REG - Cooks Coffee Company - Interim Results
21/11/2024 07:00
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RNS Number : 9710M Cooks Coffee Company Limited 21 November 2024
21 November 2024
Cooks Coffee Company Limited
("Cooks Coffee", or the "Company" or the "Group")
Interim Results
"Continued growth and move into Group profit for the period"
Cooks Coffee Company (NZX:CCC; AQUIS:COOK), the international coffee focused
café chain, announces its results for the six months ended 30 September 2024.
Period Highlights
· Group revenues increased by 27% to NZ$2.74m (2024: NZ$2.16m)
· Group EBITDA for the period was NZ$0.826m compared to a loss of (NZ$0.011m)
last year
· Company Net Profit before tax was NZ$0.53m compared to a loss of (NZ$0.32m)
last year
· Total store sales in the UK increased by 36% to NZ$23.4m as the development in
suburban areas and smaller market towns gained further momentum. Like for like
sales in the UK were up +6.3%
· Total sales in Ireland increased +6% to NZ$10.4m. Like for like sales in
Ireland were up +2.9%
· Overall store sales for UK & Ireland increased +26% to NZ$33.8m. Like for
like sales were up +5.1%
· Operating stores at the end of September were 83 in UK & Ireland, up from
75 at the end of March 2024
· During the period NZ$0.2m of debt reduction has occurred, with interest costs
reducing by NZ$0.08m compared to FY24
Post Period Events
Group store sales for the seven-week period to 17(th) November have maintained
the positive momentum seen over the past six months with total store sales in
the UK up 39.4% and in Ireland store sales up 17.9% compared to the previous
year.
The Company remains dedicated to building the business based on ethical
principles and community values. The Company was delighted with the
achievement of the Caerphilly store in Wales in being awarded the best Ethical
Café in Wales. This is an important recognition of the strong commitment the
Company has to ethical practices.
Aiden Keegan, CEO of Cooks Coffee Company, commented: "The Board is very
pleased to report a strong period of growth for the Group resulting in a
profitable performance in the period. This is testament to the hard work of
all our franchisees and strong offering that we provide. The Group continues
to open new stores in desirable locations which will have all performed well
to date.
"We are also delighted that the momentum experienced in the first half has
continued and the Group expects to deliver a robust set of numbers for the
full year."
Enquiries:
Cooks Coffee Company Limited +64 21 702 509 (New Zealand)
Keith Jackson (Executive Chairman) keith.jackson@cookscoffeecompany.com
(mailto:keith.jackson@cookscoffeecompany.com)
+44 (0) 20 3934 6630 (UK)
ukinvestorrelations@cookscoffeecompany.com
(mailto:ukinvestorrelations@cookscoffeecompany.com)
IFC Advisory Limited (Financial PR & IR) +44 (0) 20 3934 6630
Tim Metcalfe, Graham Herring, Florence Chandler cookscoffee@investor-focus.co.uk (mailto:cookscoffee@investor-focus.co.uk)
Oberon Capital
+44 (0) 20 3179 5300
Nick Lovering, Adam Pollock, Mike Seabrook
Chairman's Statement
I am delighted by the positive trading performance in the first half of the
financial year and that this momentum has continued into the second half of
the financial year. This positive growth, largely driven by the opening of new
franchised stores, has been the key factor in delivering a profitable EBITDA
trading performance of NZ$0.826m in the first half of this financial year
compared to a loss last year.
Given the continued momentum, the Directors expect that the financial
performance in the second half of the year will deliver another profit broadly
similar to that which was achieved in the first half.
The Company's revenues are largely derived from the royalty contributions
which are related to the sales that each site achieves. The focus of the
Directors is to encourage and support the franchisees to grow and make sure
that there is a solid pipeline of new stores in both core markets of UK &
Ireland that will build upon the growth for FY25 to date.
Store sales trends have been very positive in recent times, with the Company
benefitting from the 'working from home' trend, which we are confident will
remain in one form or another as a permanent change in consumer behaviour in
the post Covid environment.
The Company added a net eight new stores to the franchised network in the UK
and Ireland during the six month period. The number of stores is expected to
grow in the second half of the year, with eight further store openings planned
in the UK and two in Ireland. We anticipate that this will take the total
number of stores to around 90 in the UK and Ireland by the end of March 2025,
with the total store numbers expected to reach 110 across the whole Group.
Esquires UK achieved record daily sales per store in October 2024 and,
following a strong performance in the first six months, the Directors are
confident that the business models are well suited to the current consumer
market. These positive results are being achieved despite the concerns being
expressed regarding the general economic outlook. The expansion of the
successful Regional Development model will assist in accelerating growth in
the network in the UK. The Company is seeking Regional Development partners
for Scotland and Northern Ireland.
Business Performance
Esquires Coffee United Kingdom
UK store numbers were 68 at the end of September 2024, up from 60 as of 31
March 2024. Sales from the Esquires outlets for the six month period were up
36% compared to the same period in FY24.
The average per outlet store sales for the first six months increased 16%
compared to FY24, reflecting the successful implementation of our strategy to
enhance store locations.
The Regional Developer model in the UK has proved to be a significant driver
of store growth, especially in the South & East of England. With two new
Regional Developers being appointed in the second half, the Company expects to
see the tangible results of their involvement develop over time.
During the year, two stores at Horsham and Dorking were renovated, with sales
showing gains in excess of 50% in each store for the first three months of
opening post renovations compared to prior year sales.
As of January 2024, industry specialists Allegra reported that the UK branded
café market comprised of 10,199 stores with store sales of £5.3 billion
which is projected to grow to £7.2 billion by 2029 with the numbers of
branded stores estimated to be 11,629. There were 12,212 Independent cafés
with store sales of £4.6 billion at January 2024 which is expected to grow to
13,214 stores with total sales of £5.6 billion by 2029. The total market for
cafés in the UK is £9.9 billion and this is projected to grow to £12.9
billion by 2029. Branded café sales share is projected to grow from 53% in
2024 to 56% in 2029.
The Esquires current share of stores is only 0.3% of the total stores in the
UK and our aim is to grow this to at least 0.5% by 2029. This shows the
significant potential that exists in the UK market where the café density is
considerably lower per capita than in New Zealand.
Esquires Ireland
Brendan Duigenan was appointed Managing Director in May 2024 following the
retirement of Tony McVerry who founded the business in Ireland in 2002.
Brendan has been with Esquires Coffee in Ireland for five years as Operations
Manager and prior to that had extensive experience in senior roles in
Starbucks and AMT Coffee in Ireland.
Brendan has recently appointed Barry Gardner as General Manager of Operations.
Barry has excellent experience in the café business in Ireland and most
recently has managed several cafes within the well known Arboretum group of
Garden Centres.
The Galway (Eyre Square) store is now under new management with Agata
Danielkiewicz, the franchisee in Limerick taking over both this store and the
Limerick site from June 2024. Sales in the store have grown by 14% since the
change and the Company is proud that the new owner has maintained the store's
position as the best-loved coffee shop in Galway, holding the number one spot
for cafés on TripAdvisor for the past several years.
According to Allegra, the Irish branded café market is reported to have 705
stores as at March 2024 and is projected to grow at 2.6% CAGR to 2029 when the
numbers of branded stores are estimated to be 800. The Esquires current share
of stores is 2.1% and the Company is planning to increase this to 3.75% by
March 2029.
International
Store sales in Portugal where Esquires has two stores in Porto have grown by
44% over last year. The original store is 14% ahead of last year in sales
whilst the franchisee has added a new store in the same general area of Porto.
In Pakistan, the Esquires business is growing under a new Master Franchisee
with store sales for the six months to September at more than double the
levels of 12 months ago. There are now 6 outlets in Karachi with growth plans
to add more, along with moving into other regions of Pakistan based on the
confidence gained in Karachi.
In Saudi Arabia, sales have declined as the Jeddah Airport contract for one of
the two stores came to an end. The Airport accounts for more than 60% of the
total sales in Saudi Arabia but, whilst this has had an impact in this region,
it is not material to the Group.
ESG
The Board has established a formal ESG Committee with Elena Garside as Chair.
The committee includes Directors and Senior management and will be an
important body to oversee the Company's progress in this key area. Below are
some examples of the strategies that are already in place.
· The Company's contract coffee roastery is believed to be the first roastery in
the world to be certified carbon neutral and has achieved the carbon neutral
Gold Standard.
· The Company's coffee is 100% Fairtrade and organic.
· Eco friendly thermal mugs & Keep Cups on sale with reduction in menu
pricing when refilling.
· 100% recyclable disposable take out cups, paper bags and serviettes.
· Bio Ferma plant-based cleaning products with a view to replacing toxic
chemicals.
· Biodegradable paper-based straws to replace plastic.
· Wooden cutlery and paper-based plates to replace plastic in certain locations.
· Digital menu screens to save on having to change paper-based menus.
Corporate - Transition to UK
The Company is continuing its planned transition to relocate the business to
the UK where most of the business operates. This will improve efficient
working practices and focus the business on its growth strategy in the core
markets of UK and Ireland.
In July, we were delighted to welcome Gareth Lloyd-Jones and Gordon Robinson
as Non-Executive Directors based in London. As planned, Mike Hutcheson and
Paul Elliott stepped aside after long and excellent service as Directors. We
have been grateful for the excellent contributions from Mike and Paul who have
added considerable value. Gordon Robinson, an experienced Non-Executive
Director has assumed the role of Chairman of the Audit & Risk Committee,
Elena Garside is heading up the ESG committee and Gareth Lloyd-Jones who has
extensive experience with franchising and public companies with his
involvement in Tie Rack and Maddison Coffee has taken on the role of building
greater relationships with the capital markets in the UK along with the CEO
and Chairman.
As reported in the Annual Report, the Company appointed Aiden Keegan as CEO
with effect from 1(st) April 2024. Recently, Katherine Scott has been
appointed CFO and both Aiden and Katherine have joined the Board as Executive
Directors as is customary in the UK.
Summary and Outlook
The Directors believe that the Company has turned a corner which is evidenced
by its return to profitability. The prospects for the Company for the
remainder of the financial year and beyond are encouraging as the trading
momentum has continued and store sales trends have been very positive. There
is a solid pipeline of new stores in both core markets of UK & Ireland.
The Cooks Coffee model being operated by Esquires is based on a locally
focused franchised network and is very scalable in a capital light manner.
With the focus on core markets, we believe that we have critical mass with an
ability to grow rapidly in exciting growth markets.
In Ireland there is a solid pipeline of new store opportunities that we expect
to deliver in the second half of the year.
The target of having 300 stores in the UK and Ireland within 10 years remains,
and the solid base being established in these core markets will enable
expansion in other attractive markets and provide the base for potential value
enhancing opportunities that will add to shareholder value.
Given the solid pipeline of new stores, the Company expects that we will
continue to grow the number of Esquires outlets operating in UK & Ireland
by the end of March 2025 and we expect to have more than 100 stores operating
during 2025. With the Company now firmly back into growth and encouraged by
current trading we remain confident about the future prospects of the Group
and view the future with optimism.
Keith Jackson
Executive Chairman
Note: The Company's reporting currency is New Zealand Dollars ("$")
Unaudited Condensed Interim Statement of Change in Equity
For the six months ended 30 September 2024
30 September 30 September
2024 2023
Notes $'000 $'000
Continuing operations
Revenue 2,579 2,040
Grant and other income 163 119
Raw materials and consumables used (22) (13)
Depreciation and amortisation (11) (32)
Impairment loss on receivables (72) -
Net foreign exchange (losses)/gains (19) (9)
Employee costs (976) (960)
Other expenses (918) (1,197)
Operating profit 724 (52)
Interest Income 765 657
Finance costs (955) (924)
Profit before income tax 534 (319)
Income tax (expense)/credit - -
Profit for the period from continuing operations 534 (319)
Net profit/(loss) for the period from discontinued operations - (5,272)
Net profit for the period attributable to shareholders 534 (5,591)
Other comprehensive income
Items that may be subsequently reclassified to profit or loss
Change in foreign currency translation reserve 23 435
Total comprehensive profit/(loss) for the period attributable to 557 (5,156)
shareholders
Total comprehensive income/(loss) for the period attributable to Shareholders
of the parent arises from:
- Continuing operations 557 190
- Discontinued operations - (5,346)
557 (5,156)
Profit/(loss) per share:
Basic and diluted profit/(loss) per share (New Zealand Cents) from continuing 3 0.87 (9.46)
and discontinued operations:
Basic and diluted profit/(loss) per share (New Zealand Cents) from continuing 3 0.87 (0.54)
operations:
Basic and diluted profit/(loss) per share (New Zealand Cents) from 3 - (8.92)
discontinued operations:
The attached notes form part of and are to be read in conjunction with these
financial statements.
Unaudited Condensed Interim Statement of Change in Equity
For the six months ended 30 September 2024
Attributable to Equity holders of the Company
Share Capital Foreign Currency Translation Reserve Share Based Payment Reserve Accumulated Profit/(Loss) Total Equity
Notes $'000 $'000 $'000 $'000 $'000
Balance at 1 April 2023 58,345 971 2,401 (60,956) 761
Comprehensive income/(loss) for the year
Gain/(Loss) for the year - - - (6,359) (6,359)
Other comprehensive income
Items that may be subsequently reclassified to profit or loss:
Release of foreign currency translation reserve
relating to Triple 2 - (140) - - (140)
Change in foreign currency translation reserve - 1,237 - - 1,237
Total comprehensive income/(loss) for the year - 1,097 - (6,359) (5,262)
Transactions with owners of the Company
Issue of ordinary shares 500 - - - 500
Change in share based payment reserve - - (2,401) 2,401 -
Total contributions by owners of the Company 500 - (2,401) 2,401 500
Balance at 31 March 2024 58,845 2,068 - (64,914) (4,001)
Balance at 1 April 2024
Comprehensive income/(loss) for the period
Gain/(Loss) for the period - - - 534 534
Other comprehensive income
Items that may be subsequently reclassified to profit or loss:
Change in foreign currency translation reserve - 23 - - 23
Total comprehensive income/(loss) for the period - 23 - 534 557
Transactions with owners of the Company
Issue of ordinary shares 433 - - - 433
Total contributions by owners of the Company 433 23 - 534 990
Balance at 30 September 2024 59,278 2,091 - (64,380) (3,011)
The attached notes form part of and are to be read in conjunction with these
financial statements.
Unaudited Condensed Interim Statement of Financial Position
For the six months ended 30 September 2024
30 September 31 March
2024 2024
Notes $'000 $'000
Assets
Current Assets
Cash and cash equivalents 211 1,174
Trade and other receivables 1,698 1,718
Lease receivables 3,499 2,892
Other current assets 1,042 1,049
Assets classified as held-for-sale 9 -
Current Assets 6,459 6,833
Non-Current Assets
Property, plant and equipment 92 92
Right-of-use assets - -
Lease receivables 20,583 20,163
Goodwill - -
Intangible assets 2,831 2,831
Other non-current financial assets 15 15
Non-Current Assets 23,521 23,101
Total Assets 29,980 29,934
Liabilities
Current Liabilities
Trade and other payables 3,086 4,521
Deferred Revenue 544 580
Lease liabilities 3,499 2,892
Borrowings and other liabilities 1,614 1,806
Current Liabilities 8,743 9,799
Non-Current Liabilities
Deferred Revenue 2,288 2.696
Lease liabilities 20,583 20,163
Deferred tax liabilities - -
Borrowings and other liabilities 1,377 1,277
Non-Current Liabilities 24,248 24,136
Total Liabilities 32,991 33,935
Net Assets/(Liabilities) (3,011) (4,001)
Equity
Share capital 4 59,278 58,845
Accumulated losses (64,380) (64,914)
Foreign currency translation reserve 2,091 2,068
Share based equity reserve - -
Total Equity (3,011) (4,001)
Net tangible assets per share (New Zealand Cents) (9.02) (11.39)
The attached notes form part of and are to be read in conjunction with these
financial statements.
Unaudited Condensed Interim Statement of Cash Flows
For the six months ended 30 September 2024
30-Sept 31-Mar
2024 2024
Notes $'000 $'000
Operating activities
Cash was provided from:
Receipts from customers 2,328 6,784
Cash was applied to:
Interest cost (131) (527)
Payments to suppliers & employees (3,380) (4,572)
Discontinued operations - (612)
Net cash provided from/(applied to) operating activities (1,183) 1,073
Investing activities
Cash was provided from:
Disposal of property, plant and equipment - 12
Cash was applied to:
Purchase of property, plant and equipment (9) (5)
Acquisition of intangible assets - -
Discontinued operations - (2)
Net cash provided from/(applied to) investing activities (9) 5
Financing activities
Cash was provided from:
Proceeds from borrowings 91 810
Proceeds from share issue 433 107
Cash was applied to:
Principal elements of lease payments 48 (24)
Repayment of borrowings (367) (1,047)
Discontinued operations - (195)
Net cash provided from/(applied to) financing activities 205 (349)
Net increase/(decrease) in cash and cash equivalents held (987) 729
Cash & cash equivalents at beginning of the year 1,174 445
Effect of exchange rate changes on foreign currency balances 24 -
Cash & cash equivalents at end of the year 211 1,174
Composition of cash and cash equivalents:
Bank balances 211 1,174
The attached notes form part of and are to be read in conjunction with these
financial statements.
Unaudited Condensed Interim Statement of Cash Flows
For the six months ended 30 September 2024
The following is a reconciliation between profit after taxation for the period
shown in the statement of comprehensive income and net cash flows applied to
operating activities from continuing operations.
30 September 31 March
2024 2024
$'000 $'000
Profit/(Loss) after tax 534 (356)
Add non-cash items:
Depreciation and amortisation 11 24
Impairment loss 72 133
Net foreign exchange (losses)/gains 19 29
Add/(Less) movements in assets/liabilities: (1,819) 1,855
Net cash flow applied to operating activities (1,183) 1,685
The attached notes form part of and are to be read in conjunction with these
financial statements.
Notes to and forming part of the Unaudited Interim Financial Statements
For the six months ended 30 September 2024
The Group's reportable segments are business units deriving Royalties, Product
Sales, Franchise Fees and New Store Construction Revenue from Franchisees in
geographical locations.
The New Zealand segment represents the head office operation for the Group.
The franchise coffee store business, operating under the Esquires brand,
covers the New Zealand Global Franchise trading entity and all regions owned
by third party Master Franchisees; and the UK and Ireland franchising business
segment owned directly by the Group.
There were no discontinued operations in the six months ended 30 September
2024.
Segment information for the reporting period is as follows:
Continuing Operations
30 September 2024 Global franchising & retail UK & IRE franchising New Zealand Total
$'000 $'000 $'000 $'000
Global operational splits
Revenue 99 2,480 - 2,579
Grant and other income 10 153 - 163
Raw materials and consumables used - (22) - (22)
Depreciation and amortisation - (11) - (11)
Impairment loss on receivables (41) (31) - (72)
Net foreign exchange (losses)/gains (3) - (16) (19)
Employee costs - (807) (169) (976)
Other expenses - (534) (384) (918)
Operating profit/(loss) 65 1,228 (569) 724
Interest income - 765 - 765
Finance costs - (788) (167) (955)
Profit/(loss) before income tax 65 1,205 (736) 534
Income tax (expense)/credit - - - -
Profit/(loss) for the period from continuing operations 65 1,205 (736) 534
Non-current assets
Intangible assets 42 1,308 1,481 2,831
Property, plant and equipment - 91 1 92
Continuing Operations
30 September 2023 Global franchising & retail UK & IRE franchising New Zealand Total
$'000 $'000 $'000 $'000
Global operational splits
Revenue 36 2,006 (2) 2,040
Grant and other income - 119 - 119
Raw materials and consumables used - (13) - (13)
Depreciation and amortisation - (31) (1) (32)
Net foreign exchange (losses)/gains 4 5 (18) (9)
Employee costs - (873) (87) (960)
Other expenses (88) (411) (698) (1,197)
Operating profit/(loss) (48) 802 (806) (52)
Finance costs - (18) (249) (267)
Profit/(loss) before income tax (48) 784 (1,055) (319)
Income tax (expense)/credit - - - -
Profit/(loss) for the period from continuing operations (48) 784 (1,055) (319)
Non-current assets
Intangible assets 42 1,308 1,481 2,831
Property, plant and equipment - 98 2 100
Discontinued operations
30 September 2023 UK Franchising & retail Total
$'000 $'000
Global operational splits
Revenue 1,074 1,074
Raw materials and consumables used (258) (258)
Depreciation and amortisation (6) (6)
Employee costs (494) (494)
Other expenses (791) (791)
Operating profit/(loss) (475) (475)
Finance costs (9) (9)
Loss on disposal of subsidiary (4,788) (4,788)
Profit/(loss) before income tax (5,272) (5,272)
Income tax (expense)/credit - -
Profit/(loss) for the period from continuing operations (5,272) (5,272)
Non-current assets
Property, plant and equipment 144 14
1. General information
Cooks Coffee Company Limited ("Company" or "Parent"), together with its
subsidiaries (the "Group") operate in the food and beverage industry.
The Company is a limited liability company incorporated and domiciled in New
Zealand and is listed on the NZX Main Market board of the New Zealand stock
exchange.
Statutory base
The Company is registered under the Companies Act 1993 and is an FMC reporting
entity under part 7 of the Financial Markets Conduct Act 2013.
Reporting framework
The unaudited interim financial statements have been prepared in accordance
with New Zealand Generally Accepted Accounting Practice (NZ GAAP). They comply
with New Zealand equivalents to International Financial Reporting Standards
("IFRS") and other applicable New Zealand Reporting Standards as appropriate
for profit-oriented entities. The financial statements comply with IFRS. These
policies have been consistently applied to all periods presented, unless
otherwise noted.
These financial statements for the six months ended 30 September 2024 have
been prepared in accordance with NZ IAS 34, Interim Financial Reporting and
should be read in conjunction with the financial statements published in the
Annual Report for the year ended 31 March 2024. They also comply with the
International Accounting Standard 34 interim Financial Reporting (IAS 34).
2. Changes in significant accounting policies
Except as described below, the accounting policies applied by the Group in
these consolidated interim financial statements are the same as those applied
by the Group in its consolidated financial statements for the year ended 31
March 2024. The Group has not applied any standards, amendments and
interpretations that are not yet effective.
3. Profit/(loss) per share
Basic profit/(loss) per share is calculated by dividing the profit/(loss)
attributable to ordinary shareholders of the Company by the weighted average
number of ordinary shares outstanding for the period.
Diluted profit/(loss) per share is determined by dividing the profit/(loss)
attributable to ordinary shareholders and the weighted average number of
shares outstanding for the effects of any dilutive potential ordinary shares.
Net tangible assets per share is determined by dividing the net asset value of
the Group, adjusted by the intangible assets, and the number of shares issued
at the end of the period.
The weighted average numbers of shares are calculated below:
30 September 2024 31 March 2024
Weighted average ordinary shares issued 61,348,261 58,526,330
Weighted average potentially dilutive options issued - -
Basic and diluted profit/(loss) per share (New Zealand Cents) from continuing 0.87 (10.84)
and discontinued operations:
Basic and diluted profit/(loss) per share (New Zealand Cents) from continuing 0.87 (0.61)
operations:
Basic and diluted profit/(loss) per share (New Zealand Cents) from - (10.23)
discontinued operations:
Net tangible assets per share (New Zealand Cents) (9.02) (11.39)
4. Share Capital
The share capital of Cooks Global Foods Limited consists of issued ordinary
shares, each share representing one vote at the company's shareholder
meetings. The par value is nil (2024: nil). All shares are equally eligible to
receive dividends and the repayment of capital.
Movement of share capital 30 September 2024 31 March 2024
Number of Shares issued: No. of Shares No. of Shares
Ordinary shares opening balance 60,002,449 60,726,348
Ordinary shares issued 4,736,222 2,706,263
Ordinary shares cancelled - (3,430,163)
Total ordinary shares authorised at end of period 64,738,671 60,002,449
Movements of share capital 30 September 2024 31 March 2024
Value of Shares issued: $'000 $'000
Ordinary shares opening balance 58,845 58,345
Ordinary shares buyback - (5)
Ordinary shares issued less share issue expenses 433 505
Total ordinary shares authorised at period end 59,278 58,845
The company now has 64,238,671 quoted shares and 500,000 non-voting shares on
issue at 30 September 2024. During the year 4,736,222 shares were issued on 9
August 2024 at a value of $530,500.
At 30 September 2024, $nil of the ordinary share capital is unpaid (31 March
2024: $nil).
5. Related party transactions
The Group's related parties include the directors and senior management
personnel of the Group, and any associated parties as described below.
Unless otherwise stated, none of the transactions incorporate special terms
and conditions and no guarantees were given or received.
Keith Jackson is a director of Cooks Investment Holdings Limited, Jackson
& Associates Limited, Weihai Station Limited and a trustee of Nikau Trust.
Mike Hutcheson is a director of Image Centre Limited and Lighthouse Ventures
Holdings Limited, resigned 10 July 2024.
Paul Elliott is a director of Elliott Capital Advisors Limited, resigned
30(th) September 2024.
Michael Ambrose is a director of Ashville Consultancy Limited.
Peihuan Wang is a director of Jiajiayue Holding Group Limited and Weihai
Station Limited.
Elena Garside is a director of Garside & Garside Ltd.
Tony McVerry is a director of Esquires Coffee Houses Ireland Limited, retired
30 May 2024.
Aiden Keegan is a director of Esquires Coffee UK Limited.
Gareth Lloyd-Jones is a director of Argentine Steak House, Buenasado
(Reading), High Road Restaurant Group, The Small & Friendly Pub Co, Taga
Restaurant, The Arnold Foundation for Rugby School.
Gordon Robinson is a director of Sterling BAPC Ltd, KCR Residential REIT PLC
and Vector Capital
PLC.
Transactions with related parties
30 September 31 March
2024 2024
$'000 $'000
Purchases of goods and services
Purchase of management services 120 240
Interest paid to related parties 171 282
Other transactions
Related party receivables - -
Subscriptions for new ordinary shares - 181
Funding loans advanced by related parties - 210
Balances outstanding with related parties
30 September 31 March
2024 2024
$'000 $'000
Outstanding balances arising from purchases of goods and services
Entities controlled by key management personnel 724 649
Loans to related parties
Beginning of the year 1,952 1,842
Loans advanced - 210
Loans repaid - (60)
Net foreign exchange effects (24) 8
Interest charged 129 234
Interest paid (171) (282)
Balance end of period 1,886 1,952
Other receivables from related parties
Beginning of the year - 560
Contingent liability disposed of - (560)
Net foreign exchange effects - -
- -
Other receivables from related parties
Issued capital not yet received - -
Director transactions
30 September 31 March
2024 2024
$'000 $'000
Directors' fees 62 181
Salaries, wages and contractor payments 494 898
Share based payments - -
556 1,079
6. Capital Commitments, Contingent Liabilities
There were no capital commitments as at 30 September 2024 (31 March 2024:
$nil).
There were no changes in capital commitments, contingent liabilities and
contingent assets that would require disclosure for the six months ended 30
September 2024 (31 March 2024: $nil).
7. Going Concern
The Group reported a comprehensive gain of $557,000 (2023: $(5,156,000) for
the six-month period to 30 September 2024. The prior year included the write
down of $4,788,000 related to the impairment of the Triple Two investment.
Operating net cash outflow for the six-month period to 30 September 2024 was
$(1,183,000). For the twelve-month period ended 31 March 2024 the net cash
inflow for continuing operations was $1,685,000.
As at 30 September 2024 the Group has reported Net Liabilities of $3,011,000
(at 31 March 2024: $4,001,000) and current liabilities exceed current assets
by an amount of $2,284,000 (at 31 March 2024: $2,966,000).
The ability of the Group to pay its debts as they fall due and to realise
their assets and extinguish their liabilities in the normal course of business
at the amounts stated in the consolidated financial statements has been
considered by the Directors in the adoption of the going concern assumption
during the preparation of these financial statements.
The Directors forecast that the Group can manage its cash flow requirements at
levels appropriate to meet its cash commitments for the foreseeable future
being a period of at least 12 months from the date of authorisation of these
consolidated financial statements. In reaching this conclusion, the Directors
have considered the achievability of the plans and assumptions underlying
those forecasts. The key assumptions include:
• Opening multiple new stores in the United Kingdom in FY25, with
ten new sites opened in the first half of the year, and in excess of a further
six sites confirmed for the second half of the year.
• Group's ability to successfully conclude remaining discussions
regarding the roll-over of existing debt.
• Group's ability to raise further debt or equity funds as a
strategy to re-gear the balance sheet as part of the overall restructuring
plan that is still in progress.
• The ability of related parties of Keith Jackson to continue to
provide funding as required, and market conditions which the Group operates
in.
The Directors have reasonable expectation that the Group has sufficient
headroom in its cash resources and shareholder support to allow the Group to
continue to operate for the foreseeable future or alternatively it can manage
its working capital requirements to create additional required headroom.
Whilst the Directors acknowledge that there are capital raising, credit,
exchange and liquidity risks in the global economic market in which the Group
operates, they are confident that additional capital or funding will be
sourced by the Group. In particular, the Directors have received a
confirmation from related parties of Keith Jackson, that they will continue to
financially support the Group for the foreseeable future. They note the Group
has a track record of obtaining financial support from cornerstone investors
and related parties and, where necessary, negotiating the deferment of debt
repayments.
The Directors are also confident that operating cash flows will continue to
improve as a result of the activities that are being undertaken to reduce the
extent of cash outflow and improve profitability.
The Directors continue to consider other opportunities to further improve the
Group's cash position which include discussing collaborations with partners
overseas, negotiations with potential strategic equity partners, investigating
new facility lines, ongoing discussions in the UK and Ireland relating to
potential acquisitions, and greater focus on improving existing core business
activities.
After considering all available information, the Directors have concluded that
there are reasonable grounds to believe that the forecasts and plans are
achievable, the Group will be able to pay its debts as and when they become
due and payable, there is sufficient headroom in available cash resources, and
the basis of preparation of the financial report on a going concern basis is
appropriate.
Should the Group be unable to continue as a going concern it may be required
to realise its assets and discharge its liabilities other than in the normal
course of business and at amounts different to those stated in the
consolidated financial statements. The consolidated financial statements do
not include any adjustments relating to the recoverability and classification
of asset carrying amounts or the amount of liabilities that might result
should the Group be unable to continue as a going concern and meets its debts
as and when they fall due.
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