (2019 - none).

Financial Instruments

Details of the use of financial instruments and the principal risks faced by the Group are contained in Note 28 to the financial statements.

Going concern

At the time of approving the financial statements, the Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. In reaching this conclusion the Directors have considered the financial position of the Group, together with its forecasts for the next 12 months and taking into account possible changes in trading performance. The going concern basis of accounting has, therefore, been adopted in preparing the financial statements. However, the Directors note that the effects of Covid-19 and the impact of ongoing losses indicate the existence of a material uncertainty that may cast doubt over the Group's ability to continue to apply the going concern basis of accounting. The Board's assessment of going concern can be found in note 1(c) to the financial statements.

Auditors

All of the current Directors have taken all reasonable steps necessary to make themselves aware of any information needed by the Group's auditors for the purposes of their audit and to establish that the auditors are aware of that information. The Directors are not aware of any relevant audit information of which the auditors are unaware.

Haysmacintyre LLP were appointed as the auditors and have expressed their willingness to continue in office and a resolution to re-appoint them will be proposed at the annual general meeting.

On behalf of the Board.

Daniel Jonathan PlantChief Executive Officer

6 April 2021

Statement of directors' responsibilities

The Directors are responsible for preparing the strategic report, the annual report and the financial statements in accordance with applicable law and regulations.

Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors have elected to prepare the Group and Company financial statements in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union. Under company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Group and the Company and of the profit or loss of the Group for that period. The Directors are also required to prepare financial statements in accordance with the AIM Rules for Companies issued by the London Stock Exchange.

In preparing these financial statements, the Directors are required to:

· select suitable accounting policies and then apply them consistently;

· make judgements and accounting estimates that are reasonable and prudent;

· state whether they have been prepared in accordance with IFRSs as adopted by the European Union, subject to any material departures disclosed and explained in the financial statements;

· prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group will continue in business.

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Group's transactions and disclose with reasonable accuracy at any time the financial position of the Group and enable them to ensure that the financial statements comply with the requirements of the Companies Act 2006. They are also responsible for safeguarding the assets of the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Website publication

The Directors are responsible for ensuring the annual report and the financial statements are made available on a website. Financial statements are published on the Company's website (www.dimt.co.uk) in accordance with legislation in the United Kingdom governing the preparation and dissemination of financial statements, which may vary from legislation in other jurisdictions. The maintenance and integrity of the Company's website is the responsibility of the Directors. The Directors' responsibility also extends to the ongoing integrity of the financial statements contained therein.

Consolidated statement of comprehensive income

for the 52 weeks ended 27 December 2020

The notes below form part of these financial statements.

Consolidated statement of changes in equityfor the 52 weeks ended 27 December 2020

The notes below form part of these financial statements.

Company statement of changes in equityfor the 52 weeks ended 27 December 2020

The notes below form part of these financial statements.

Consolidated balance sheetAt 27 December 2020

The financial statements were approved by the Board of Directors of the Company and authorised for issue on 6 April 2021 and signed on their behalf by Daniel Jonathan Plant.

The notes below form part of these financial statements.

Company balance sheetAt 27 December 2020

The Parent Company, Tasty plc, has taken advantage of the exemption in s 408 of the Companies Act 2006 not to publish its own income statement. The Parent Company made a loss of £3.2m (2019 - loss of £3.1m) for the period. The Parent Company has not recognised leases under IFRS 16 in its balance sheet as management have concluded that the substance of the leases is held by the subsidiary, Took Us A Long Time Ltd ("TUALT") and recognised within its Company accounts.

The financial statements were approved by the board of directors of the Company and authorised for issue on 6 April 2021 and signed on their behalf by Daniel Jonathan Plant.

The notes below form part of these financial statements.

Consolidated cash flow statementFor the 52 weeks ended 27 December 2020

The notes below form part of these financial statements.

Company cash flow statementFor the 52 weeks ended 27 December 2020

The notes below form part of these financial statements.

1 Accounting policies

Tasty plc is a public listed company incorporated and domiciled in England and Wales. The Company's ordinary shares are listed on AIM. Its registered address is 32 Charlotte Street, London, WC1T 2NQ.

(a) Statement of compliance

These financial statements of the Group and Company have been prepared in accordance with International Financial Reporting Standards, International Accounting Standards and Interpretations (collectively IFRS) issued by the International Accounting Standards Board (IASB) as adopted by European Union ("adopted IFRSs"). These financial statements have also been prepared in accordance with those parts of the Companies Act 2006 that are relevant to companies that prepare their financial statements in accordance with IFRS.

(b) Basis of preparation

The financial statements cover the 52 week period ended 27 December 2020, with a comparative period of the 52 week period ended 29 December 2019. The financial statements are presented in sterling, rounded to the nearest thousand and are prepared on the historical cost basis. Accounting policies of the Company are consistent with the policies adopted by the Group.

(c) Going concern

As at 27 December 2020, the Group had net assets of £0.6m (2019: £13.3m). The Group meets its day-to-day working capital requirements through the generation of operating cashflow, equity raise and bank finance. The Group's principal sources of funding are:

· Issues of ordinary share capital in the Company on AIM.

· a £1.25m, four year term loan from its existing bankers, Barclays Bank plc (the "Facility"), in order to strengthen its balance sheet and provide additional working capital support. The Facility was drawn down in January 2021. The Facility has a capital repayment holiday of 12 months and carries interest at a rate of 4.5% per annum over the Bank of England Base Rate, following drawdown. The Group has also secured a £250,000 overdraft facility.

Covid-19 has led to a high level of uncertainty within the UK economy in general and has had a devastating impact on the hospitality industry in particular following the initial Government announcement requiring the closure of all restaurants from 20 March 2020 for the first lockdown. Action was immediately taken to minimise costs and cash outflows, including use of the Government's Job Retention Scheme to furlough all restaurant employees. During the first lockdown, 98% of staff had been furloughed on the Government's Job Retention Scheme. The Directors' and head-office staff salaries were also reduced while sites remained closed. Rates relief and grants have been received where relevant. Currently the majority of staff which are eligible are on flexible furlough.

The Group experienced a positive level of sales during August 2020 due to initiatives and pent-up demand. This positive trading was short-lived as stricter measures were imposed in September 2020, including the 10 pm curfew, "work from home if you can", and followed by subsequent lockdowns and tier system. However, with the vaccination programme on target, staycation demand, and the prediction of a "surge" in the economy, we hope that the future will be more promising once lockdown ends. However, this will depend on when we can return to some kind of "normal". With the latest Government announcements, we will open outdoor spaces where feasible in April and a gradual opening of dine-in from May; although the timing is subject to change depending on infection levels and the progress of the vaccination programme. Trading outside of lockdown has been encouraging, and we look forward to a promising period after lockdown ends.

Discussions are also continuing with landlords and trade creditors to reduce current and future liabilities. The Group monitors cash balances and prepares regular forecasts, which are reviewed by the Board. These forecasts include our best estimates and judgements based on currently available information and Government announcements. Judgement is particularly required as to the expected level of future trade and forecast reopening dates of our sites, which as above, we expect a gradual opening of dine-in from May 2021.

Having reviewed the updated forecast and given the ability of the Group to manage costs, utilise government support, the bank loan and other available measures, including ongoing discussions with landlords, the Directors believe that it remains appropriate to prepare the financial statements on a going concern basis. However, the combined circumstances and risk that the mitigating actions available to the Directors are not sufficient represent a material uncertainty which may cast significant doubt on the Group's ability to continue as a going concern and, therefore, to continue realising their assets and discharging their liabilities in the normal course of business.

(d) Changes in accounting policies and disclosures

New standards, amendments to standards or interpretations adopted by the Group

IFRS 16 'Leases' (effective January 2019)

Impact on Lessee accounting

Effective for periods starting on or after 1 January 2019, IFRS 16 has replaced IAS 17 and IFRIC4 (Determining whether an arrangement contains a lease).

The change in definition of a lease mainly relates to the concept of control. IFRS 16 distinguishes between leases and service contracts on the basis of whether the use of an identified asset is controlled by the customer. Control is considered to exist if the customer has:

• The right to obtain substantially all of the economic benefits from the use of an identified asset; and

• The right to direct the use of that asset in exchange for consideration.

The Group adopted IFRS 16 for its period starting 30 December 2019 using the modified retrospective approach on transition, recognising leases at the carried forward value had they been treated as such from inception, without restatement of comparative figures. On adoption of IFRS 16, the Group recognised right-of-use assets and lease liabilities in relation to the restaurant sites it leases for its business . The remaining average length of the lease is 13 years. Up to 29 December 2019 the Group classified leases as finance or operating leases under IAS17: leases and payments made under operating leases (net of any incentives received from the lessor) were charged to profit and loss on a straight-line basis over the period of the lease.

When applying IFRS 16, the group applied the following practical expedients on transition date:

• Reliance on the previous identification of a lease (as provided by IAS 17) for all contracts that existed on the date of initial applications;

• Exclusion of initial direct costs from the measurement of the right-of-use asset as the date of initial application.

The change in accounting policy affected the following items in the balance sheet on 30 December 2019:

• Right-of-use assets ("ROU") - increased by £55.1m

• Lease liabilities - increased by £57.4m

Right-of-use assets are measured on transition at an amount equal to the minimum lease liability at the date of initial application and adjusted for an onerous lease provision of £2.8m and a lease incentive of £1.3m. In addition, £0.6m was reclassified from prepaid operating lease to ROU.

The recognised right-of-use assets all relate to property leases. During the period ended 27 December 2020 the Group made a provision for impairment of the right-of-use assets against a number of sites totalling £10.0m. The right-of-use assets as at 27 December 2020 were £39.8m.

Lease liabilities are measured on transition at the carried forward present value of the remaining lease payments discounted using the Group's incremental borrowing rate of 4.5% plus the Bank of England base rate of 0.1%. Lease liabilities are measured on transition at the present value of the minimum lease payments discounted using the incremental borrowing rate associated with the lease. This was identified as 4.6%. The lease liabilities as at 27 December 2020 were £55.1m.

Included in profit and loss for the period is £3.6m depreciation of right-of-use assets and £2.5m financial expenses on lease liabilities.

The Group's leases are held across Tasty plc or Took Us Long Time Ltd ("TUALT"). In determining where the assets and liabilities should be accounted for, we have reviewed which entity derives the benefit and rights to use the asset. In assessing this we have reviewed where the trade occurs, where staff are employed and where day to day activity is managed from. We have concluded that the substance of the lease is that it is held by TUALT and accordingly recognised the lease liabilities within the TUALT company accounts.

The lease liabilities recognised in TUALT but in the name of Tasty plc totalled £44m at 27 December 2020. Accordingly, this balance represents a contingent liability for the Company only.

Impact on Lessor accounting

Under IFRS 16, a lessor continues to classify leases as either finance leases or operating leases and account for those two types of leases differently.

Based on an analysis of the Group's operating leases as at 27 December 2020 on the basis of the facts and circumstances that exist at that date, the Directors of the Group have assessed that the impact of this change has not had any impact on the amounts recognised in the Group's consolidated financial statements.

Short-term leases and leases of low-value assets

The Group has elected not to recognise right-of-use assets and lease liabilities for short-term leases that have a lease term of 12 months or less and leases of low value assets. The Group recognises these payments as an expense on a straight-line basis over the lease term. Currently the Group has no low value assets or short term leases.

Amounts Recognised in the Balance Sheet

Lease liabilities under IFRS 16

Amounts Recognised in the Income Statement

Note the Group has elected to use the modified retrospective approach on transition, without restatement of comparative figures.

New standards, amendments to standards or interpretations not yet adopted by the Group

The following new standards, amendments to standards or interpretations are mandatory for the first time for the financial year beginning 1 January 2020. No standards have been early adopted by the Company.

Definition of Material - Amendments to IAS 1 and IAS 8 (effective 1 January 2020)

The IASB has made amendments to IAS 1, 'Presentation of Financial Statements', and IAS 8, 'Accounting Policies, Changes in Accounting Estimates and Errors', which use a consistent definition of materiality throughout International Financial Reporting Standards and the Conceptual Framework for Financial Reporting, clarify when information is material and incorporate some of the guidance in IAS 1 about immaterial information.

In particular, the amendments clarify:

a) That the reference to obscuring information addresses situations in which the effect is similar to omitting or misstating that information, and that an entity assesses materiality in the context of the financial statements as a whole, and;

b) The meaning of 'primary users of general purpose financial statements' to whom those financial statements are directed, by defining them as 'existing and potential investors, lenders and other creditors' that must rely on general purpose financial statements for much of the financial information they need.

The amendment is not expected to have any impact on the Group.

(e) Basis of consolidation

The consolidated financial statements incorporate the results of the Company and its subsidiary, Took Us A Long Time Limited. The accounting period of the subsidiary is co-terminous with that of the parent undertaking.

(f) Revenue

The Group's revenue is derived from goods and services provided to the customers with revenue recognised at the point in time when control of the goods has transferred to the customer. Control passes to the customers at the point at which food and drinks are provided and the Group has a present right for payment.

(g) Other income

Included in Other income is the rental income from operating leases.  Rental income is recognised in the period to which it relates, and rent free periods would be spread over the terms of the lease. The cost of these leases is included within the cost of sales. The Group has received Government grants in relation to the Coronavirus Job Retention Scheme ("CJRS") and "Retail and Hospitality Business Grants", provided by the Government in response to Covid-19's impact on the business. In accordance with IAS 20 (Accounting for Government Grants and Disclosure of Government Assistance) guidelines, the Group has recognised the salary expense as normal and recognised the CJRS grant income in profit and loss as the Group becomes entitled to the grant. "Retail and Hospitality Business Grants" are not recognised until there is reasonable assurance that the Group would qualify and meet the conditions attaching to them.

(h) Retirement benefits: Defined contribution schemes

Contributions to defined contribution pension schemes are charged to the consolidated income statement in the period to which they relate.

(i) Share based payments

The Group operates a number of equity-settled share-based payment schemes under which share options are granted to certain employees. Options granted to employees are measured at fair value at the date of grant and the fair value is charged to the statement of comprehensive income over the vesting period. Fair value is measured using the Black-Scholes or binomial model. In determining fair value, no account is taken of any vesting conditions, other than conditions linked to the price of the Group's shares (market-based conditions).

No expense is recognised for awards that do not ultimately vest, except for awards where vesting is conditional upon a market condition, which are treated as vesting irrespective of whether or not the market condition is satisfied, provided all other conditions are satisfied. The fair value determined at the grant date is then expensed on a straight line over the vesting period, based on the directors' best estimate of the number of shares that will eventually vest and adjusted for the effect of non-market based vesting conditions. The movement in the cumulative expense since the previous balance sheet date is recognised in the Income Statement, with the corresponding movement taken to equity.

Where the terms and conditions of options are modified before they vest or where options have been cancelled and reissued with modified terms, the increase in the fair value of the options, measured immediately before and after the modification, is also charged to the income statement over the remaining vesting period. Where options have been cancelled and no re-issue made, the remaining expense is recognised in the period the option was cancelled.

The grant by the parent Company of options over its equity instruments to the employees of its subsidiary in the Group is treated as a capital contribution. The fair value of employee services received, measured by reference to the grant date fair value, is recognised over the vesting period as an increase to investment in subsidiary undertakings, with a corresponding credit to equity.

(j) Borrowing costs

Borrowing costs are recognised in the income statement in the period in which they are incurred.

(k) Externally acquired intangible assets

Externally acquired intangible assets are initially recognised at cost and subsequently amortised on a straight-line basis over their useful economic lives. The amortisation expense is included within the cost of sales line in the consolidated income statement.

The significant intangibles recognised by the Group and their useful economic lives are as follows:

(l) Property, plant and equipment

Items of property, plant and equipment are stated at cost less accumulated depreciation (see below) and impairment losses.

Depreciation is provided to write off the cost or valuation, less estimated residual values, of all fixed assets, evenly over their expected useful lives and it is calculated at the following rates:

Property, plant and equipment are reviewed for impairment in accordance with IAS 36 Impairment of Assets, when there are indications that the carrying value may not be recoverable. Impairment charges are recognised in the statement of comprehensive income. See note 2(d) for further details.

(m) Non-current assets held for sale

Non-current assets are classified as held for sale when the Board plans to sell the assets and no significant changes to this plan are expected. The assets must be available for immediate sale, an active programme to find a buyer must be underway and be expected to be concluded within 12 months with the asset being marketed at a reasonable price in relation to the fair value of the asset.

Non-current assets classified as held for sale are measured at the lower of their carrying amount immediately prior to being classified as held for sale and fair value less costs of disposal. Following their classification as held for sale, non-current assets are not depreciated.

(n) Provisions

In the period to 29 December 2019, Provisions for onerous contracts were recognised when the expected benefits to be derived by the Group from a contract are lower than the unavoidable cost of meeting its obligation under the contract. Estimates had been made with respect to the time to exit and associated costs, for example lease incentives which may be required to be paid as part of the sublet process. Judgement is required by management when making such estimates. In the period to 27 December 2020, the Group has recognised a provision for dilapidations for a number of sites, where the need to carry out the work has been identified but a full survey and commission has not been undertaken and therefore management has applied their judgment in determining the provision.

(o) Loans and receivables

These assets arise principally from the provision of goods and services to customers (e.g. trade receivables), but also incorporate other types of financial assets where the objective is to hold these assets in order to collect contractual cash flows and the contractual cash flows are solely payments of principal and interest. They are initially recognised at fair value plus transaction costs that are directly attributable to their acquisition or issue, and are subsequently carried at amortised cost using the effective interest rate method, less provision for impairment. 

Impairment provisions for trade receivables are recognised based on the simplified approach within IFRS 9 using a provision matrix in the determination of the lifetime expected credit losses. During this process the probability of the non-payment of the trade receivables is assessed. This probability is then multiplied by the amount of the expected loss arising from default to determine the lifetime expected credit loss for the trade receivables. For trade receivables, which are reported net, such provisions are recorded in a separate provision account with the loss being recognised in the consolidated statement of comprehensive income. On confirmation that the trade receivable will not be collectable, the gross carrying value of the asset is written off against the associated provision.

Impairment provisions for receivables from related parties and loans to related parties are recognised based on a forward looking expected credit loss model. The methodology used to determine the amount of the provision is based on whether there has been a significant increase in credit risk since initial recognition of the financial asset. For those where the credit risk has not increased significantly since initial recognition of the financial asset, twelve month expected credit losses along with gross interest income are recognised. For those for which credit risk has increased significantly, lifetime expected credit losses along with the gross interest income are recognised. For those that are determined to be credit impaired, lifetime expected credit losses along with interest income on a net basis are recognised.

The Group's loans and receivables comprise trade and other receivables and cash and cash equivalents in the balance sheet. The Company's loans and receivables comprise only inter-Company receivables. Cash and cash equivalents include cash in hand and deposits held with banks.

(p) Apprenticeship funding and levy

The payments made under the levy represent a prepayment for training services expected to be received and is recognised as an asset until the receipt of the service. When the training service is received, an appropriate expense is recognised. The grant income is deferred until apprentices receive training under the rule of the scheme and we are satisfied that we have fully complied with the scheme. We have applied an element of judgement until a full inspection is carried out.

(q) Financial liabilities

Financial liabilities include trade payables, accrued lease charges, other short-term monetary liabilities, which are initially recognised at fair value and subsequently carried at amortised cost.

Bank borrowings are initially recognised at fair value and are subsequently measured at amortised costs using the effective interest method. Interest expense includes initial transaction costs and any premium payable on redemption as well as any interest payable while the liability is outstanding.

(r) Inventories

Raw materials and consumables

Inventories are stated at the lower of cost and net realisable value. Cost comprises all costs of purchase and other costs incurred in bringing the inventories to their present location and condition. Net realisable value is based on estimated selling price less costs incurred up to the point of sale.

Crockery and utensils (Smallwares)

Smallware inventories are held at cost which is determined by reference to the quantity in issue to each restaurant. Smallware inventory relates to small value items which have short life spans relating to kitchen and bar equipment. These items are recorded under inventory as they are utilised in providing food and beverage to customers.

(s) Leased assets

Until transition to IFRS 16 on 30 December 2019, leases were classified as finance leases whenever the terms of the lease are such that they transfer substantially all the risks and rewards of ownership to the Group. All other leases were classified as operating leases.

Fixed payments made under operating leases were recognised in the income statement on a straight-line basis over the term of the lease. Contingent rent, such as turnover related rents, were recognised in the income statement as incurred. Incentives to enter into an operating lease were spread on a straight-line basis over the lease term as a reduction in rental expense.

Payments made to acquire operating leases were treated as pre-paid lease expenses and amortised over the term of the lease.

(t) Taxation

Tax on the profit and loss for the year comprises current and deferred tax. Tax is recognised in the profit and loss except to the extent that it relates to items recognised directly in equity, in which case it is recognised in equity. Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates enacted or substantively enacted at the balance sheet date, and any adjustment to tax payable in respect of previous years.

Deferred tax assets and liabilities are recognised where the carrying amount of an asset or liability in the balance sheet differs from its tax base, except for differences arising on:

· The initial recognition of goodwill

· The initial recognition of an asset or liability in a transaction which is not a business combination and at the time of the transaction affects neither accounting or taxable profit.

Recognition of deferred tax assets is restricted to those instances where it is probable that taxable profit will be available against which the difference can be utilised.

Deferred tax is provided using the balance sheet liability method, providing for all temporary differences between the carrying amounts of assets and liabilities recorded for reporting purposes and the amounts used for tax purposes.

The amount of the asset or liability is determined using tax rates that have been enacted or substantively enacted by the reporting date and are expected to apply when the deferred tax liabilities or assets are settled or recovered. Deferred tax balances are not discounted.

(u) Goodwill

Goodwill represents the difference between the fair value of consideration paid and the carrying value of the assets and liabilities acquired. Goodwill arose on acquisition of a group of leases.

Goodwill is stated as originally calculated less any accumulated provision for impairment. Goodwill is allocated to individual CGUs, where each CGU is a restaurant, and is subject to an impairment review at each reporting date.

(v) Investments

Investments in subsidiaries are included in the Company's Statement of Financial Position at cost less provision for impairment.

(w) Share capital

The Company's ordinary shares are classified as equity instruments.

(x) Operating profit

Operating profit is stated after all expenses, but before financial income or expenses. Highlighted items are items of income or expense which because of their nature and the events giving rise to them, are not directly related to the delivery of the Group's restaurant service to its patrons and merit separate presentation to allow shareholders to understand better the elements of financial performance in the year, so as to facilitate comparison with prior periods and to assess better trends in financial performance.

(y) Earnings per share

Basic earnings per share values are calculated by dividing net profit/(loss) for the year attributable to Ordinary equity holders of the parent by the weighted average number of Ordinary shares outstanding during the year.

2 Critical accounting estimates and judgements

The preparation of the Group's financial statements requires management to make certain estimates, judgements and assumptions that affect the reported amount of assets and liabilities, and the disclosure of contingent liabilities at the statement of financial position date and amounts reported for revenues and expenses during the year. However, uncertainty about these assumptions and estimates could result in outcomes that could require a material adjustment to the carrying amount of the assets or liability affected in the future. Estimates and judgements are continually evaluated based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. In the future, actual experience may differ from these estimates and assumptions. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial period are discussed below.

(a) Share based payments (Note 26)

The Group operates equity share-based remuneration schemes for employees. Employee services received and the corresponding increase in equity are measured by reference to the fair value of the equity instruments at the date of grant, excluding the impact of any non-market vesting conditions. The fair value of share options is estimated by using valuation models, such as Black Scholes or binomial on the date of grant based on certain assumptions. Those assumptions are described in note 27 and include, among others, the dividend growth rate, expected volatility, expected life of the options (for options with market conditions) and number of options expected to vest.

(b) Accruals (Note 18)

In order to provide for all valid liabilities which exist at the balance sheet date, the Group is required to accrue for certain costs or expenses which have not been invoiced and therefore the amount of which cannot be known with certainty. Such accruals are based on management's best estimate and past experience. Delayed billing in some significant expense categories such as utility costs can lead to sizeable levels of accruals. The total value of accruals as at the balance sheet date is set out in note 18.

(c) Useful lives of Right-of-use assets, property, plant and equipment (Note 13)

Property, plant and equipment are amortised or depreciated over their useful lives. Useful lives are based on management estimates of the period that the assets will generate revenue, which are periodically reviewed for continued appropriateness. Right-of-use assets are depreciated over the life of the lease. The life of the lease is the minimum committed lease period.

(d) Impairment reviews (Note 13)

In carrying out an impairment review in accordance with IAS 36 it has been necessary to make estimates and judgements regarding the future performance and cash flows generated by individual trading units which cannot be known with certainty. The Group views each restaurant as a separate cash generating unit ("CGU"). Past performance is often used as a guide in estimating future performance, or comparison with similar sites. Where the circumstances surrounding a particular trading unit have changed then forecasting future performance becomes extremely judgemental and for these reasons the actual impairment required in the future may differ from the charge made in the financial statements. When assessing a CGU recoverable amount, the value in use calculation uses a discounted cash flow model which is sensitive to the discount rate and the growth rate used after taking into account potential sale value. The cashflow projections are influenced by factors which are inherently uncertain such as footfall and non-controllable costs such as rates and license costs. The future cashflows are harder to predict due to the pandemic.

All assets (ROU, fixed assets and goodwill) are reviewed for impairment in accordance with IAS 36 Impairment of Assets, when there are indications that the carrying value may not be recoverable. Impairment charges are recognised in the statement of comprehensive income.

All assets are subject to impairment tests whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. Where the recoverable amount is higher than the carrying amount of the CGU, no further assessment is required. Where the carrying value of an asset or a CGU exceeds its recoverable amount (i.e. the higher of value in use and fair value less costs to dispose of the asset), the asset is written down accordingly. In the absence of any information about the fair value of a CGU, the recoverable amount is deemed to be its value in use. Value in use is calculated using cash flows over the remaining life of the lease for the CGU discounted at 6% (2019: 10%), being the rate considered to reflect the risks associated with the CGUs. The discount rate is based on the Group's weighted average cost of capital ("WACC") which is used across all CGUs due to their similar characteristics. This rate is considered more appropriate than the 10% applied to more limited scope impairment reviews in prior years.

In the prior years, we have applied a growth rate across all CGUs, in 2019 this was 3%. This was because in the prior years, each CGU shared similar risks and had similar characteristics. The Covid-19 pandemic has resulted in an increased uncertainty and greater difference in performance across CGUs depending on whether it is located in a residential, city centre, high street or tourist location. The location also impacts when site can resume normal trading. Due to lockdowns in 2021, the forecast cashflow in 2021 is not always indicative of the future cashflows. The cashflow of each CGU has been determined based on management's judgement of future performance based on a combination of historical performance, impact of the pandemic and expected recovery in future years and therefore each CGU's cashflow has been selected on an individual criteria. Management's conservative judgement has been applied in selecting this criteria but full impact of the pandemic has yet to be materialise and therefore 0.5% growth rate (2019 - 3%) has been applied. Included within the cashflow is management's estimate of the capital expenditure in the future years.

(e) Goodwill impairment reviews (Note 12)

The Group determines whether goodwill is impaired on an annual basis and this requires an estimation of the value in use of the cash-generating units to which the goodwill is allocated. This involves estimation of future cash flows and choosing a suitable discount rate. Full details are supplied in note 12, together with an analysis of the key assumptions.

(f) Intercompany provision (Note 17)

In carrying out a review of intercompany loan in accordance with IFRS 9 it has been necessary to make estimates and judgements regarding the repayment of the loan by its subsidiary to the Company. A sensitivity analysis has been performed on the repayment of loan value.

(g) Onerous contract provision (Note 19)

In the period to 29 December 2019, the amounts provided were based on expected future rental obligations, legal costs, associated exit costs and potential lease incentives which may be required to be paid as part of the sub-let/surrender process. Significant judgements were used in calculating these provisions and changes to these assumptions or future events could have caused the value of these provisions to change. On transition to IFRS 16 on 30 Dec 2019, the onerous lease provision was removed from the accounts as IFRS 16 does not require this. Provisions for sites are assessed as part of the impairment review with further details in note 2(d).

(h) Crockery and utensils (Smallwares) inventory

The cost of replenishing smallwares is expensed directly through the income statement. Smallwares is recognised at historic cost and tested for impairment on an annual basis. Due to Covid-19 affecting menu and sales and introduction of a simplified menu, some of the smallware items were redundant. We have impaired smallware inventory value to reflect usage.

(i) Lease liabilities (Note 1(d))

The calculation of lease liabilities requires the Group to determine an incremental borrowing rate ("IBR") to discount future minimum lease payments. The IBR is the rate of interest that the Group would have to pay to borrow over a similar term, and with a similar security, the funds necessary to obtain an asset of a similar value to the right-of-use asset in a similar economic environment. The IBR rate of 4.6% therefore reflects what the Group 'would have to pay', which requires estimation when no observable rates are available or when they need to be adjusted to reflect the terms and conditions of the lease. As at 27 December 2020, a sensitivity analysis has been conducted on the lease liabilities which shows that increasing the IBR rate by 1% will decrease the lease liability by £3.6m and decrease the right-of-use asset pre-impairment by £3.7m.

(j) Dilapidations provision

The Group has recognised a provision of £0.3m for dilapidations for a number of sites, where the need to carry out the work has been identified but a full survey and commission has not been undertaken and therefore management has applied their judgment in determining the provision. The Group has not made a provision for the costs of restoring the condition of sites at the end of the leases. This is based on management experience and judgement.

(k) Lease recognition

The Group's leases are held across Tasty plc or Took Us Long Time Ltd ("TUALT"). In determining where the assets and liabilities should be accounted for, we have reviewed which entity derives the benefit and rights to use the asset. In assessing this we have reviewed where the trade occurs, where staff are employed and where day to day activity is managed from. We have adjudged that the substance of the lease is that it is held by TUALT and accordingly recognised the lease liabilities within the TUALT company accounts.

3 Revenue, other income and segmental analysis

The Group's activities, comprehensive income, assets and liabilities are wholly attributable to one operating segment (operating restaurants) and arises solely in one geographical segment (United Kingdom). All the Group's revenue is recognised at a point in time.

An analysis of the Group's total revenue is as follows:

An analysis of the Group's other income is as follows:

The Group has received Government grants in relation to the Coronavirus Job Retention Scheme ("CJRS") and Covid-19 Business Grants, provided by the Government in response to Covid-19's impact on the business.

In accordance with IAS 20 (Accounting for Government Grants and Disclosure of Government Assistance) guidelines, the Group has recognised the salary expense as normal and recognised the grant income in profit and loss as the Group becomes entitled to the grant. The CJRS grant and business grants of £5.1m have been recognised within other income. "Retail and Hospitality Business Grants" are not recognised until there is reasonable assurance that the Group would qualify and meet the conditions attaching to them.

4 Operating loss

5 Highlighted items - charged to operating expenses

The above items have been highlighted to give more detail on items that are included in the consolidated statement of comprehensive income and which when adjusted shows a profit or loss that reflects the ongoing trade of the business.

6 Finance income and expense

7 Employees

The average number of persons, including Directors, employed by the Group during the period was 810 of which 796 were restaurant staff and 14 were administration staff, (2019 - 1,028 of which 1,006 were restaurant staff and 22 were administration staff).

No staff are employed by the Company (2019 - no staff).

Of the total staff costs £13.8m was classified as cost of sales (2019 - £17.2m) and £1.0m as operating expenses (2019 - £1.0m). Redundancy costs of £0.09m (2019 - £0.0m) have been included as a cost of Restructure and Consultancy in Note 5.

8 Directors and key management personnel remuneration

Key management personnel identified as the Directors are those persons having authority and responsibility for planning, directing and controlling the activities of the Group, and represent the Directors of the Group.

In addition to the above, a pension contribution was provided to M Vachhani of £5,000 (2019 - £1,000). Also benefits paid to J Plant and M Vachhani of £7,000 (2019 - £nil)

CompanyThe Company paid no director emoluments during the year (2019 - none). 

9 Income tax expense

The tax credit for the period is lower than the standard rate of (2019 - lower than) corporation tax in the UK. The differences are explained below: