REG - Comptoir Group PLC - FY 2023 Results
21/05/2024 07:00
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RNS Number : 1861P Comptoir Group PLC 21 May 2024
21 May 2024
Comptoir Group Plc
("Comptoir", the "Group" or the "Company")
FY 2023 Results - A year of positive growth and expansion
Comptoir Group Plc (AIM: COM), the owner and/or operator of Lebanese, Middle
Eastern and North African inspired restaurants announces its audited annual
results for the 52 week period ended 31 December 2023.
Highlights:
· Group revenue of £31.5m, up by 1.4% (2022: £31.0m), up by 1.3%
like for like
· Total system sales* of £42.4m, an increase of 6.7%
(2022:£39.8m), with a like for like system sales growth of 3%
· Gross profit of £24.7m, ahead on last year by £0.3m (2022:
£24.4m)
· Adjusted EBITDA** before highlighted items of £0.1m (2022:
£2.8m)
· IFRS profit after tax of £1.6m loss (2022: £0.6m)
· Net cash and cash equivalents at the end of year of £7.0m (2022:
£9.9m)
· Basic earnings per share of 1.30p loss (2022: 0.48p)
· Portfolio expansion with new openings at Ealing (2023) and
Southbank (2024), as well as switching Cheshire Oaks from a franchised to
equity model and opening a new Shawa franchise in Abu Dhabi in 2024
· Currently trading in 28 stores: 22 managed and 6 franchised
Beatrice Lafon, Non-Executive Chair, commented:
"FY 2023 results reflect the continued effects of the consolidation strategy
the board put in place in August 2022 to rebuild the teams after the pandemic,
manage the headwinds created by the inflationary pressures on wages,
ingredients and utility costs in particular whilst establishing a strong
foundation for growth.
Full year EBITDA at £0.1m was in line with management expectations. Sales
grew by 1.4% to £31.5m, GP grew 1.1% last year to £24.7m, colleague
retention improved, over 90% of our teams were trained in our new 'Generous
Hospitality' training, all brands benefited from a total revamp of our menus
to increase the mixof plant based options, whilst offering ever more new and
authentic recipes. Growth in NPS, now at over 74% on a rolling 12 months basis
and continued reduction in staff turnover, give us confidence in the value of
our plan for the medium term.
In 2023, the board also chose to invest in our infrastructure, to create a
resilient supply base and to take steps to progress with our ESG roadmap. We
have started to invest in green technology, updated both our sourcing policies
and partners, and designed menus more coherent with our carbon neutral goals.
At publication of this report, we are trading with 28 stores (22 managed, 6
franchised), having closed Leeds in January 2023 and opened Ealing in October
2023.
So far in 2024, we have opened a new franchised Shawa in Abu Dhabi, a new
directly managed Comptoir Flagship in Southbank, closed Yalla Yalla Soho and
brought Cheshire Oaks into the managed portfolio.
We started a refurbishment program, with Duke of York Sq Chelsea reopening mid
May with London Bridge and Westfield London to follow later this year. All our
terraces have been refurbished, well ahead of the start of the season.
Our investments in tech continue, for instance our first labour productivity
tool is now in place. A new digital strategy came into force in March 24, with
the launch of new websites, online booking systems and new online
partnerships.
By Summer 2024, a brand-new senior leadership team will be in place, to allow
the Group to scale to new heights.
On behalf of the board, I would like to thank all our colleagues who worked
tirelessly to transport our guests to a happy place, every time. We are proud
of how well our colleagues are adapting to new ways of working, placing our
famous hospitality and amazing food at the core of all they do. I would also
like to thank our senior executive team, our old and new partners and
shareholders for enabling all the changes to land successfully.
We remain optimistic and cautious about 2024 as costs and prices continue to
rise in high single and double digits and footfall remains both challenged and
erratic. We are focussed on executing our Plan well, to be in a strong
position to capitalise on any demand recovery.
The business enters 2024 with renewed energy and a new team, a balanced
portfolio of brands and locations and a strong cash position."
*System sales are defined as total sales for equity and franchise restaurants.
** Adjusted EBITDA was calculated from the (loss)/profit before taxation
adding back net interest cost, depreciation, share-based payments and
non-recurring costs (note 3).
Annual Report and Notice of AGM
The Company confirms that it has posted its 2023 Annual Report and Accounts to
shareholders together with the 2024 Notice of AGM and forms of proxy. The AGM
will be held at 9.00am on 26 June 2024 at 6th Floor, Winchester House, 259-269
Old Marylebone Road, London, NW1 5RA.
The 2023 Annual Report and Accounts and Notice of AGM 2024 are available on
the Company's website.
Enquiries:
Comptoir Group plc
via Camarco
Beatrice Lafon, Non-Executive Chair
Nick Ayerst, CEO
Peter Harvey, Interim FD
Cavendish Capital Market Limited (Nominated Adviser and Broker)
Simon Hicks
0207 220 0500
Camarco (press enquiries)
Jennifer
Renwick
comptoir@camarco.co.uk
Letaba Rimell
Notes to Editors
Comptoir Group PLC owns and operates 28 Lebanese restaurants, six of which
are franchised, based predominately in the UK. The flagship brand of the
group, Comptoir Libanais, is a collection of 22 restaurants located across
London, nationwide and international Travel Hubs, including cities such as
Manchester, Bath, Birmingham, Oxford and Dubai.
The name Comptoir Libanais means Lebanese Counter and is a place where guests
can eat casually and enjoy Middle Eastern and North African food, served with
warm and friendly hospitality and a bright vibrant environment.
The Group also operates Shawa, serving traditional shawarma through a counter
service model in Westfield and Bluewater shopping centres [as well as Zayed
International Airport]. Yalla-Yalla near Oxford Circus, and a live
entertainment venue Kenza, located in Devonshire Square, London.
The group has expanded internationally with its franchise partners HMSHost,
with restaurants in the UK, the Netherlands and the Middle East.
Chief Executive's Review
The Group started 2023 with good momentum, despite the economic headwinds
affecting the industry as a whole.
Our strategy to grow through organic sales, new openings and franchising is
bearing fruit and I am pleased to report that each strand of these strategic
pillars grew in the last year. Whilst our group revenue grew, our costs
increased as a result of food cost inflation, a further increase in the
minimum wage and, for a period, energy bills that were three times that of
years previous. We were also significantly impacted by 30 days of strikes on
rail and the London underground in 2023, which we estimate represents lost
income of c. £300,000.
With the support of the Board, we have strengthened our senior leadership
team, bringing in highly experienced colleagues who will help shape our
culture and build on our operational excellence and financial performance. We
successfully opened a new Comptoir Libanais in Ealing during the period, which
is trading in line with expectations, and we opened a prominent site on
London's Southbank in April 2024.
Total like for like system sales grew +3.0% in 2023 over 2022. Within this,
our equity restaurants delivered like for like growth of +1.3%. Despite this
growth, increasing covers proved a challenge during the year, against a
backdrop of increasing mortgage rates and rent rises, but we are pleased that
cover performance trend has improved in Q1 of 2024.
Despite facing pricing challenges, we have effectively managed price increases
for guests through strategic menu engineering and leveraging benefits from our
supply chain efficiencies. As a result of our recent consolidation of
distribution and our strong relationships with suppliers, we have been able to
minimise the impact of margin erosion to 0.2%.
While energy costs remained high for the majority of the year, particularly
after the government's support was withdrawn, in the fourth quarter of the
year we transitioned to a two year flexible pricing model, delivering the best
unit costs currently available.
People, Values and Culture
We continually strive to create a culture and work environment that attracts
motivated employees who feel recognised and rewarded for their efforts.
We are proud of the progress we have made in our gender pay gap and we now
have a Median Pay Gap in favour of our female colleagues, together with strong
representation in our senior leadership team. We have had a fair tronc scheme
to distribute our service charge for a number of years with only small changes
required to comply with the new legislation. It is clear that to succeed in
difficult times you need to not only be great at fantastic food and brilliant
environments, but deliver on hospitality as well and our people and our
culture are a huge asset.
Technology
Investing in technology has been crucial for enhancing guest service and
supporting ongoing projects to streamline labour efficiency. Our successful
trial and ongoing rollout of Kitchen Display Screens (KDS) have improved
service speed and reduced guest complaints. The majority of our restaurants
have adopted tablet ordering for our teams and we have integrated our payment
systems which has increased efficiency of taking orders and expediates table
turnover during peak times. We continue to work with our digital ordering
platform to improve functionality for our guests.
Guest Satisfaction
In 2023, we made significant investments to improve our guest service scores.
Historically our guests have always appreciated our fresh, healthy and
delicious food offerings, and bright, bold and eclectic interiors but felt our
hospitality fell short compared to leaders in the sector. To address this, we
have implemented a 'Generous Hospitality' programme, retraining each team
member to understand what it takes to make a positive impact on our guest's
experience. As a result of these efforts, our Net Promoter Score (NPS) has
increased to 74% and our social score has also improved throughout the year.
Guest understanding
As a result of a variety of qualitative and quantitative research we now have
a far better understanding of Comptoir Libanais' guests, what they think of
us, how often they visit and how we best communicate with them to increase
frequency of visit and spend.
To facilitate these improvements, we have made changes to our website, CRM
partners, booking platform and digital agency and can track return on
marketing investment much better than previously through use of personalised
communication.
Franchising
Franchising is an integral part of the Group's strategy. In 2023 Comptoir
Libanais system sales totalled £35m, with 65% originating from our equity
estate and 35% from franchisees. In early 2024, we took back the Avolta
franchised site in Cheshire Oaks as they refocus on travel hub operations.
Simultaneously, we opened a new Shawa restaurant in Zayad International
Airport, our first restaurant in Abu Dhabi and first franchised Shawa
restaurant.
During the year we signed a new partnership with AREAS, a global travel hub
food operator, and are on track to open in Milan airport this summer. With the
robust performance of existing sites and recent openings trading well we will
be looking to grow the number of our franchise partnerships and restaurants.
Delivery platforms
The enhancement of our delivery services including delivery menu, dish
presentation, packaging and working with our delivery partners on strong ROI
promotional activity has led to delivery performing well in 2023, particularly
within Comptoir Libanais. As part of the Group's growing commitment to its
responsibilities across all areas of ESG, we have ensured all of our delivery
packaging is recyclable.
Outlook
The hospitality industry has been significantly impacted by a maelstrom of
economic factors which have influenced guests spending habits and led to
higher operational costs. I expect it will take a further 2-3 years before we
can adjust pricing sufficiently to fully return to pre-Covid EBITDA margins.
Nonetheless, we made progress with cost reductions in the latter part of 2023,
particularly in energy management, and have continued this momentum into 2024.
I am particularly excited by the work we have done to better understand our
guests and our market position in Comptoir Libanais which together with our
focus on consistency in food quality and hospitality has delivered like for
like sales growth in Q1 and increasing guest satisfaction.
In order to focus management's time on growth brands we have streamlined Yalla
Yalla's operations by closing a location that doesn't align with our future
business ambitions at its lease end and aligning back of house systems in the
remaining restaurant to gain operational efficiencies.
Shawa continues to present a significant growth opportunity, with existing
sites performing well and encouraging early results from our franchise
location in Abu Dhabi.
The focus for the rest of 2024 and into 2025 remains on growing covers both
through our improved understanding and connection with existing guests
increasing their frequency of return and encouraging trial by new guests.
Across the group we continue to work on menus, labour efficiencies and cost
management to improve the Groups EBITDA delivery to compelling numbers. We
have confidence that our strategy will deliver top line growth, improved
margins and improved profitability that will enable us to continue our new
opening plans.
Finally, I would like to thank all my colleagues for their contributions to
re-starting the growth within the Group and their efforts to navigate external
pressures. Comptoir Group has strong foundations with its current estate, a
robust cash position and an excellent team.
I look forward to further growth and success for the business in the years
ahead.
Nick Ayerst - Chief Executive Office
21(st) May 2024
2023 Financial Highlights - Interim FD Review
Overview
A solid year for the group, underpinned by sales growth and a proactive
response to external cost challenges.
Comptoir Group retains a strong cash position following a transformative year,
as we continued to set the business up for future success. We are now in a
good position to prosper from new openings, a return to consumer confidence
and a softening in the rate of cost base increases.
The Group delivered positive adjusted EBITDA, despite the considerable impact
of cost increases. By focusing on the things within leaderships control, we
were able to generate solid cash from operations. This positions Comptoir
Group to be best placed to serve guests, when the macroeconomic uncertainty
reduces, and consumers are ready to dine out.
The KPIs of the Group's performance are summarised below:
31 December 1 January Variance
2023
2023
Revenue £31.5m £31.0m 1.4%
Gross profit £24.7m £24.4m 1.1%
Other Costs £26.3m £23.9m 10.3%
(Loss)/profit for the period -£1.6m £0.6m -371.9%
Cash generated from operations £2.3m £4.4m -47.6%
Adjusted EBITDA (Pre IFRS 16) 1 £0.1m £2.8m -97.8%
Net Cash2 £5.4m £7.7m -29.5%
1 Defined as statutory operating profit before interest, tax, depreciation
and amortisation (before application of IFRS16 and excluding exceptional
costs) and reflects the underlying trade of the Group.
2 Defined as cash and cash equivalents less loans and borrwings.
Revenue
Revenue of £31.5m, from £31.0m in 2022 was a growth of +1.4%. This was
despite Q1 2022, benefitting from lower VAT rates as one of the final support
hangovers put in place through the global pandemic ended at the end of March
2022.
The group entered 2023 with 21 equity restaurants, with Leeds closing in
January 2023, offset by opening of Ealing in October 2023, taking the equity
estate back up to 21. Our franchised estate of 6 restaurants traded
consistently throughout 2023.
Including franchise and equity restaurants, total system revenues of £42.4m
(2022: £39.8m) were delivered through 2023.
Gross profit
The team worked very closely with our supply partners through 2023 and made
some huge steps forward
in optimising our cost base, yet with cash margin increasing by +1.1%, from
revenue growth of +1.4%, the benefit is not instantly obvious until you factor
in the significant double digit (up to 20% at its peak) food inflation that
has been absorbed within this.
These factors manifested the modest downward movement in Gross Margin
percentage from 78.7% in 2022 to 78.5%, a 0.2% reduction.
However, if 2022 had not benefitted in Q1 from a reduced VAT rate of 12.5%,
year on year total Gross Margin percentage in 2023 would have been a +0.1%
improvement over 2022, despite the cost base increases.
Other costs
It was a turbulent year for all other costs throughout 2023 for the reasons
already mentioned earlier in this report, with Comptoir Group not being immune
from those external factors.
Most significantly impacting the business was the huge, unprecedented increase
in utility costs which more than doubled with a 129% increase versus 2022, a
UK wide phenomena, together with the unwinding of business rates relief, which
increased costs by 21% versus prior year.
Other notable fixed costs also saw increases, with rent growing by 15% as we
secured longer term tenures,
and corporate cost increases in Head Office and Plc costs associated with
rebuilding and re-establishing a new Board and senior leadership team. All
combined our cost base increased by more than +10%.
The outlook will see food inflation drop to below double digits in the first
quarter of 2024 expecting to settle
at between 7%-8% for the balance of 2024. Whilst proactive action has already
been taken to de-risk utility costs by contracting through to Autumn 2025 with
options being explored into future years.
Adjusted EBITDA
Post IFRS 16 Pre IFRS 16 Post IFRS 16 Pre IFRS 16
31 December 31 December 1 January 1 January
2023
2023
2023
2023
£ £ £ £
Sales 31,480,609 31,480,609 31,046,546 31,046,546
Adjusted EBITDA:
(Loss)/profit before tax (1,645,105) (1,410,764) 902,450 578,609
Add back/(deduct):
Depreciation 3,328,567 1,124,210 3,252,841 1,124,243
Finance costs 1,019,154 136,551 1,042,697 94,078
Finance income (94,147) (94,147) - -
Impairment of assets 107,316 - 78,266 -
EBITDA 2,715,785 (244,150) 5,276,254 1,796,930
Share-based payments expense 30,541 30,541 15,377 15,377
Restaurant opening costs 165,535 165,535 - -
Loss on disposal of fixed assets 8,940 8,940 8,188 8,188
Exceptional legal and professional fees 101,145 101,145 1,002,054 1,002,054
Adjusted EBITDA 3,021,946 62,011 6,301,873 2,822,549
Cash flow and balance sheet
Cash generated from operations decreased to £2.3m in FY23 (2022: £4.4m).
Despite marginal gross profit improvements macroeconomic pressures on
utilities, wages, rent and rates squeezed operating profit margins, along with
the majority of the UK operating companies. Coupled with additional
expenditure on property, plant and equipment increased as the Group invested
in the estate and to the improvement of technology.
Financing and net debt
The Group had a cash and cash equivalents balance of £7.0m on 31 December
2023 and a net cash position of £5.4m (2022: £7.7m). The Group debt consists
of a CBIL loan attracting no covenants, of which £0.6m was paid down through
2023. This has a six-year term with a maturity date in 2026. The loan had an
initial interest-free period of 12 months followed by a rate of interest of
2.5% over the Bank base rate.
Throughout 2023, the group started to proactively manage its positive cash
balances to generate interest earned and reduce interest paid, compared to
prior years.
Impairments
Impairment cost in the period related to the lease exit of Yalla Yalla in
Soho.
Dividend
The Directors do not recommend the payment of a dividend, believing it more
beneficial to use cash resources to invest in the Group in line with our
strategy.
Going concern
Upon consideration of this analysis and the principal risks faced by the
Group, the Directors are satisfied that the Group has adequate resources to
continue in operation for the foreseeable future, a period of at least twelve
months from the date of this report. Accordingly, the Directors have concluded
that it is appropriate to prepare these financial statements on a going
concern basis.
Peter Harvey - Interim Finance Director
21(st) May 2024
Strategic Report
For the period ended 31 December 2023
At a glance
Comptoir Group is a dynamic, bold and innovative hospitality company committed
to delivering exceptional hospitality experiences that celebrate the rich
cultural heritage of Lebanon, the wider Middle East, and North Africa.
With a passion for our food and a focus on quality ingredients our restaurants
offer an authentic taste
of the regions diverse and vibrant cuisine. We are dedicated to providing
outstanding guest hospitality by creating a unique welcoming and inviting
atmosphere that not only transports our guests to a happy place it also
encourages our guests to want to come back time and time again.
Our Vision is that one day Lebanese food and culture will be as widely
understood and enjoyed as Italian is today by sharing our love of the regions
food and culture with the wider world. We do this through our Mission of
spreading the Lebanese joy of sharing one plate at our time all under pinned
by living our Values,
of Togetherness, Freshness, Happiness and Generosity.
We operate a collection of complementary brands, the largest of which is
Comptoir Libanais, founded 15 years ago by Tony Kitous, a serial restaurant
entrepreneur within our chosen marketplace.
The Directors present their strategic report for the period ended 31 December
2023.
Business model
The Group's principal brand is Comptoir Libanais, a Lebanese, Middle Eastern
and North African focused casual dining brand. The restaurants offer an
all-day dining experience based around healthy and fresh food in a friendly,
colourful and vibrant environment, which delivers value for money to a broad
demographic of guests. Lebanese and Eastern Mediterranean food is a popular
food trend due to its flavoursome, healthy, low fat and vegetarian-friendly
ingredients as well as the ability to easily share the food with friends.
We seek to design each Comptoir Libanais restaurant with a bold and fresh
design that is welcoming to all age groups and types of consumers. Each
Comptoir Libanais restaurant has posters and menus showing an artist's
impression of Sirine Jamal al Dine, an iconic Arabian actress, providing a
Middle Eastern café-culture feel.
Shawa is a Lebanese shawarma grill concept-serving lean, grilled meats,
rotisserie chicken, homemade falafel, halloumi and fresh salad, through a
service counter offering, located in high footfall locations, such as shopping
centres.
The average net spend per head over 2023 at Comptoir Libanais was £20.21
(2022: £19.22) and the average spend at Shawa is lower at £14.32 (2022:
£13.61), positioning our offering in the affordable or 'value for money'
segment of the UK fast casual dining market. In addition, our offering is
well-differentiated and faces limited direct competition, in marked contrast
to other areas of the market.
Strategy for growth and future developments
Our strategy is to continue to grow through organic sales increase and
increasing our owned-site operations under both the Comptoir Libanais and
Shawa brands. While Comptoir Libanais is likely to remain the principal focus
of our operations, Shawa provides the opportunity to offer our Lebanese food
from a smaller footprint and therefore create greater flexibility to our
roll-out plans.
We continue to believe that there is considerable potential to grow the
Group's franchised operations
and we see this as a complimentary and relatively low-risk route to extend the
presence of our brands, both within the UK and in overseas territories. We saw
the opening of another site with our franchise partner Avolta in Abu Dhabi in
Q1 2024 and with our new partner AREAS a new Comptoir Libanais site Milan is
expected to open in H2 2024, evidencing our belief in this route to market.
We seek to maximise the dining experience in all our restaurants with alfresco
and dine-in experiences as well as the UK delivery market. This is combined
with the use of technology to ensure we deliver the speed, service and
hospitality that guest require.
Review of the business and key performance indicators (KPIs)
The continuing macro-economic pressures, high inflation, cost of living crisis
and loss of government support versus 2022 at the end of the first quarter
continued to challenge the performance of the Group and was reflected in the
comparison to the 'supported' 2022 outturn. As a result, Group revenue showed
moderate growth of 1.4% at £31.5m (2022: £31.0m) and the Consolidated
Statement of Comprehensive Income shows a post-tax loss of £1.6m (2022:
£0.6m profit). However, as stated above, at this stage in the development of
the business the Board believes that it is more helpful to focus on adjusted
EBITDA, which excludes non-recurring items and costs incurred in connection
with the opening of new restaurants and on this measure, the underlying
earnings of the group were £0.1m profit (2022: £2.8m), despite the economic
and global uncertainties, and sector specific pressures described elsewhere in
this report.
The Board and management team use a range of performance indicators to monitor
and measure
the performance of the business. However, in common with most businesses, the
critical KPI's are focused on growth in sales and EBITDA, and these are
appraised against budget, forecast and the levels achieved last year.
In terms of non-financial KPIs, the standard of service provided to customers
is monitored via the scores from a programme of regular monthly "mystery
diner" visits to our restaurants carried out by HGem, providing a Q4 Net
Promotor Score (NPS) of 74% (Q1 2023 was 32%).
We also use feedback from health and safety audits conducted by an external
company (Food Alert) to ensure that critical operating procedures are being
adhered to.
Further explanation of the performance of the business over the period is
provided in the Chair's Statement and the Chief Executive's Review.
Principal risks and uncertainties
The Board has overall responsibility for identifying the most significant
risks faced by the business and for developing appropriate policies to ensure
that those risks are adequately managed. The following have been identified as
the most significant risks faced by the Group, however, it should be noted
that this is not an exhaustive list and the Group has policies and procedures
to address other risks facing the business.
Consumer demand
Any weakness in consumer confidence could have an adverse effect on footfall
and guest spend in our restaurants. The previously reported impact of Covid-19
virus demonstrated the significant impact on the hospitality sector and the
wider UK and global economy, on the devastating impact all in the industry
felt, and whilst we were looking forward to a period of normality and return
to business as usual, nobody anticipated the macroeconomic downturn and its
impact on customer confidences through uncertain times.
Frequent or regular participation in the eating-out market is afforded by the
consumer out of household disposable income. Macroeconomic factors such as
employment levels, interest rates and inflation can impact disposable income
and consumer confidence can dictate their willingness to spend.
Through such times the Board focussed on setting the business up to maximise
profitable revenue when the confidence returns for consumers. As indicated
above, the core brands within the Group are positioned in the affordable
segment of the casual dining market. A strong focus on superior and attentive
service together with value-added marketing initiatives can help to drive
sales when guest footfall is more subdued. This, together with the strategic
location of each of our restaurants helps to mitigate the risk of consumer
demand to the business.
Input cost inflation
The Group's key input variables are the cost of food and drink, associated
ingredients and the sizable and progressive increases in the UK National
Living Wage and Minimum Wage rates continue to present a challenge which we
face into alongside our peers and competitors, as we strive to help our team
deal with recent years cost of living crisis. We aim to maintain an
appropriate level of flexibility in our supplier base so we can work to
mitigate the impact of input cost inflation. Our teams work hard on predictive
and responsive labour scheduling so that our costs are well controlled.
Economic conditions
The war in the Ukraine has direct consequences on the cost of fuel and will
also impact various
food staples over the next 12 months that continues to require proactive
management.
The pressure of the cost-of-living crisis on living standards and subsequent
deterioration in consumer confidence due to future economic conditions have a
detrimental impact on the Group in terms of footfall and sales. This risk is
mitigated by the positioning of the Group's brands, within the affordable
segment of the casual dining market. Continued focus on customer relations and
targeted and adaptable marketing initiatives help the Group retain and drive
sales where footfall declines.
Labour cost inflation
Labour cost pressures that are outside of the control of the Group, such as
auto-enrolment pension costs, National Minimum Wage and Living Wage increases,
Employee and Employer NI increases, and the apprenticeship levy, are endured
by the Group and its competitors. Labour costs continue to be regularly
monitored and ongoing initiatives are used to reduce the impact of such
pressures.
Strategy and execution
The Group's central strategy is to open additional new outlets under its core
Comptoir Libanais and Shawa brands. Despite making every effort, there is no
guarantee that the Group will be able to secure a sufficient number of
appropriate, economically affordable sites to meet its growth and financial
targets and it is possible that new openings may take time to reach the
anticipated levels of mature profitability or to match historical financial
returns.
The Group utilises the services of external property consultants and continues
to develop stronger contacts and relationships with potential landlords as
well as their agents and advisers. However, there will always be competition
for the best sites and the Board will continue to approach any potential new
site with caution and be highly selective in its evaluation of new sites to
ensure that target levels of return on investment are achieved.
On behalf of the Board
Nick Ayerst - Chief Executive Office
21(st) May 2024
Strategic Report
Climate Related Financial Disclosure
Energy Consumption and Carbon Emissions
Comptoir Group PLC have included the recommendations set out by the Task Force
on Climate change (TCFD) in this year's report. These recommendations help
businesses to focus on the likely direct and indirect impacts of climate
change for individual organisations, their operations, services and customer
base.
The TCFD framework utilises four key pillars which have been adopted by
Comptoir Group as the key areas of focus. Aligned to these four pillars are 11
recommendations, which provide guidance as to how to ensure that management
processes, analyses and business planning give sufficient consideration to the
impact of climate change on the operation.
Greenhouse gas emissions and energy use data for the period ended 31 December:
Annual Energy Consumption (KWh) Current Reporting Year, 01/01/2023 - 31/12/2023 Comparison Year, 01/01/2022-31/12/2022
£ £
Scope 1 2,381,158 2,682,126
Stationary Combustion 2,317,934 2,617,319
Mobile Combustion 63,224 64,807
Process Emissions N/A N/A
Fugitive Emissions N/A N/A
Scope 2 2,514,088 2,734,638
Purchased Electricity 2,514,088 2,734,638
Purcahsed Steam, Heat, Cooling 0 0
Scope 3 (Grey Fleet) 19,230 56,636
Grey Fleet 19,230 56,636
Total 4,914,477 5,473,397
Governance
The CEO has ultimate responsibility for ESG. Comptoir Group PLC has appointed
an ESG Committee, which meets quarterly to assess climate risk and
opportunities and to set strategy and targets to address said risks and
opportunities. The Chair, non-Exec Director, CFO and CEO sit on the ESG
committee.
The ESG committee prioritises the response to potential climate related risks
& opportunities, depending on the potential magnitude, likely financial
impact and opportunities to adopt mitigation practices. Detailed updates on
ESG are included in the monthly report to the board.
To deliver our targets, 8 cross functional working groups meet quarterly. They
are tasked with ensuring ESG goals are embedded into all aspects of our
business.
Strategy
To identify actual and potential impacts of climate- related risks and
opportunities on the organisation's processes, strategy, and financial
planning, Comptoir Group embarked on an audit in conjunction with the
Sustainable Restaurant Association (SRA). This took the form of a detailed
investigation on all operations which has enabled Comptoir Group to identify
potential risks & opportunities and set realistic goals for improvement.
We have assumed a climate transition scenario of 2OC, in line with guidance
provided by the Department of Business, Energy & Industrial Strategy. A
rise in global temperatures of around 2OC will likely increase the number of
severe weather events, such as flood and droughts, impacting the world's main
food producing regions. Under this climate transition scenarios, we have
identified the following potential risks.
Short term (less than two years):
· Supply chain disruption and shortages of impacted crops: we
source salad, citrus, chillis, aubergine and pomegranates from regions which
are potentially at risk in the case of a temperature increase of 2OC. This
would impact around £400k worth of stock (equivalent to 7% of all food spend)
· Higher energy costs due to increased demand for artificial
heating/cooling and irrigation
Medium term (two-five years)
· Potential changes to statutory obligations regarding waste
disposal
· The Department for Business, Energy and Industrial Strategy has
calculated that a carbon tax of £80 per tonne would have the desired impact
on carbon emissions. The liability for Comptoir Group would be in the region
of £80k p.a. based on current emissions levels, if this was introduced
· Increased competition for new sites which offer public transport
accessibility, infrastructure resilience in the light of extreme weather
events, and access to renewable energy
Long term (more than five years)
· Infrastructure and buildings will require increased investment to
withstand changing weather patterns and an increase in extreme weather events,
particularly flooding
· Weather related travel disruption impacting customers and staff
· Increased requirement for HVAC in warmer weather reduced use of
terraces and outdoor areas due to increased rainfall in UK
Comptoir Group have also identified the following opportunities:
· Comptoir's operations exhibit low wastage methods of production,
careful stewardship of specialist producers and natural, unprocessed foods
which will increasingly appeal to a growing cohort of eco conscious consumer
· Our menus have a strong emphasis on plant based food. More than
half of the menu items across
all brands are plant based, without any ultra processed ingredients
· We source specialist ingredients from smaller, low intensity
producers who prioritise the preservation of local ecosystems, thus enhancing
long term opportunities for sustainable sourcing
· We are building stronger relationships with suppliers who can
switch to lower carbon methods of production and transportation
· We have allocated capex for investment in technology, such as
voltage optimisation and energy monitoring devices to reduce the amount of
energy used
The consideration of climate related risks & opportunities is integral to
all our decision making. ESG considerations are now given priority
consideration in all operational decisions, longer term strategy &
financial planning as a matter of course. We will continuously strive to
ensure that the Group remains adaptable, to anticipate and respond to climate
related risks and opportunities.
Specifically:
· Comptoir Group regularly reviews menus and will adapt dishes,
ingredients, cooking methods and menus in response to the changing
availability of inputs
· All menus will consist of at least 50% plant-based dishes,
anticipating an increase in consumer demand
· We regularly review the supply markets, with the aim of
anticipating potential shortages and supply chain disruption. By adopting
creative and flexible sourcing strategies, we can adapt quickly in the short
term to ensure long term supply resilience
· Financial planning allows for investment in equipment, building
design, infrastructure and processes to reduce reliance on fossil fuels
· Budgeting processes and longer term business strategy allow for
changes in consumer behaviour
in response to changes in long term weather patterns, such as reduced use of
outdoor seating areas
Risk Management
We regularly review global supply markets with our suppliers to identify any
potential risks to the supply chain, including financial risks. Increasingly,
we choose supply partners which prioritise anticipation of and adaptation to
climate related risks & opportunities in the medium to long term.
In conjunction with the Sustainable Restaurant Association (SRA) and other
industry bodies, Comptoir Group keeps abreast of potential changes to the
regulatory environment.
As well as anticipating and reacting to changes in global supply conditions,
supply chain risk is also assessed during the twice yearly menu review
process. If required, menus/ dishes/ ingredients can be adapted or alternative
supply sources mobilised
Physical risks to buildings and infrastructure are assessed during the process
of site selection and as part of the capex budgeting process.
Financial risks regarding the increased costs of inputs and outputs are
assessed during the annual budgeting process and re-evaluated in response to
changing market conditions, as required. We also have targets for reducing
energy usage and waste, which will minimise any potential cost uplift.
Comptoir Group have made it a priority to assess and manage climate related
risk. We have a flexible and dynamic approach to menu engineering and
ingredient sourcing. Where climate change poses a risk to ingredient
availability, we will quickly adapt dishes, ingredients or supply chains to
mitigate any risk. We are working hard to lower our carbon emissions and
energy usage, which will further increase our resilience in the case of
increased taxation or costs associated with energy.
Metrics & Targets
Comptoir Group are awaiting the final outcome of the ESOS audit, which will
identify Scope 1 emissions and set out targets for reduced Carbon emissions
(due June 2024).
Comptoir Group has set a target for achieving 2 stars on the 'Food Made Good'
rating, awarded by the Sustainable Restaurant Association (SRA), a global
industry body established to promote & support organisations who aim to
have a more positive impact on the environment and society.
The 'Food Made Good' rating uses a framework of questions, which are derived
from the 10 key areas
of the UN's Sustainable Development Goals to audit all operational processes
and systems. Performance against these criteria is then assessed and awarded
an overall rating. In 2023 Comptoir Group was awarded
1 out of 3 stars. We have implemented a roadmap which will address all areas
and ultimately improve our rating by one star by August 2025. In addition, we
have set ourselves the following targets:
· Reduce energy usage by 10% LFL by the end of 2024 - measured by
Cap Energy monitoring devices and Amber (energy brokers)
· Reduce food wastage by 20% LFL by the end of 2024
· Reduce carbon footprint on meat by 5% by end 2024
· Increase UK sourced product lines
On behalf of the Board
Nick Ayerst - Chief Executive Office
21(st) May 2024
Strategic Report
Section 172 Statement
This is the second year that the Directors are required to provide a section
172 statement as part of the Strategic report. Below we explain the background
to the section 172 statement.
Background
Section 172 of the Companies Act 2006 ('Act') requires the Directors to act in
the way they consider, in good faith, would be most likely to promote the
success of the company for the benefit of its members as a whole, having
regard to various factors, including the matters listed below in section.
172 (1)(a) to (f):
a. the likely consequences of any decisions in the long-term;
b. the interests of the Company's employees;
c. the need to foster the Company's business relationships with suppliers,
customers and others;
d. the impact of the Company's operations on the community and environment;
e. the desirability of the Company maintaining a reputation for high standards
of business conduct and
f. the need to act fairly as between members of the Company.
This statement is 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 has
taken account of any 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 per the below.
S172 Matters Example
· The likely consequences of any decisions in the long-term. · Communication with shareholders through the Comptoir Investor
website, AGM, investor meeting and circulars
· Through the corporate governance framework described in this
annual report
· The interests of the Company's employees · Ongoing training and development at all levels
· Engagement through the company engagement application,
newsletters, emails and other communications tools
· The need to foster the Company's business relationships with · Maintenance of regular contact with all suppliers.
suppliers, customers and others.
· The Comptoir loyalty scheme through the Comptoir application
· Responding to feedback from the customer.
· Use of a mystery guest programme to ensure standards are visible
and maintained.
· The impact of the Company's operations on the community and · Local recruitment of staff
environment.
· Flexible working to reduce travel where applicable
· Ongoing focus on environmentally friendly processes and
procedures
· The desirability of the Company maintaining a reputation for high · Regular restaurant visits and audit processes
standards of business conduct.
· Mystery guest programme
· Food standards programme
· Compliance updates at Board meetings
· Ongoing training for all staff
· The need to act fairly as between members of the Company. · We maintain an open dialogue with our shareholders
· Engagement with stakeholders
On behalf of the Board
Nick Ayerst - Chief Executive Office
21(st) May 2024
Corporate Governance
Statement of Corporate Governance
The Board have elected to adopt the Quoted Companies Alliance (QCA) Corporate
Governance Code in line with the changes under Rule 26 of the AIM Rules for
Companies requiring all companies that are traded on AIM to adopt and comply
with a recognised corporate governance code. Full details of our adoption to
the code can be found at
https://investors.comptoirlibanais.com/corporate-governance/
(https://investors.comptoirlibanais.com/corporate-governance/)
The Board
The Board of Comptoir Group PLC is the body responsible for the Group's
objectives, its policies and the stewardship of its resources. At the balance
sheet date, the Board comprised four Directors being Ahmed Kitous and Nicholas
Ayerst as executive Directors and Beatrice Lafon and Jean-Michel Orieux as
non-executive directors.
Beatrice Lafon and Jean-Michel Orieux are considered by the Board to be
independent. Each Director demonstrates a range of experience and sufficient
calibre to bring independent judgment on issues of strategy, risk management,
performance, resources and standards of conduct which are vital for the
success of the Group.
The Board had twelve Board meetings during the year. Beatrice Lafon is Chair
of the ESG committee, Audit and the Remuneration Committees. The terms of
reference of these committees have been approved by the Board.
Remuneration Committee
The Remuneration Committee's responsibilities include the determination of the
remuneration and options of Directors and senior executives of the Group and
the administration of the Company's option schemes and arrangements. The
Committee takes appropriate advice, where necessary, to fulfil this remit.
Audit Committee
The Audit Committee meets twice a year including a meeting with the auditors
shortly before the signing of the accounts. The terms of reference of the
Audit Committee include: any matters relating to the appointment, resignation
or dismissal of the external auditors and their fees; discussion with the
auditors on the nature, scope and findings of the audit; consideration of
issues of accounting policy and presentation; monitoring. The work of the
review function carried out to ensure the adequacy of accounting controls and
procedures.
Nomination Committee
The Company does not have a Nomination Committee. Any Board appointments are
dealt with by the Board itself.
Internal control
The Board is responsible for the Group's system of internal control and for
reviewing the effectiveness of the system of internal control. Internal
control systems are designed to meet the needs of a business and manage the
risks but not to eliminate the risk of failure to achieve the business
objectives. By its nature, any system of internal control can only provide
reasonable, and not absolute, assurance against material misstatement or loss.
Internal audit
Given the size of the Group, the Board does not believe it is appropriate to
have a separate internal audit function. The Group's systems are designed to
provide the Directors with reasonable assurance that problems are identified
on a timely basis and are dealt with appropriately.
Relations with shareholders
There is a regular dialogue with investors, including presentations after the
Group's year-end and half year results announcements. Feedback from
shareholders is provided to the Board on a regular basis and, where
appropriate, the Board will take steps to address their concerns and
recommendations. Aside from announcements that the Group makes periodically to
the market, the Board uses the Annual General Meeting to communicate with
shareholders and welcomes their participation.
Going concern
In assessing the going concern position of the Group for the consolidated
financial statements for the year ended the 31 December 2023, the Directors
have considered the Group's cash flow, liquidity and business activities.
Following the Covid-19 pandemic, the economic environment and its impact on
guest confidence to spend has been considered as part of the Group's adoption
of the going concern basis. Although trading was impacted over this period,
the Group's underlying trading remained positive, and we've continued with
selective investment to continually be able to embrace market growth.
The Group maintains good cash reserves of £7.0m as at the start of the
current accounting period, which sets us apart from many other operators in
our sector.
The Directors have considered the current business model, strategies and
principal risks and uncertainties. Based on the Group's cash flow forecasts
and projections, the Board is satisfied that the Group will be able to operate
for the foreseeable future. In making this assessment, the Directors have made
a specific analysis of the impact of current macro-economic uncertainties and
global disruption in the middle East as well as the Ukraine.
The Group's current cash reserves remains at £7.0m, and the Board believes
that the business has the ability to remain trading for a period of at least
12 months from the date of signing of these financial statements. These
financial statements have therefore been prepared on the going concern basis.
Corporate Governance
Report of the Directors
The Directors present their report together with the audited financial
statements for the period ended 31 December 2023.
Results and dividends
The consolidated statement of comprehensive income is set out on page 47 and
shows the profit for the year.
The Directors do not recommend the payment of a dividend for the year (2022:
£nil).
Principal activities
The Company's and Group's principal activity continues to be that of the
operating of restaurants with Lebanese/Middle Eastern offering in the UK
casual dining sector.
Directors
The Directors of the Group, who held office during the year, and their
shareholding at the year-end date, were as follows:
Number of ordinary shares Percentage shareholding (%)
Executive
N Ayerst - 0.00%
A Kitous 58,412,503 47.60%
B Lafon - 0.00%
JM Orieux - 0.00%
M Toon - 0.00%
Substantial shareholders
Besides the Directors, other substantial shareholders (with a greater than 3%
shareholding) at the period-end date were as follows:
Substantial shareholdings:
Number of ordinary shares Percentage shareholding (%)
C Hanna 22,585,833 18.41%
Dowgate Wealth Limited 11,088,353 9.04%
S Kaye 5,076,666 4.14%
A Kaye 4,873,332 3.97%
J Kaye 4,249,999 3.46%
Directors' remuneration
The remuneration of the Directors for the period ended 31 December 2023 was as
follows:
Period ended 31 December 2023 Period ended 1 January 2023
Remuneration Pension Total Total
£ £ £ £
N Ayerst 240,300 1,321 241,621 50,210
A Kitous 193,125 1,321 194,446 337,993
B Lafon 65,000 - 65,000 27,303
JM Orieux 45,600 - 45,600 19,197
M Toon (Resigned 5 March 2024) 157,727 1,321 159,048 124,007
C Hanna (Resigned 2 August 2022) - - - 997,254
701,752 3,963 705,715 1,555,964
Creditor payment policy
The Group has a standard code and also agrees specific individual terms with
certain suppliers. Payment is normally made in accordance with those terms,
subject to the suppliers' own performance.
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. These include engagement at office town
hall meetings in person and online, induction days for new starters and weekly
communications to all staff highlighting key messages for that week. The
company also utilises
a company called Fourth which provides a service that acts as a central hub to
provide regular updates as well as engage with employees in a more informal
environment and share success stories. The company also operates a bonus and
share scheme at varying levels to reward performance.
Financial instruments
Details of the use of financial instruments and the principal risks faced by
the Group are contained in note 25 to the financial statements.
Future developments
Details of future developments are contained in the Strategic Report on page
25.
Auditors
All 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.
UHY Hacker Young 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
Nick Ayerst - Chief Executive Office
21(st) May 2024
Corporate Governance
Statement of Directors' responsibilities
The Directors are responsible for preparing the Annual Reports and the Group
and Parent Company financial statements in accordance with applicable United
Kingdom law and regulations. Company law requires the Directors to prepare
Group and Parent Company financial statements for each financial period. Under
that law, and as required by the AIM rules, the Directors have elected to
prepare Group financial statements under UK- adopted International Accounting
Standards (IASs), and the Parent Company financial statements under United
Kingdom Accounting Standards.
Under Company Law the Directors must not approve the Group and Parent Company
financial statements unless they are satisfied that they give a true and fair
view of the state of affairs of the Group and Parent Company and of the profit
or loss of the Group for that period. In preparing the Group and Parent
Company financial statements the Directors are required to:
· present fairly the financial position, financial performance and
cash flows of the Group and Parent Company;
· select suitable accounting policies in accordance with IAS 8:
'Accounting Policies, Changes in Accounting Estimates and Errors' and then
apply them consistently;
· present information, including accounting policies, in a manner
that provides relevant, reliable, comparable and understandable information;
· make judgments and estimates that are reasonable;
· provide additional disclosures when compliance with the specific
requirements in UK adopted international accounting standards is insufficient
to enable users to understand the impact of particular transactions, other
events and conditions on the Group's and the Company's financial position and
financial performance; and
· the Group and Parent Company financial statements have been
prepared in accordance with UK adopted international accounting standards or
United Kingdom Accounting Standards, subject to any material departures
disclosed and explained in the financial statements
The Directors are responsible for keeping adequate accounting records that are
sufficient to show and explain the Group's and Parent Company's transactions
and disclose with reasonable accuracy at any time the financial position of
the Group and Parent Company and enable them to ensure that the Group and
Parent Company financial statements comply with the Companies Act 2006. They
are also responsible for safeguarding the assets of the Group and Parent
Company and hence for taking reasonable steps for the prevention and detection
of fraud and other irregularities.
Consolidated statement of comprehensive income
For the period ended 31 December 2023
Notes Period ended 31 December 2023 Period ended 1 January 2023
£ £
Revenue 2 31,480,609 31,046,546
Cost of sales (6,760,622) (6,605,074)
Gross profit 24,719,987 24,441,472
Distribution expenses (12,624,578) (11,431,633)
Administrative expenses (12,866,121) (11,357,436)
Other income 2 50,614 292,744
Operating (loss)/profit 3 (720,098) 1,945,147
Finance costs 6 (1,019,154) (1,042,697)
Finance income 6 94,147 -
(Loss)/profit before tax (1,645,105) 902,450
Taxation charge 7 45,674 (314,146)
(Loss)/profit for the period (1,599,431) 588,304
Other comprehensive income - -
Total comprehensive (loss)/income for the period (1,599,431) 588,304
Basic (loss)/earnings per share (pence) 8 (1.30) 0.48
Diluted (loss)/earnings per share (pence) 8 (1.30) 0.48
All of the above results are derived from continuing operations. (Loss)/Profit
for the period and total comprehensive (loss)/income for the period is
entirely attributable to the equity shareholders of the Group.
Consolidated balance sheet
At 31 December 2023
Notes 31 December 2023 1 January
2023
£ £
Assets
Non-current assets
Intangible assets 9 7,284 29,134
Property, plant and equipment 10 6,771,722 6,708,383
Right-of-use assets 10 13,008,673 13,704,427
19,787,679 20,441,944
Current assets
Inventories 12 521,488 474,655
Trade and other receivables 13 1,344,710 1,220,053
Cash and cash equivalents 7,048,757 9,930,323
8,914,955 11,625,031
Total assets 28,702,634 32,066,975
Liabilities
Current liabilities
Borrowings 15 (600,000) (600,000)
Trade and other payables 14 (5,964,996) (6,399,675)
Lease liabilities 26 (2,159,265) (2,351,410)
(8,724,261) (9,351,085)
Non-current liabilities
Borrowings 15 (1,000,000) (1,600,000)
Provisions for liabilities 16 (389,147) (362,088)
Lease liabilities 26 (15,178,055) (15,728,066)
Deferred tax liabilities 17 (226,292) (271,967)
(16,793,494) (17,962,121)
Total liabilities (25,517,755) (27,313,206)
Net assets 3,184,879 4,753,769
Equity
Share capital 18 1,226,667 1,226,667
Share premium 10,050,313 10,050,313
Other reserves 19 175,640 145,099
Retained losses (8,267,741) (6,668,310)
Total equity 3,184,879 4,753,769
The financial statements of Comptoir Group PLC (company registration number
07741283) were approved by the Board of Directors and authorised for issue on
21 May 2024 and were signed on its behalf by:
Nick Ayerst
Chief Executive Officer
Consolidated statement of changes in equity
For the period ended 31 December 2023
Notes Share capital Share premium Other reserves Retained losses Total equity
£ £ £ £ £
At 3 January 2022 1,226,667 10,050,313 129,722 (7,256,614) 4,150,088
Total comprehensive income
Profit for the period - - - 588,304 588,304
Transactions with owners
Share-based payments 21 - - 15,377 - 15,377
At 1 January 2023 1,226,667 10,050,313 145,099 (6,668,310) 4,753,769
At 2 January 2023 1,226,667 10,050,313 145,099 (6,668,310) 4,753,769
Total comprehensive income
Loss for the period - - - (1,599,431) (1,599,431)
Transactions with owners
Share-based payments 21 - - 30,541 - 30,541
At 31 December 2023 1,226,667 10,050,313 175,640 (8,267,741) 3,184,879
Consolidated statement of cash flows
For the period ended 31 December 2023
Notes Period ended 31 December 2023 Period ended 1 January 2023
£ £
Operating activities
Cash inflow from operations 22 2,287,882 4,368,949
Interest paid (136,551) (94,078)
Interest received 94,146 -
Net cash from operating activities 2,245,477 4,274,871
Investing activities
Purchase of property, plant & equipment 10 (1,279,900) (581,250)
Net cash used in investing activities (1,279,900) (581,250)
Financing activities
Payment of lease liabilities 26 (3,247,143) (3,031,097)
Bank loan repayments 23 (600,000) (600,000)
Net cash used in financing activities (3,847,143) (3,631,097)
(Decrease)/increase in cash and cash equivalents (2,881,566) 62,524
Cash and cash equivalents at beginning of period 9,930,323 9,867,799
Cash and cash equivalents at end of period 7,048,757 9,930,323
Principal accounting policies for the consolidated financial statements
For the period ended 31 December 2023
Reporting entity
Comptoir Group Plc (the "Company") is a company incorporated and registered in
England and Wales, with a company registration number of 07741283. The address
of the Company's registered office is 6th Floor, Winchester House, 259-269 Old
Marylebone Road, London, NW1 5RA. The consolidated financial statements
comprise of the Company and its subsidiaries (together referred to as the
"Group").
Statement of compliance
The consolidated financial statements have been prepared in accordance with
UK-adopted International Financial Reporting Standards and its interpretations
adopted by the International Accounting Standards Board (IASB). The parent
company financial statements have been prepared using United Kingdom
Accounting Standards including FRS 102 'The financial reporting standard
applicable in the UK and Republic of Ireland' and are set out below.
Basis of preparation
These consolidated financial statements for the period ended 31 December 2023
are prepared in accordance with UK-adopted International Accounting Standards.
The accounting period for the Group runs to the closest Sunday to 31 December
each year. The consolidated financial statements for the current period has
been prepared to 31 December 2023 and the comparative period to 1 January
2023.
The financial statements are presented in Pound Sterling (£), which is both
the functional and presentational currency of the Group and Company. All
amounts are rounded to the nearest pound, except where otherwise indicated.
The Group and Parent Company financial statements have been prepared on the
historical cost convention as modified for certain financial instruments,
which are stated at fair value. Non-current assets are stated at the lower of
carrying amount and fair value less costs to sell.
Use of non-GAAP profit and loss measures
The Group believes that along with operating profit, the 'Adjusted EBITDA'
provides additional guidance to the statutory measures of the performance of
the business during the financial year. Adjusted profit from operations is
calculated by adding back depreciation, amortisation, impairment of assets,
finance costs, preopening costs and certain non-recurring or non-cash items.
Adjusted EBITDA is an internal measure used by management as they believe it
better reflects the underlying performance of the Group beyond generally
accepted accounting principles.
Going concern basis
In assessing the going concern position of the Group for the consolidated
financial statements for the period ended the 31 December 2023, the Directors
have considered the Group's cash flow, liquidity and business activities.
Following the Covid-19 pandemic, the economic environment and its impact on
guest confidence to spend has been considered as part of the Group's adoption
of the going concern basis. Although trading was impacted over this period,
the Group's underlying trading remained positive, and we've continued with
selective investment to continually be able to embrace market growth.
The Group maintains good cash reserves £7.0m as at the start of the current
accounting period, which sets us apart from many other operators in our
sector.
The Directors have considered the current business model, strategies and
principal risks and uncertainties. Based on the Group's cash flow forecasts
and projections, the Board is satisfied that the Group will be able to operate
for the foreseeable future. In making this assessment, the Directors have made
a specific analysis of the impact of current macro-economic uncertainties and
global disruption in the middle East as well as the Ukraine.
The Group's current cash reserves remains at £7.0m, and the Board believes
that the business has the ability to remain trading for a period of at least
12 months from the date of signing of these financial statements. These
financial statements have therefore been prepared on the going concern basis.
Changes in accounting standards, amendments and interpretations
At the date of authorisation of the consolidated financial statements, the
following amendments to Standards and Interpretations issued by the IASB that
are effective for an annual period that begins on or after 1 January 2023.
These have not had any material impact on the amounts reported for the current
and prior periods.
Standard or
Interpretation
Effective Date
IFRS 17 - Insurance
Contracts
1 January 2023
IAS 8 - Definition of Accounting Estimates
1 January 2023
IAS 1 - Disclosure of Accounting Policies
1 January 2023
IAS 12 - Deferred Tax Arising from a Single Transaction
1 January 2023
IAS 12 - International Tax Reform - Pillar Two Model Rules
23 May 2023
New and revised Standards and Interpretations in issue but not yet effective
At the date of authorisation of these financial statements, the Group has not
early adopted any of the following amendments to Standards and Interpretations
that have been issued but are not yet effective:
Standard or
Interpretation
Effective Date
IFRS 16 - Lease Liability in a Sale and
Leaseback
1 January 2024
IAS 1 - Non-current Liabilities with
Covenants
1 January 2024
IAS 1 - Classification of Liabilities as Current or Non-current
1 January 2024
IAS 7 - Supplier Finance Arrangements
1 January 2024
IAS 21 - Lack of Exchangeability
1 January
2025
IFRS 18 - Presentation and Disclosure in Financial Statements
1 January 2027
As yet, none of these have been endorsed for use in the UK and will not be
adopted until such time as endorsement is confirmed. The Directors do not
expect any material impact as a result of adopting standards and amendments
listed above in the financial year they become effective.
Significant accounting policies
The accounting policies set out below have been applied consistently to all
periods presented in the historical consolidated financial statements, unless
otherwise indicated.
(a) Basis of consolidation
These financial statements consolidate the financial statements of the Company
and all of its subsidiary undertakings drawn up to 31 December 2023.
Subsidiaries are entities controlled by the Company. Control exists when the
Company has the power, directly or indirectly, to govern the financial and
operating policies of an entity so as to obtain benefits from its activities.
In assessing control, potential voting rights that presently are exercisable
or convertible are taken into account, regardless of management's intention to
exercise that option or warrant. The financial statements of subsidiaries are
included in the consolidated financial statements from the date that control
commences until the date the control ceases.
The cost of an acquisition is measured as the fair value of the assets given,
equity instruments issued and liabilities incurred or assumed at the date of
exchange, plus costs directly attributable to the acquisition. Identifiable
assets acquired and liabilities and contingent liabilities assumed are
measured initially at their fair values at the acquisition date, irrespective
of the extent of any minority interest. The excess of the cost of acquisition
over the fair value of the identifiable net assets acquired is recorded as
goodwill.
All intra-group balances, transactions, income and expenses and profits and
losses resulting from intra-group transactions are eliminated fully on
consolidation. The gain or loss on disposal of a subsidiary company is the
difference between net disposals proceeds and the Group's share of its net
assets together with any goodwill and exchange differences.
(b) Foreign currency translation
Functional and presentational currency
Items included in the financial results of each of the Group entities are
measured using the currency of the primary economic environment in which the
entities operate (the functional currency). The consolidated financial
statements are presented in Pounds Sterling ("£") which is the Company's
functional and operational currency.
Transactions and balances
Foreign currency transactions are translated into the functional currency
using the exchange rates prevailing at the dates of the transactions. Foreign
exchange gains and losses resulting from the settlement of such transactions
and from the translation at year end exchange rates of monetary assets and
financial liabilities denominated in foreign currencies are recognised in the
statement of comprehensive income.
(c) Financial instruments
Financial assets and financial liabilities are measured initially at fair
value plus transactions costs. Financial assets and financial liabilities are
measured subsequently as described below.
Financial assets
The Group classifies its financial assets as 'loans and receivables'. The
Group assesses at each balance sheet date whether there is objective evidence
that a financial asset or a group of financial assets is impaired.
Loans and receivables are non-derivative financial assets with fixed and
determinable payments that are not quoted in an active market. They are
included in current assets, except for maturities greater than 12 months after
the statement of financial position date, which are classified as non-current
assets. Receivables are classified as 'trade and other receivables' and loans
are classified as 'borrowings' in the statement of financial position.
Trade and other receivables are recognised initially at fair value and
subsequently measured at amortised cost using the effective interest method.
The carrying value of trade and other receivables recorded at amortised cost
are reduced by allowances for lifetime estimated credit losses. Estimated
future credit losses are first recorded on the initial recognition of a
receivable and are based on the ageing of the receivable balance, historical
experience and forward looking considerations. Balances that are deemed not
collectable will be recognised as a loss in the income statement. When a trade
receivable is uncollectable, it is written off against the allowance account
for trade receivables. Subsequent recoveries of amounts previously written off
are credited to the statement of comprehensive income.
Financial assets are derecognised when the contractual rights to the cash
flows from the financial asset expire, or when the financial asset and all
substantial risks and rewards are transferred.
Financial liabilities
The Group's financial liabilities include trade and other payables. Trade
payables are recognised initially at fair value less transaction costs and
subsequently measured at amortised cost using the effective interest method
("EIR" method). Amortised cost is calculated by taking into account any
discount or premium on acquisition and fees or costs that are an integral part
of the EIR. The EIR amortisation is included in finance costs in the statement
of comprehensive Income.
A financial liability is derecognised when it is extinguished, discharged,
cancelled or expires.
(d) Property, plant and equipment
Items of property, plant and equipment are stated at cost less accumulated
depreciation and impairment losses.
Depreciation
Depreciation is charged to the income statement on a reducing balance basis
and on a straight-line basis over the estimated useful lives of corresponding
items of property, plant and equipment:
Land and buildings Leasehold Over the length of
the lease
Plant and machinery
15% on reducing balance
Fixture, fittings and equipment 10% on reducing
balance
The carrying values of plant and equipment are reviewed at each reporting date
to determine whether there are any indications of impairment. If any such
indication exists, the assets are tested for impairment to estimate the
assets' recoverable amounts. Any impairment losses are recognised in the
Statement of Comprehensive Income.
The assets' residual values and useful lives are reviewed, and adjusted if
appropriate, at each statement of financial position date. Gains and losses on
disposals are determined by comparing the proceeds with the carrying amount
and are recognised within the Statement of Comprehensive Income.
(e) Intangible assets - Goodwill
All business combinations are accounted for by applying the acquisition
method. Goodwill represents amounts arising on acquisition of subsidiaries,
associates and joint ventures. Goodwill represents the difference between the
cost of the acquisition and the fair value of the net identifiable assets
acquired.
Goodwill is stated at cost less any accumulated impairment losses. Goodwill is
allocated to cash generating units and is formally tested for impairment
annually, thus is not amortised. Any excess of fair value of net assets over
consideration on acquisition are recognised directly in the income statement.
(f) Inventories
Inventories are stated at the lower of costs and net realisable value. Cost
comprises direct materials, and those direct overheads that have been incurred
in bringing the inventories to their present location and condition.
Net realisable value is the estimated selling price less all estimated costs
of completion and costs to be incurred in marketing, selling and distribution.
(g) Cash and cash equivalents
Cash and cash equivalents comprise cash in hand, cash at bank, deposits held
at call with banks and other short-term highly liquid investments with
original maturities of three months or less. Bank overdrafts that are
repayable on demand are included within borrowings in current liabilities on
the balance sheet.
For the purpose of the statement of cash flows, cash and cash equivalents
consist of cash and cash equivalents as defined above, net of outstanding bank
overdrafts.
(h) Share-based payments
The Group's share option programme allows Group employees to acquire shares of
the Company and all options are equity-settled. The fair value of options
granted is recognised as an employee expense with a corresponding increase in
equity. The fair value is measured at grant date and spread over the period
during which the employees become unconditionally entitled to the options. The
fair value of the options granted is measured using the Black-Scholes model,
taking into account the terms and conditions upon which the options were
granted. The amount recognised as an expense is adjusted to reflect the actual
number of share options that vest.
(i) Provisions for liabilities
A provision is recognised in the balance sheet when the Group has a present
legal or constructive obligation as a result of a past event, and it is
probable that an outflow of economic benefits will be required to settle the
obligation.
The amount recognised as a provision is the best estimate of the consideration
required to settle the present obligation at the end of the reporting period,
taking into account the risks and uncertainties surrounding the obligation.
Where the effect of the time value of money is material, the amount expected
to be required to settle
the obligation is recognised at present value using a pre-tax discount rate.
The unwinding of the discount is recognised as a finance cost in the income
statement in the period it arises.
(j) Deferred tax and current tax
Current income tax assets and liabilities for the current period are measured
at the amount expected to be recovered or paid to the taxation authorities. A
provision is made for corporation tax for the reporting period using the tax
rates that have been substantially enacted for the company at the reporting
date.
Current income tax relating to items recognised directly in equity is
recognised in equity and not in the Statement of Comprehensive Income.
Deferred income tax is provided in full on a non-discounted basis, using the
liability method, on temporary differences arising between the tax bases of
assets and liabilities and their carrying amounts in the consolidated
financial statements. Deferred income tax is determined using tax rates (and
laws) that have been enacted or substantially enacted by the statement of
financial position date and are expected to apply when the related deferred
income tax asset is realised or the deferred income tax liability is settled.
Deferred income tax assets are recognised to the extent that it is probable
that future taxable profit will be available against which the temporary
differences can be utilised.
(k) Leases
Right-of-use assets
Right-of-use assets are recognised at the commencement date of the lease
(i.e., the date the underlying asset is available for use). Initially,
right-of-use assets are measured at cost, less any accumulated depreciation
and impairment losses and adjusted for any remeasurement of lease liabilities.
The cost of right-of-use assets includes the amount of lease liabilities
recognised, initial direct costs incurred, and lease payments made at or
before the
commencement date less any lease incentives received. Subsequently,
right-of-use assets are depreciated on a straight-line basis over the shorter
of its estimated useful life and the lease term.
Lease liabilities
At the commencement date of the lease, the lease liabilities recognised are
measured at the present value of lease payments to be made over the lease
term. The lease payments include fixed payments less any lease incentives
receivable, variable lease payments that depend on an index or a rate, and
amounts expected to be paid under residual value guarantees. The lease
payments also include the exercise price of a purchase option reasonably
certain to be exercised by the Group and payments of penalties for terminating
a lease, if the lease term reflects the Group exercising the option to
terminate. The variable lease payments that do not depend on an index or a
rate are recognised as an expense in the period on which the event or
condition that triggers the payment occurs.
In calculating the present value of lease payments, the Group used the
incremental borrowing rate at the lease commencement.
After the commencement date, the amount of lease liabilities is increased to
account for interest and reduced for the lease payments made. In addition, the
carrying amount of lease liabilities is remeasured if there is a modification,
a change in the lease term, a change in the in-substance fixed lease payments
or a change in the assessment to purchase the underlying asset.
The Group elected to apply the practical expedient in relation to amendments
to IFRS 16: Covid-19 Related Rent Concessions. This allows a lessee to account
for any changes to their lease payments due to the effects of Covid-19 in the
Statement of Comprehensive Income rather than be treated as a lease
modification.
The practical expedient was applied consistently to all lease contracts with
similar characteristics and in similar circumstances. A resulting credit will
be recognised as income in the profit and loss for the reporting period
reflecting the changes in lease payments arising from the application of this
practical expedient.
(l) Employee benefits
Short term employee benefits
Wages, salaries, paid annual leave, paid sick leave and bonuses are recognised
as an expense in the period in which the associated services are rendered by
employees.
The Group recognises an accrual for annual holiday pay accrued by employees as
a result of services rendered in the current period, and which employees are
entitled to carry forward and use within 12 months. The accrual is measured at
the salary cost payable for the period of absence.
Pensions and other post-employment benefits
The Group pays monthly contributions to defined contribution pension plans.
The legal or constructive obligation of the Group is limited to the amount
that they agree to contribute to the plan. The contributions to the plan are
charged to the Statement of Comprehensive Income in the period to which they
relate.
Termination benefits are recognised immediately as an expense when the Group
is demonstrably committed to terminate the employment of an employee or to
provide termination benefits.
(m) Revenue
Revenue represents amounts received and receivable for services and goods
provided (excluding value added tax and discounts) and is recognised at the
point of sale. Revenue is recognised to the extent that it is probable that
the economic benefits will flow to the Group and the revenue can be reliably
measured.
Franchise fees from the Group's role as franchisor in the UK and Middle East.
Revenue comprises ongoing royalties based on the sales results of the
franchisee and up-front initial site fees.
(n) Expenses
Variable lease payments
Variable lease payments that do not depend on an index or rate and are not
in-substance fixed payments, such as rental expenses payable based on the
percentage of sales made in the period, are not included in the initial
measurement of the lease liability. These payments are recognised in the
income statement in the period in which the event or condition that triggers
those payments occurs.
Opening expenses
Property rentals and related costs incurred up to the date of opening of a new
restaurant are written off to the income statement in the period in which they
are incurred. Promotional and training costs are written off to the income
statement in the period in which they are incurred.
Financial expenses
Financial expenses comprise of interest payable on bank loans, hire purchase
liabilities and other financial costs and charges. Interest payable is
recognised on an accrual basis.
(o) Ordinary share capital
Ordinary shares are classified as equity. Costs directly attributable to the
increase of new shares or options are shown in equity as a deduction from the
proceeds.
(p) Dividend policy
In accordance with IAS 10 'Events after the Balance Sheet Date', dividends
declared after the balance sheet date are not recognised as a liability at
that balance sheet date and are recognised in the financial statements when
they have received approval by shareholders. Unpaid dividends that are not
approved are disclosed in the notes to the consolidated financial statements.
(q) Commercial discount policy
Commercial discounts represent a reduction in cost of goods and services in
accordance with negotiated supplier contracts, the majority of which are based
on purchase volumes. Commercial discounts are recognised in the period in
which they are earned and to the extent that any variable targets have been
achieved in that financial period. Costs associated with commercial discounts
are recognised in the period in which they are incurred.
(r) Operating segments
An operating segment is a component of an entity that engages in business
activities from which it may earn revenues and incur expenses (including
revenue and expenses related to transactions with other components of the same
entity), whose operating results are regularly reviewed by the entity's Chief
Operating Decision Maker to make decisions about resources to be allocated to
the segment and assess its performance, and for which discrete financial
information is available. The Chief Operating Decision Maker has been
identified as the Board of Executive Directors, at which level strategic
decisions are made.
(s) Government grants
Government grants are recognised at the fair value of the asset received or
receivable when there is reasonable assurance that the grant conditions will
be met and the grants will be received.
A grant that specifies performance conditions is recognised in income when the
performance conditions are met. Where a grant does not specify performance
conditions it is recognised in income when the proceeds are received or
receivable.
Critical accounting judgements and key sources of estimation uncertainty
The preparation of financial statements in conformity with UK-adopted IFRS
requires management to make judgments, estimates and assumptions that affect
the application of policies and reported amounts of assets and liabilities,
income and expenses. The estimates and associated assumptions are based on
historical experience and various other factors that are believed to be
reasonable under the circumstances, the results of which form the basis of
making the judgements about carrying values of assets and liabilities that are
not readily apparent from other sources. The resulting accounting estimates
may differ from the related actual results.
The estimates and underlying assumptions are reviewed on an ongoing basis.
Revisions to accounting estimates are recognised in the period in which the
estimate is revised if the revision affects only that period, or in the period
of the revision and future periods if the revision affects both current and
future periods.
In the process of applying the Group's accounting policies, management has
made a number of judgments and estimations of which the following are the most
significant. The estimates and assumptions that have a risk of causing
material adjustment to the carrying amounts of assets and liabilities within
the future financial years are as follows:
Depreciation, useful lives and residual values of property, plant &
equipment
The Directors estimate the useful lives and residual values of property, plant
& equipment in order to calculate the depreciation charges. Changes in
these estimates could result in changes being required to the annual
depreciation charges in the statement of comprehensive incomes and the
carrying values of the property, plant & equipment in the balance sheet.
Impairment of assets
The Group assesses at each reporting date whether there is an indication that
an asset may be impaired. If any such indication exists, or when annual
impairment testing for an asset is required, the Group makes an estimate of
the asset's recoverable amount. An asset's recoverable amount is the higher of
an asset's or cash-generating unit's fair value less costs to sell and its
value in use and is determined for an individual asset, unless the asset does
not generate cash inflows that are largely independent of those from other
assets or groups of assets.
Where the carrying amount of an asset exceeds its recoverable amount, the
asset is considered impaired and is written down to its recoverable amount. In
assessing value in use, the estimated future cash flows are discounted to
their present value of money and the risks specific to the asset. Impairment
losses of continuing operations are recognised in the profit or loss in those
expense categories consistent with the function of the impaired asset.
Leases
At the commencement date of property leases the lease liability is calculated
by discounting the lease payments. The discount rate used should be the
interest rate implicit in the lease. However, if that rate cannot be readily
determined, which is generally the case for property leases, the lessee's
incremental borrowing rate is used, being the rate that the individual lessee
would have to pay to borrow the funds necessary to obtain an asset of similar
value to the right-of-use asset in a similar economic environment with similar
terms, security and conditions.
The discount rate originally applied to the Group's leases under the portfolio
approach was 2.6%. Where there have been modifications to leases since the
first application of IFRS 16 the discount rate has been updated in line with
the incremental cost of borrowing and ranges between 4% to 7.75%.
Deferred tax assets
Historically, deferred tax assets had been recognised in respect of the total
unutilised tax losses within the Group. A condition of recognising this amount
depended on the extent that it was probable that future taxable profits will
be available.
Share based payments
The charge for share-based payments is calculated according to the methodology
described in note 21. The Black-Scholes model requires subjective assumptions
to be made including the volatility of the Company's share price, fair value
of the shares and the risk free interest rates.
Dilapidations
Provisions for leasehold property dilapidation repairs are recognised when the
Group has a present obligation to carry out dilapidation work on the leasehold
premises before the property is vacated. The amount recognised as a provision
is the best estimate of the costs required to carry out the dilapidations work
and is spread over the expected period of the tenancy.
Notes to the consolidated financial statements
For the period ended 31 December 2023
1. Segmental analysis
The Group has only one operating segment being: the operation of restaurants
with Lebanese and Middle Eastern Offerings and one geographical segment being
the United Kingdom. The Group's brands meet the aggregation criteria set out
in paragraph 22 of IFRS 8 'Operating Segments' and as such the Group reports
the business as one reportable segment.
None of the Group's customers individually contribute over 10% of the total
revenues.
2. Revenue
31 December 2023 1 January
2023
£ £
Income for the period consists of the following:
Revenue from continuing operations 31,480,609 31,046,546
Other income not included within revenue in the income statement:
Local council support grants - 120,888
Covid-19 related rent concessions - 171,856
Other miscellaneous income 50,614 -
50,614 292,744
Total income for the period 31,531,223 31,339,290
3. Group operating (loss)/profit
31 December 2023 1 January
2023
£ £
This is stated after charging/(crediting):
Variable lease charges* (see note 26) 624,812 444,327
Rent concessions (see note 26) (21,062) (171,856)
Lease modifications (see note 26) 132,786 -
Share-based payments expense (see note 21) 30,541 15,377
Depreciation of property, plant and equipment (see note 10) 3,328,567 3,252,841
Impairment of assets (see note 9 & 10) 107,316 78,266
Loss on disposal of fixed assets 8,940 8,188
Auditors' remuneration (see note 4) 105,000 75,000
Exceptional legal and professional fees** 101,145 1,002,054
*Variable lease charges relate to additional rental expenses payable based on
selected sites achieving a certain level of turnover for the year.
**Exceptional legal and professional fees related to payments and associated
fees in respect of C Hanna's resignation as Chief Executive Officer of the
Group during the period.
For the initial trading period following opening of a new restaurant, the
performance of that restaurant will be lower than that achieved by other,
similar mature restaurants. The difference in this performance, which is
calculated by reference to gross profit margins amongst other key metrics is
quantified and included within opening costs. The breakdown of opening costs,
between pre-opening costs and certain post-opening costs for 3 months is shown
below:
31 December 2023 1 January
2023
£ £
Pre-opening costs 165,535 -
165,535 -
4. Auditors' remuneration
31 December 2023 1 January
2023
£ £
Auditors' remuneration:
Fees payable to Company's auditor for the audit of its annual accounts 31,000 20,500
Other fees to the Company's auditors
The audit of the Company's subsidiaries 74,000 49,500
Total audit fees 105,000 70,000
Review of the half-year accounts - 5,000
Total non-audit fees - 5,000
Total auditors' remuneration 105,000 75,000
5. Staff costs and numbers
31 December 2023 1 January
2023
£ £
(a) Staff costs (including directors):
Wages and salaries:
Kitchen, floor and management wages 10,356,808 10,140,060
Apprentice Levy 44,931 39,202
Other costs:
Social security costs 873,346 844,542
Share-based payments (note 21) 30,541 15,377
Pension costs 160,778 159,281
Total staff costs 11,466,404 11,198,462
(b) Staff numbers (including directors): Number Number
Kitchen and floor staff 475 461
Management staff 134 136
Total number of staff 609 597
(c) Directors' remuneration:
Emoluments 701,752 1,528,598
Money purchase (and other) pension contributions 3,963 27,366
Non-Executive directors' fees 110,600 46,500
Total directors' costs* 816,315 1,602,464
*includes redundancy pay
Directors' remuneration disclosed above include the following amounts to the
highest paid director still in office at the end of the period:
Emoluments 240,300 336,672
Money purchase (and other) pension contributions 1,321 1,321
Further details on Directors' emoluments and the executive pension schemes are
given in the Directors' report.
5. Net finance costs
31 December 2023 1 January
2023
£ £
Finance costs:
Interest on bank loans and overdraft (136,551) (94,078)
Interest on lease liabilties (882,603) (948,619)
(1,019,154) (1,042,697)
Finance income:
Bank interest received 94,147 -
94,147 -
Net finance costs (925,007) (1,042,697)
6. Taxation
(a) Analysis of charge in the period:
31 December 2023 1 January
2023
£ £
Current tax:
UK corporation tax on the (loss)/profit for the period - -
Adjustments in respect of previous periods - (64,480)
Deferred tax:
Origination and reversal of temporary differences 356,527 7,235
Tax losses carried forward (398,069) 371,391
Share based payments (4,132) -
Total tax (credit)/charge for the period (45,674) 314,146
(b) Factors affecting the tax charge for the period:
The tax charged for the period varies from the standard rate of corporation
tax in the UK due to the following factors:
31 December 2023 1 January
2023
£ £
(Loss)/Profit before tax (1,645,105) 902,450
Expected tax credit based on the standard rate of corporation tax in the UK of (386,600) 171,466
23.5% (2022: 19%)
Effects of:
Depreciation on non-qualifying assets (45,499) 7,638
Expenses not deductible for tax purposes 52,656 (19,573)
Adjustments in respect of previous tax periods - (64,480)
Tax losses utilised/(carried forward) - (159,531)
Losses previously not recognised 305,413 -
Effect of change in corporation tax rate 74,030 -
Movements in respect of deferred tax (45,674) 378,626
Total tax (credit)/charge for the period (45,674) 314,146
The Group has carried forward tax losses of £2,546,922 as at 31 December 2023
(1 January 2023: £954,324).
In March 2021 a change to the future corporation tax rate was substantively
enacted to increase from 19% to 25% from 1 April 2023. Accordingly, the rate
used to calculate the deferred tax balances at 31 December 2023 is 25% (1
January 2023: 25%) as the timing of the release of this asset is materially
expected to be after this date.
8. (Loss)/Earnings per share
The basic and diluted earnings per share figures are set out below:
31 December 2023 1 January
2023
£ £
(Loss)/profit attributable to shareholders (1,599,431) 588,304
Weighted average number of shares
For basic earnings per share 122,666,667 122,666,667
Adjustment for options outstanding 267,293 -
For diluted earnings per share 122,933,960 122,666,667
Pence per share Pence per share
(Loss)/earnings per share:
Basic (pence)
From (loss)/profit for the period (1.30) 0.48
Diluted (pence)
From (loss)/profit for the period (1.30) 0.48
Further details of the share options that could potentially dilute basic
earnings per share in the future are provided in note 21.
Diluted earnings per share is calculated by dividing the profit or loss
attributable to ordinary shareholders by the weighted average number of shares
and 'in the money' share options in issue. Share options are classified as 'in
the money' if their exercise price is lower than the average share price for
the period.
As required by IAS 33 'Earnings Per Share', this calculation assumes that the
proceeds receivable from the exercise of 'in the money' options would be used
to purchase share in the open market in order to reduce the number of new
shares that would need to be issued. As the shares were not 'in the money' as
at 1 January 2023 and consequently would be antidilutive, no adjustment was
made in respect of the share options outstanding to determine the diluted
number of options at this date.
9. Intangible assets
Group
Goodwill Total
£ £
Cost
At 3 January 2022 89,961 89,961
At 1 January 2023 89,961 89,961
Accumulated amortisation and impairment
At 3 January 2022 (34,694) (34,694)
Impairments (26,133) (26,133)
At 1 January 2023 (60,827) (60,827)
Net Book Value as at 3 Janaury 2022 55,267 55,267
Net Book Value as at 1 January 2023 29,134 29,134
Goodwill Total
£ £
Cost
At 2 January 2023 89,961 89,961
At 31 December 2023 89,961 89,961
Accumulated amortisation and impairment
At 2 January 2023 (60,827) (60,827)
Impairments (21,850) (21,850)
At 31 December 2023 (82,677) (82,677)
Net Book Value as at 1 Janaury 2023 29,134 29,134
Net Book Value as at 31 December 2023 7,284 7,284
Goodwill arising on business combinations is not amortised but is subject to
an impairment test annually which compares the goodwill's 'value in use' to
its carrying value. During the period, an impairment of £21,850 (1 January
2023: £26,133) was considered necessary in respect of goodwill.
10. Property, plant and equipment
Group Right-of use Assets Leasehold Land and buildings Plant and machinery Fixture, fittings & equipment Motor Vehicles Total
£ £ £ £ £ £
Cost
At 3 January 2022 28,644,937 10,419,010 4,702,567 2,843,966 38,310 46,648,790
Additions - 15,741 417,524 147,985 - 581,250
Disposals - (63,577) (26,785) (704) - (91,066)
Modifications (48,527) - - - - (48,527)
At 1 January 2023 28,596,410 10,371,174 5,093,306 2,991,247 38,310 47,090,447
Accumulated depreciation and impairment
At 3 January 2022 (12,684,557) (6,208,028) (3,008,896) (1,548,952) (5,108) (23,455,541)
Depreciation during the period (2,166,098) (619,284) (298,010) (163,320) (6,129) (3,252,841)
Disposals during the period - 64,380 21,420 (2,922) - 82,878
Impairment during the period (41,328) (1,602) (7,220) (1,983) - (52,133)
Transfers - (55,802) 55,802 - - -
At 1 January 2023 (14,891,983) (6,820,336) (3,236,904) (1,717,177) (11,237) (26,677,637)
Cost
At 2 January 2023 28,596,410 10,371,174 5,093,306 2,991,247 38,310 47,090,447
Additions 1,695,964 64,053 455,017 760,830 - 2,975,864
Disposals - (83,231) - - - (83,231)
Modifications (185,306) - - - - (185,306)
At 31 December 2023 30,107,068 10,351,996 5,548,323 3,752,077 38,310 49,797,774
Accumulated depreciation and impairment
At 2 January 2023 (14,891,983) (6,820,336) (3,236,904) (1,717,177) (11,237) (26,677,637)
Depreciation during the period (2,204,357) (612,153) (323,712) (182,931) (5,414) (3,328,567)
Disposals during the period - 74,291 - - - 74,291
Impairment during the period (2,055) (115) (43,440) (39,856) - (85,466)
At 31 December 2023 (17,098,395) (7,358,313) (3,604,056) (1,939,964) (16,651) (30,017,379)
Net Book Value as at 1 January 2023 13,704,427 3,550,838 1,856,402 1,274,070 27,073 20,412,810
Net Book Value as at 31 December 2023 13,008,673 2,993,683 1,944,267 1,812,113 21,659 19,780,395
The right of use assets relates to one class of underlying assets, being the
property leases entered into for various restaurant.
At each reporting date the Group considers any indication of impairment to the
carrying value of its property, plant and equipment. The assessment is based
on expected future cash flows and Value-in-Use calculations are performed
annually and at each reporting date and is carried out on each restaurant as
these are separate 'cash generating units' (CGU). Value-in-use was calculated
as the net present value of the projected risk-adjusted post-tax cash flows
plus a terminal value of the CGU. A pre-tax discount rate was applied to
calculate the net present value of pre-tax cash flows. The discount rate was
calculated using a market participant weighted average cost of capital. A
single rate has been used for all restaurants as management believe the risks
to be the same for all restaurants.
The recoverable amount of each CGU has been calculated with reference to its
value-in-use. The key assumptions of this calculation are shown below:
Sales growth 3%
Discount rate 5.3%
Number of years projected over life of lease
The projected sales growth was based on the Group's latest forecasts at the
time of review. The key assumptions in the cashflow pertain to revenue growth.
Management have determined that growth based on industry average growth rates
and actuals achieved historically are the best indication of growth going
forward. The Directors are confident that the Group is largely immune from the
effects of Brexit and forecasts have considered the impact of inflation and
rising energy costs. Management has also performed sensitivity analysis on
sales inputs to the model and noted no material sensitivities in the model.
Based on the review, an impairment charge of £85,466 (1 January 2023:
£52,133) was recorded for the year.
11. Subsidiaries
The subsidiaries of Comptoir Group Plc, all of which have been included in
these consolidated financial statements, are as follows:
Name Country of incorporation and principal place of business Proportion of ownership interest as at period end
2023*** 2023**
Timerest Limited England & Wales 100% 100%
Chabane Limited* England & Wales 100% 100%
Comptoir Franchise Limited England & Wales 100% 100%
Shawa Group Limited* England & Wales 100% 100%
Shawa Bluewater Limited* England & Wales 100% 100%
Shawa Limited England & Wales 100% 100%
Shawa Westfield Limited England & Wales 100% 100%
Shawa Rupert Street Limited* England & Wales 100% 100%
Comptoir Stratford Limited* England & Wales 100% 100%
Comptoir South Ken Limited* England & Wales 100% 100%
Comptoir Soho Limited* England & Wales 100% 100%
Comptoir Central Production Limited* England & Wales 100% 100%
Comptoir Westfield London Limited* England & Wales 100% 100%
Levant Restaurants Group Limited* England & Wales 100% 100%
Comptoir Chelsea Limited* England & Wales 100% 100%
Comptoir Bluewater Limited* England & Wales 100% 100%
Comptoir Wigmore Limited* England & Wales 100% 100%
Comptoir Kingston Limited* England & Wales 100% 100%
Comptoir Broadgate Limited* England & Wales 100% 100%
Comptoir Manchester Limited* England & Wales 100% 100%
Comptoir Restaurants Limited England & Wales 100% 100%
Comptoir Leeds Limited* England & Wales 100% 100%
Comptoir Oxford Street Limited* England & Wales 100% 100%
Comptoir I.P. Limited* England & Wales 100% 100%
Comptoir Reading Limited* England & Wales 100% 100%
Comptoir Bath Limited* England & Wales 100% 100%
Comptoir Exeter Limited* England & Wales 100% 100%
Yalla Yalla Restaurants Limited England & Wales 100% 100%
Comptoir Haymarket Ltd* England & Wales 100% 100%
Comptoir Oxford Limited* England & Wales 100% 100%
*Dormant companies
** 52 weeks ending 1 January 2023
*** 52 weeks ending 31 December 2023
* Dormant companies
** 52 weeks ending 1 January 2023
*** 52 weeks ending 31 December 2023
The registered office address for all subsidiaries is 6(th) Floor, Winchester
House, 259-269 Old Marylebone Road, London, United Kingdom, NW1 5RA.
12. Inventories
Group
31 December 2023 1 January
2023
£ £
Finished goods and goods for resale 521,488 474,655
13. Trade and other receivables
Group
31 December 2023 1 January
2023
£ £
Trade receivables 421,476 256,841
Other receivables 62,617 318,018
Prepayments and accrued income 860,617 645,194
Total trade and other receivables 1,344,710 1,220,053
14. Trade and other payables
Group
31 December 2023 1 January
2023
£ £
Trade payables 1,958,690 2,307,855
Accruals 2,600,211 2,701,001
Other taxation and social security 1,276,456 1,309,913
Other payables 129,639 80,906
Total trade and other payables 5,964,996 6,399,675
15. Borrowings
Group
31 December 2023 1 January
2023
Amounts falling due within one year: £ £
Bank loans 600,000 600,000
Total borrowings 600,000 600,000
Amounts falling due after more than one year:
Bank loans 1,000,000 1,600,000
Total borrowings 1,000,000 1,600,000
The bank loan relates to a £3m Coronavirus Business Interruption Loan Scheme
("CBILS") loan.
The CBILS loan is secured by way of fixed charges over the assets of various
Group companies. The CBIL loan of £1,600,000 represent amounts repayable
within one year of £600,000 (1 January 2023: £600,000) and £1,000,000 (1
January 2023: £1,600,000) repayable in more than one year. The bank loan has
a six-year term with maturity date in 2026. The loan has an initial interest
free period of 12 months followed by a rate of interest of 2.5% over the Bank
base rate.
16. Provisions for liabilities
Group
31 December 2023 1 January
2023
£ £
Provisions for leasehold property dilapidations 197,303 167,953
Provisions for payroll pension costs 191,844 194,135
Total provisions 389,147 362,088
Movements on provisions: £ £
At beginning of period 362,088 859,414
Provision in the period (net of releases) 27,059 (497,326)
At end of period 389,147 362,088
16. Provisions for liabilities (continued)
Provisions for leasehold property dilapidation repairs are recognised when the
Group has a present obligation to carry out dilapidation repair work on the
leasehold premises before the property is vacated. The amount recognised as a
provision is the best estimate of the costs required to carry out the
dilapidations work and is spread over the expected period of the tenancy.
Provisions for rent reviews relates to any increases in rent that may become
payable based on scheduled rent review dates as per lease agreements. This was
all settled during the period.
The payroll provision relates to a one-off provision as a result of a review
of the current pension scheme in place as part of a planned transition to
Payroll Bureau services.
17. Deferred taxation
Deferred tax assets and liabilities are offset where the Group or Company has
a legally enforceable right to do so. The following is the analysis of the
deferred tax balances (after offset) for financial reporting purposes:
Group Liabilities Liabilities Assets Assets
31 Dec 2023 1 Jan 2023 31 Dec 2023 1 Jan 2023
£ £ £ £
Accelerated capital allowances (707,952) (351,425) - -
Tax losses - - 477,527 79,458
Share-based - - 4,132 -
payments
(707,952) (351,425) 481,659 79,458
Movements in the period: Group Group
31 Dec 2023 1 Jan 2023
£ £
Net liability at 1 January 271,967 (106,659)
(Credit)/charge to Statement of Comprehensive Income (note 7) (45,674) 378,626
Net liability at end of period 226,293 271,967
The deferred tax liability set out above is related to accelerated capital
allowances and will reverse over the period that the fixed assets to which it
relates are depreciated. The deferred tax asset on tax losses has been
recognised as management expect that there will be sufficient profits
available in future to utilise against this amount.
18. Share capital
Authorised, issued and fully paid Number of 1p shares
31 December 2023 1 January
2023
Brought forward 122,666,667 122,666,667
At the end of the period 122,666,667 122,666,667
Nominal value
31 December 2023 1 January
2023
£ £
Brought forward 1,226,667 1,226,667
At the end of the period 1,226,667 1,226,667
19. Other reserves
The other reserves amount of £175,640 (1 January 2023: £145,099) on the
balance sheet reflects the credit to equity made in respect of the charge for
share-based payments made through the income statement and the purchase of
shares in the market in order to satisfy the vesting of existing and future
share awards under the Long-Term Incentive Plan. For further details, refer to
note 21.
20. Retirement benefit schemes
Defined contribution schemes 31 December 2023 1 January
2023
£ £
Charge to profit and loss 160,778 159,281
A defined contribution scheme is operated for all qualifying employees. The
assets of the scheme are held separately from those of the Group in an
independently administered fund.
21. Share-based payments
Equity-settled share-based payments
On 4 July 2018, the Group established a Company Share Option Plan ("CSOP")
under which 4,890,000 share options were granted to key employees. On the same
day, the options which had been granted under the Group's existing EMI share
option scheme were cancelled. The CSOP scheme includes all subsidiary
companies headed by Comptoir Group PLC. The exercise price of all of the
options is £0.1025 and the term to expiration is 3 years from the date of
grant, being 4 July 2018. All of the options have the same vesting conditions
attached to them.
On 21 May 2021 under the existing CSOP, 3,245,000 share options were granted
to key employees. The CSOP scheme includes all subsidiary companies headed by
Comptoir Group PLC. The exercise price of all of the options is £0.0723 and
the term to expiration is 3 years from the date of grant, being 21 May 2021.
All of the options have the same vesting conditions attached to them.
On 17 April 2023 under the existing CSOP, 2,900,000 share options were granted
to key employees. The CSOP scheme includes all subsidiary companies headed by
Comptoir Group PLC. The exercise price of all of the options is £0.0557 and
the term to expiration is 3 years from the date of grant, being 17 April 2026.
All of the options have the same vesting conditions attached to them.
A share-based payment charge of £30,541 (1 January 2023: £15,377) was
recognised during the year in relation to the new scheme and this amount is
included within administrative expenses and added back in calculating adjusted
EBITDA.
31 December 2023 1 January
2023
Average Exercise price Average Exercise price
No. of shares £ No. of shares £
CSOP options
Options outstanding, beginning of period 4,270,000 0.0874 6,045,000 0.1025
Granted 2,900,000 0.0557 - 0.0723
Cancelled (450,000) - (1,775,000) -
Options outstanding, end of period 6,720,000 0.0746 4,270,000 0.0874
Options exercisable, end of period 2,100,000 0.1025 2,300,000 0.1025
The Black-Scholes option pricing model is used to estimate the fair value of
options granted under the Group's share-based compensation plan. The range of
assumptions used and the resulting weighted average fair value of options
granted at the date of grant for the Group were as follows:
July 2018 May 2021 Apr 2023
On grant date On grant date On grant date
Risk free rate of return 0.1% 0.39% 4.21%
Expected term 3 years 3 years 3 years
Estimated volatility 51% 64% 61%
Expected dividend yield 0% 0% 0%
Weighted average fair value of options granted £0.03527 £0.03050 £0.02511
Exercise price 0.1025 0.072344 0.05565
Risk free interest rate
The risk-free interest rate is based on the UK 2-year Gilt yield.
Expected term
The expected term represents the maximum term that the Group's share options
in relation to employees of the Group are expected to be outstanding. The
expected term is based on expectations using information available.
Estimated volatility
The estimated volatility is the amount by which the price is expected to
fluctuate during the period. 2,900,000 share options were granted during the
current period, the estimated volatility for the share options issued in the
period was determined based on the standard deviation of share price
fluctuations of the company.
Expected dividends
Comptoir's Board of Directors may from time to time declare dividends on its
outstanding shares. Any determination to declare and pay dividends will be
made by Comptoir Group PLC's Board of Directors and will depend upon the
Group's results, earnings, capital requirements, financial condition, business
prospects, contractual restrictions and other factors deemed relevant by the
Board of Directors. In the event that a dividend is declared, there is no
assurance with respect to the amount, timing or frequency of any such
dividends. Based on this uncertainty and unknown frequency, no dividend rate
was used in the assumptions to calculate the share based compensation expense.
22. Reconciliation of profit to cash generated from operations
31 December 2023 1 January
2023
£ £
Operating (loss)/profit for the period (720,098) 1,945,147
Depreciation 3,328,567 3,252,841
Loss on disposal of fixed assets 8,940 8,188
Impairment of assets 107,316 78,266
Rent concessions (21,062) (171,856)
Lease modifications 132,786 -
Share-based payment charge 30,542 15,377
Provisions 27,059 -
Movements in working capital
Increase in inventories (46,833) (8,765)
Increase in trade and other receivables (124,655) (521,065)
Decrease in payables and provisions (434,680) (229,184)
Cash from operations 2,287,882 4,368,949
23. Reconciliation of changes in cash to the movement in net cash/(debt)
Net cash/(debt): 31 December 2023 1 January
2023
£ £
At the beginning of the period (10,349,153) (13,314,538)
Movements in the period:
Bank and other borrowings 600,000 600,000
Lease liabilities 3,247,143 3,031,097
Non-cash movements in the period (2,504,987) (728,236)
Cash (outflow)/inflow (2,881,566) 62,524
At the end of the period (11,888,563) (10,349,153)
Represented by: At 3 January Cash flow movements Non- cash flow movements At 1 January
2022
in the period
in the period
2023
£ £ £ £
Cash and cash equivalents 9,867,799 62,524 - 9,930,323
Bank loans (2,800,000) 600,000 - (2,200,000)
Lease liabilities (20,382,337) 3,031,097 (728,236) (18,079,476)
(13,314,538) 3,693,621 (728,236) (10,349,153)
At 2 January Cash flow movements Non- cash flow movements At 31 December
2023
in the period
in the period
2023
£ £ £ £
Cash and cash equivalents 9,930,323 (2,881,566) - 7,048,757
Bank loans (2,200,000) 600,000 - (1,600,000)
Lease liabilities (18,079,476) 3,247,143 (2,504,987) (17,337,320)
(10,349,153) 965,577 (2,504,987) (11,888,563)
24. Financial instruments
The Group finances its operations through equity and borrowings, with the
borrowing interest subject to 2.5% per annum over base rate.
Management pay rigorous attention to treasury management requirements and
continue to:
· ensure sufficient committed loan facilities are in place to
support anticipated business requirements;
· ensure the Group's debt service will be supported by anticipated
cash flows and that covenants will be complied with; and
· manage interest rate exposure with a combination of floating rate
debt and interest rate swaps when deemed appropriate.
The Board closely monitors the Group's treasury strategy and the management of
treasury risk. Further details of the Group's capital risk management can be
found in the report of the Directors.
Further details on the business risk factors that are considered to affect the
Group are included in the strategic report and more specific financial risk
management (including sensitivity to increases in interest rates) are included
in the Report of the Directors. Further details on market and economic risk
and headroom against covenants are included in the Strategic Report.
Financial assets and liabilities
Group financial assets:
The bank loan has an interest rate of 2.5% per annum over base rate.
31 December 2023 1 January
2023
£ £
Cash and cash equivalents 7,048,757 9,930,323
Trade and other receivables 484,093 574,859
Total financial assets 7,532,850 10,505,182
Group financial liabilities: 31 December 2023 1 January
2023
£ £
Trade and other payables excl. corporation tax 4,874,343 5,276,259
Bank loan 600,000 600,000
Short-term financial liabilities 5,474,343 5,876,259
Bank loan 1,000,000 1,600,000
Long-term financial liabilities 1,000,000 1,600,000
Total financial liabilities 6,474,343 7,476,259
The maturity profile of anticipated gross future cash flows, including
interest, relating to the Group's non-derivative financial liabilities, on an
undiscounted basis, are set out below:
Trade and other payables * Bank loans
£ £
As at 1 January 2023
Within one year 6,761,763 600,000
Within two to five years - 1,600,000
Total 6,761,763 2,200,000
As at 31 December 2023
Within one year 6,354,143 600,000
Within two to five years - 1,000,000
Total 6,354,143 1,600,000
*excluding corporation tax
Fair value of financial assets and liabilities
All financial assets and liabilities are accounted for at cost and the
Directors consider the carrying value to approximate their fair value.
25. Financial risk management
The Group's and Company's financial instruments comprise investments, cash and
liquid resources, and various items, such as trade receivables and trade
payables that arise directly from its operations. The vast majority of the
Group's and Company's financial investments are denominated in sterling.
Neither the Group nor the Company enter into derivatives or hedging
transactions. It is, and has been throughout the period under review, the
Group's and Company's policy that no trading in financial instruments shall be
undertaken.
The main risks arising from the Group's and Company's financial instruments
are credit risk, liquidity risk, foreign currency risk, interest rate risk and
investment risk. The Group does not have a material exposure to foreign
currency risk.
The board reviews policies for managing each of these risks, and they are
summarised as follows:
Credit Risk
Credit risk refers to the risk that a counterparty will default on its
contractual obligations resulting in financial losses to the Group.
Counterparties for cash balances are with large established financial
institutions. The Group is exposed to credit related losses in the event of
non-performance by the financial institutions but does not expect them to fail
to meet their obligations.
As a retail business with trading receipts settled either by cash or credit
and debit cards, there is very limited exposure from customer transactions.
The Group is exposed to credit risk in respect of commercial discounts
receivable from suppliers but the Directors believe adequate provision has
been made in respect of doubtful debts and there are no material amounts past
due that have not been provided against.
The carrying amount of financial assets recorded in the financial statements,
net of any allowances for losses, represents the Group's maximum exposure to
credit risk.
Liquidity risk
The Group has built an appropriate mechanism to manage liquidity risk of the
short, medium and long-term funding and liquidity management requirements.
Liquidity risk is managed through the maintenance of adequate cash reserves
and bank facilities by monitoring forecast and actual cash flows and matching
the maturity profiles of financial assets and liabilities. The Group's loan
facilities (as set out in note 15), ensure continuity of funding, provided the
Group continues to meet its covenant requirements (as detailed in the report
of the Directors).
Foreign currency risk
The Group is not materially exposed to changes in foreign currency rates and
does not use foreign exchange forward contracts.
Interest rate risk
Exposure to interest rate movements has been controlled historically through
the use of floating rate debt to achieve a balanced interest rate profile. The
Group does not currently have any interest rate swaps in place as the
continued reduction in the level of debt combined with current market
conditions results in a low level of exposure. The Group's exposure will
continue to be monitored and the use of interest rate swaps may be considered
in the future.
Investment risk
Investment risk includes investing in companies that may not perform as
expected. The Group's investment criteria focus on the quality of the business
and the management team of the target company, market potential
and the ability of the investment to attain the returns required within the
time horizon set for the investment. Due diligence is undertaken on each
investment. The Group regularly reviews the investments in order to monitor
the level of risk and mitigate exposure where appropriate.
26. Lease commitments
The Group has leases assets including 22 restaurants and one head office
location within the United Kingdom. The Group has elected to not take the
practical expedient for short term and low values leases, therefore all leases
have been included. The remaining lease terms range from less than one year to
18 years with an average remaining lease term of 7 years.
Information about leases for which the Group is a lessee is presented below:
Net book value of right of use assets 31 December 2023 1 January
2023
£ £
Balance at 1 January 13,704,427 15,960,380
Additions 1,695,964 -
Depreciation chage (2,204,357) (2,166,098)
Impairment charge (2,055) (41,328)
Modifications (185,306) (48,527)
13,008,673 13,704,427
Maturity analysis - contractual undiscounted cash flows 31 December 2023 1 January
2023
£ £
Within one year (3,013,321) (2,982,848)
More than one year (19,086,768) (18,763,863)
(22,100,089) (21,746,711)
Lease liabilities included in the statement of financial position 31 December 2023 1 January
2023
£ £
Current (2,159,265) (2,351,410)
Non-current (15,178,055) (15,728,066)
(17,337,320) (18,079,476)
Amounts charged/(credited) in profit or loss 31 December 2023 1 January
2023
£ £
Interest on lease liabilities 882,603 948,619
Expenses relating to variable lease payments 624,812 444,327
Rent concessions (21,062) (171,856)
Lease modifications 132,786 -
1,619,139 1,221,090
Amounts recognised in statement of cash flow 31 December 2023 1 January
2023
£ £
Total cash outflow for leases 3,247,143 3,031,097
3,247,143 3,031,097
Some site leases contained clauses on variable lease payments where additional
lease payments may be required dependant on the revenue being generated at
that particular site. Variable lease payments ranged from 9% -15% of revenue
in excess of the existing base rent per the respective lease agreements.
27. Related party transactions
Remuneration in respect of key management personnel, defined as the Directors
for this purpose, is disclosed in note 5. Further information concerning the
Directors' remuneration is provided in the Directors' remuneration report.
During the year, the Group paid fees to the following related parties:
Remuneration Pension Total
£ £ £
M Kitous 52,585 1,207 53,792
L Kitous 26,702 528 27,230
79,287 1,735 81,022
28. Subsequent events
Post year end we have the new opening of Comptoir Libanais at Southbank and
taken back the franchise site at Cheshire Oakes.
We have also opened a new franchise Shawa in Abu Dhabi and signed a new
partnership deal with AREAS.
29. Ultimate controlling party
The Company has a number of shareholders and is not under the control of any
one person or ultimate controlling party.
Parent Company accounts (under UK GAAP)
Company balance sheet as at 31 December 2023
Notes 31 December 2023 1 January
2023
£ £
Fixed assets
Intangible assets ii - 29,134
Tangible assets iii 7,994 10,282
Investments iv 16,034 146,479
24,028 185,895
Current assets
Debtors v 5,579,050 3,635,522
Cash and cash equivalents - 54,236
5,579,050 3,689,758
Total assets 5,603,078 3,875,653
Liabilities
Current liabilities
Creditors vi (5,126,321) (1,501,421)
Borrowings vii (600,000) (600,000)
(5,726,321) (2,101,421)
Non-current liabilities
Borrowings vii (1,000,000) (1,600,000)
Provisions for liabilities viii (906) (1,238)
Total liabilities (6,727,227) (3,702,659)
Net assets (1,124,149) 172,994
Equity
Share capital ix 1,226,667 1,226,667
Share premium ix 10,050,313 10,050,313
Other reserves ix 175,640 145,099
Retained earnings ix (12,576,769) (11,249,085)
Total equity (1,124,149) 172,994
As permitted by section 408 of the Companies Act 2006, a separate profit and
loss account has not been presented for the holding company. During the year
the Company recorded a loss of £1,327,684 (1 January 2023: £723,588).
Remuneration of the auditor is borne by a subsidiary undertaking, Timerest
Limited.
The financial statements of Comptoir Group Plc (company registration number
07741283) were approved by the Board of Directors and authorised for issue on
21 May 2022 and were signed on its behalf by:
Nick Ayerst
Chief Executive Officer
Company financial statements - under UK GAAP
Accounting policies and basis of preparation
Basis of accounting
The financial statements for the Company have been prepared under FRS 102 'The
Financial Reporting Standard applicable in the UK and Republic of Ireland'
(FRS 102) and the requirements of the Companies Act 2006. The Group financial
statements have been prepared under IFRS and are shown separately. The Company
financial statements have been prepared under the historical cost convention
in accordance with applicable UK accounting standards and on the going concern
basis.
This company is a qualifying entity for the purposes of FRS 102, being a
member of a group where the parent of that group prepares publicly available
consolidated financial statements, including this Company, which are intended
to give a true and fair view of the assets, liabilities, financial position
and profit or loss of the Group. The Company has therefore taken advantage of
exemptions from the following disclosure requirements:
• Section 7 'Statement of Cash Flows' - Presentation of a statement
of cash flow and related notes and disclosures;
• Section 33 'Related Party Disclosures' - Compensation for key
management personnel.
The financial statements of the Company are consolidated in the financial
statements of Comptoir Group Plc, which are available at the Companies House.
Going concern
The Board of Directors have, at the time of approving the financial
statements, a reasonable expectation that the Company has adequate resources
to continue in operational existence for the foreseeable future. More details
on the going concern uncertainties are discussed in the going concern note in
the Principal Accounting Policies for the Consolidated Financial Statements.
Thus, the Board continues to adopt the going concern basis of accounting in
preparing the financial statements.
Dividends
Equity dividends are recognised when they become legally payable. Interim
dividends are recognised when paid. Final equity dividends are recognised when
approved by the shareholders at an annual general meeting.
Investments in subsidiaries
The consolidated financial statements incorporate the financial statements of
the Company and entities controlled by the Group (its subsidiaries).
The results of subsidiaries acquired or disposed of during the year are
included in total comprehensive income from the effective date of acquisition
and up to the effective date of disposal, as appropriate using accounting
policies consistent with those of the parent. All intra-group transactions,
balances, income and expenses are eliminated in full on consolidation.
Investments are valued at cost less any provision for impairment.
Intangible assets - Goodwill
Goodwill is the difference between amounts paid on the acquisition of a
business and the fair value of the identifiable assets and liabilities. It is
amortised to the income statement over its economic life, which is estimated
to be ten years from the date of acquisition.
Tangible assets
Items of property, plant and equipment are stated at cost less accumulated
depreciation and impairment losses.
Depreciation
Depreciation is charged to the income statement on a reducing balance basis
and on a straight-line basis over the estimated useful lives of corresponding
items of property, plant and equipment:
Plant and machinery
15% on reducing balance
Fixture, fittings and equipment 10% on reducing
balance
The carrying values of plant and equipment are reviewed at each reporting date
to determine whether there are any indications of impairment. If any such
indication exists, the assets are tested for impairment to estimate the
assets' recoverable amounts. Any impairment losses are recognised in the
statement of comprehensive income.
The assets' residual values and useful lives are reviewed, and adjusted if
appropriate, at each statement of financial position date. Gains and losses on
disposals are determined by comparing the proceeds with the carrying amount
and are recognised within the Statement of Comprehensive Income.
Share-based payment transactions
The share options have been accounted for as an expense in the Company in
which the employees are employed, using a valuation based on the Black-Scholes
model.
An increase in the investment held by the Company in the subsidiary in which
the employees are employed, with a corresponding increase in equity, is
recognised in the accounts of the Company. Information in respect of the
Company's share-based payment schemes is provided in Note 21 to the
consolidated financial statements.
The value is accounted for as a capital contribution in relevant Group
subsidiaries that employ the staff members to whom awards of share options
have been made.
Reserves
The Company's reserves are as follows:
· Called up share capital represents the nominal value of the
shares issued.
· Share premium represents amounts paid in excess of the nominal
value of shares.
· Other reserves represent share-based payment charges recognised
in equity, and;
· Retained earnings represents cumulative profits or losses, net of
dividends paid and other adjustments.
Company financial statements - under UK GAAP
Notes to the financial statements
i) Employee costs and numbers
The Company has no employees. All Group employees and Directors' remuneration
are disclosed within the Group's consolidated financial statements.
ii) Intangible assets
Goodwill Total
£
Cost
At 3 January 2022 89,961
At 1 January 2023 89,961
Accumulated amortisation and impairment
At 3 January 2022 (47,851)
Amortisation during the period (8,996)
Impairment during the period (3,980)
At 1 January 2023 (60,827)
Net Book Value as at 2 January 2022 42,110
Net Book Value as at 1 January 2023 29,134
Cost
At 2 January 2023 89,961
At 31 December 2023 89,961
Accumulated amortisation and impairment
At 2 January 2023 (60,827)
Amortisation during the period (7,284)
Impairment during the period (21,850)
At 31 December 2023 (89,961)
Net Book Value as at 1 January 2023 29,134
Net Book Value as at 31 December 2023 -
ii) Intangible assets (continued)
The intangible assets reported on the statement of financial position consists
of goodwill arising on the acquisition on 14 December 2016 of the trade and
assets of Agushia Limited. In accordance with FRS 102, goodwill arising on
business combinations is amortised over the expected life of the asset and is
subject to an impairment review annually if the life of the assets is
indefinite or expected to be greater than 10 years, or more frequently if
events or changes in circumstances indicate that it might be impaired.
Therefore, goodwill arising on acquisition is monitored to compare the value
in use to its carrying value. During the period an impairment charge of
£21,850 (1 January 2023: £3,980) was recorded.
iii) Property, plant and equipment
Leasehold Land and buildings Plant and machinery Fixture, fittings & equipment Total
£ £ £ £
Cost
At 3 January 2022 11,290 26,655 5,555 43,500
Disposals during the period (11,290) - - (11,290)
At 1 January 2023 - 26,655 5,555 32,210
Accumulated depreciation and impairment
At 3 January 2022 (11,290) (17,585) (2,876) (31,751)
Depreciation during the period - (1,215) (252) (1,467)
Depreciation eliminated on disposal 11,290 - - 11,290
At 1 January 2023 - (18,800) (3,128) (21,928)
Net Book Value as at 2 Janaury 2022 - 9,070 2,679 11,749
Net Book Value as at 1 January 2023 - 7,855 2,427 10,282
Cost
At 2 January 2023 - 26,655 5,555 32,210
At 31 December 2023 - 26,655 5,555 32,210
Accumulated depreciation and impairment
At 2 January 2023 - (18,800) (3,128) (21,928)
Depreciation during the period - (1,920) (368) (2,288)
At 31 December 2023 - (20,720) (3,496) (24,216)
Net Book Value as at 1 Janaury 2023 - 7,855 2,427 10,282
Net Book Value as at 31 December 2023 - 5,935 2,059 7,994
iv) Investments in subsidiary undertakings
During the period, an impairment provision of £160,996 (1 January 2023:
£nil) was recorded in relation to capital contribution to group undertakings.
Shares Capital contributions Total
£ £ £
Cost
At 2 January 2023 1,380 145,099 146,479
Share-based payment charge - 30,541 30,541
Adjustments 10 - 10
At 31 December 2023 1,390 175,640 177,030
Impairments
For the period ended 31 December 2023 - (160,996) (160,996)
Net book value at 1 January 2023 1,380 145,099 146,479
Net book value at 31 December 2023 1,390 14,644 16,034
v) Debtors
During the period, an impairment provision of £697,639 (1 January 2023:
£590,282) was recorded in relation to amounts receivable from group
undertakings.
31 December 2023 1 January
2023
£ £
Other debtors 3,606 3,606
Amounts receivable from group undertakings 5,575,444 3,631,916
Total 5,579,050 3,635,522
Amounts falling due after more than one year:
Deferred tax asset - -
Total 5,579,050 3,635,522
vi) Creditors
31 December 2023 1 January
2023
£ £
Bank overdrafts 19,935 -
Trade creditors 21,012 -
Other creditors 1,479 1,470
Amounts due to group undertakings 5,052,910 1,477,451
Accruals 30,985 22,500
Total 5,126,321 1,501,421
vii) Borrowings
The bank loan relates to a £3m Coronavirus Business Interruption Loan Scheme
("CBILS") loan.
The CBILS loan is secured by way of fixed charges over the assets of various
Group companies. The CBIL loan of £1,600,000 represent amounts repayable
within one year of £600,000 (1 January 2023: £600,000) and £1,000,000 (1
January 2023: £1,600,000) repayable in more than one year. The bank loan has
a six-year term with maturity date in 2026. The loan has an initial interest
free period of 12 months followed by a rate of interest of 2.5% over the Bank
base rate.
31 December 2023 1 January
2023
Amounts falling due within one year: £ £
Bank loans 600,000 600,000
Total borrowings 600,000 600,000
Amounts falling due after more than one year:
Bank loans 1,000,000 1,600,000
Total borrowings 1,000,000 1,600,000
viii) Provisions
Deferred tax recognised in balance sheet: Total
£
Deferred tax liabilities:
Brought forward (1,047)
Charge/(credit) to profit or loss 1,953
Total 906
ix) Share capital and reserves
Share capital Share premium Other reserves Retained earnings Total
£ £ £ £ £
At 3 January 2022 1,226,667 10,050,313 129,722 (10,525,497) 881,205
Share-based payment charge - - 15,377 - 15,377
Total comprehensive loss for the period - - - (723,588) (723,588)
At 1 January 2023 1,226,667 10,050,313 145,099 (11,249,085) 172,994
At 2 January 2023 1,226,667 10,050,313 145,099 (11,249,085) 172,994
Share-based payment charge - - 30,541 - 30,541
Total comprehensive loss for the period - - - (1,327,684) (1,327,684)
At 31 December 2023 1,226,667 10,050,313 175,640 (12,576,769) (1,124,149)
x) Related party transactions
The Company has taken advantage of the exemption in FRS 102 and has not
disclosed transactions entered into between members of the Group.
xi) Subsequent events
Details of subsequent events are discussed in note 28 to the Group financial
statements.
xii) Ultimate controlling party
The Company has no ultimate controlling party.
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