TIDMREG
RNS Number : 9816N
Regent Inns PLC
27 February 2009
Friday, 27 February 2009
Regent Inns PLC
Half Year results for the 26 weeks ended 27 December 2008
Regent Inns plc ("Regent" or "the Company"), the operator of UK late-night,
entertainment-led venues and restaurants, today announced its results for the 26
weeks ended 27 December 2008. Regent's core brands are Walkabout, Jongleurs and
Old Orleans.
Summary:
* Sales GBP67.6m (2007: GBP77.1m).
* Like-for-like sales declined by 12.2% against last year.
* Operating profit: GBP1.3m (2007: GBP4.0m).
* Operating profit before exceptionals: GBP1.8m (2007: GBP4.3m).
* Loss before tax: GBP2.3m (2007 Profit before tax: GBP1.0m).
* Basic loss per share: 3.0p (2007: Earnings per share: 0.5p).
* Operating cash flow: GBP2.4m (2007: GBP6.8m).
* Reduction in net debt by GBP0.5m to GBP78.4m.
* Forward focus on maximising cash flow and further reducing debt.
* Disposal of certain non-core and other assets in process.
Jim Glover, Non-Executive Chairman, commented:
"Market conditions facing the sector have been very challenging. However, we
have successfully managed cash flow, made progress with operational
restructuring and, despite very difficult circumstances, reduced net debt during
the period."
- Ends -
+------------------------------------+------------------------------------+
| Enquiries: | |
| | |
+------------------------------------+------------------------------------+
| Merlin PR | 020 7653 6620 |
| | |
+------------------------------------+------------------------------------+
| Paul Downes | |
+------------------------------------+------------------------------------+
| Rachel Thomas | |
+------------------------------------+------------------------------------+
+-------------------+--+--------------------------------------------------+
| Attached: | | Chairman's Statement |
+-------------------+--+--------------------------------------------------+
| | | Consolidated Income Statement, Statement of |
| | | Changes in Shareholders' Funds, Balance Sheet, |
| | | Cash Flow Statement |
+-------------------+--+--------------------------------------------------+
| | | Notes to the Financial Statements |
+-------------------+--+--------------------------------------------------+
CHAIRMAN'S STATEMENT
This statement reports the results for the 26 weeks ended 27 December 2008.
Market conditions for high street bars and particularly for late-night
businesses have continued to be extremely difficult throughout the period. The
Board's medium term objectives remain the maximisation of cash flow from
existing operations and the reduction of debt, whilst maintaining the integrity
of the Group's brands, and the stabilisation of sales in Walkabout. Our debt
reduction and operational restructuring plan established last year details the
measures we have implemented to achieve these objectives. We have made
substantial progress in all areas where factors are within our control. However,
like-for-like sales trends are largely unchanged.
Whilst we have seen some improvement in the Walkabout trends towards the end of
the period, Jongleurs has suffered a significant decline. The Jongleurs business
relies heavily on advance ticket sales and Christmas, in particular, is the
major opportunity to capitalise on the very profitable corporate market for
parties. Although the outbound box office sales team had its best year ever in
terms of ticket sales, interest from corporate clients was down substantially.
Exceptionally, there were also many late cancellations from companies who were
not prepared to proceed with parties at a time when they were making staff
redundant.
Comparatively, Old Orleans sales held up well although a greater reliance on
discounts has been necessary in order to compete effectively and we have
successfully protected market share in this way. Inevitably, this has impacted
margins but puts us in a good position in the market going forward.
Our lending banks continue to be supportive of the business and, as I set out in
my statement in the annual accounts published in October 2008, our banking
facilities were revised in order to ensure they are appropriate for our current
circumstances.
In summary, a GBP9.5m sales decline has resulted in a GBP2.4m decline in
operating profit before exceptionals (exceptional items, brand amortisation and
loss on sale of property). Given our relatively high fixed costs, reducing the
impact of market conditions on our profits to this level has taken enormous and
praiseworthy effort throughout the whole business. However, the powerful and
negative factors which have taken hold of the economy mean that cost reduction
alone will clearly not suffice on a long term basis and ultimately future
success will depend on rebuilding sales.
Results
Sales for the 26 week period ended 27 December 2008 decreased by 12.3% to
GBP67.6m (2007: GBP77.1m). Entertainment Bars sales were down by 14.3% to
GBP52.6m (2007: GBP61.4m) and Dining sales were down by 1.3% to GBP15.5m (2007:
GBP15.7m).
Like-for-like sales were 12.2% below last year. Our definition of like-for-like
sales was set out on page 6 of the Annual report and remains unchanged.
Like-for-like venues comprise all but four Entertainment Bars (all closures or
disposals during the half year), 18 Old Orleans sites and Ashas.
Operating profit was GBP1.3m (2007: GBP4.0m). After adding back 'exceptionals',
operating profit was GBP1.8m (2007: GBP4.3m).
Exceptional items of GBP0.3m comprised additional advisor fees associated with
amendments to the Group's banking facility as reported in the Annual Report.
Net finance costs was GBP3.7m (2007: GBP3.0m), up 24% due principally to
increased margins following amendments to the Group's banking facility and also
the repayment of the lower rate loan notes immediately after the end of the
comparative interim period. The average level of net debt in the period was
GBP1.2m higher than the comparative period.
Loss before tax was GBP2.3m (2007: profit before tax GBP1.0m). Additionally,
losses of GBP1.9m arising on the fair valuation of interest rate hedges net of
deferred tax have been charged directly to reserves through the Statement of
Changes in Equity.
Basic loss per share was 3.0p (2007: earnings per share 0.5p). Excluding
exceptionals, loss per share was 2.5p (2007: earnings per share 0.8p).
Cash flow and financing
Cash flow generated from operating activities was GBP2.4m (2007: GBP6.8m). After
adjustments for interest and tax, net cash from operating activities was GBP0.6m
(2007: GBP3.9m). Capital expenditure in the period of GBP1.5m was substantially
lower than last year (2007: GBP9.0m). Sales proceeds of GBP1.4m from the
disposal of Churchills Southend were used to pay down debt resulting in a
cancellation of facilities of the same amount. Net debt at the end of the period
was GBP78.4m, a reduction of GBP0.5m over the period and GBP2.1m lower than at
the end of the comparative period. Total bank facilities at the end of the
period amounted to GBP96.5m.
Dividend
The Board is not recommending a dividend (2007: nil pence)
Site divestments
The sale of a loss-making freehold site, Churchills in Southend was completed in
July 2008. Six Entertainment Bars and six Old Orleans sites have been actively
marketed by agents since October. In early January, Old Orleans Ealing, a
loss-making site, was surrendered to the landlord for redevelopment and the
loss-making Cathedral Hotel in Salisbury was sublet. Substantive negotiations to
dispose of a further three of the marketed sites have moved to legal
documentation with every expectation that completion will be achieved within the
coming weeks.
Our staff
We recognise that the achievement of business objectives is dependent on having
fully motivated, committed and enthusiastic staff. Towards the beginning of the
reporting period, we challenged staff throughout the business to make every
person count, to make every customer count, to make every penny count, and to
take responsibility; their response has been impressive with many contributing
great initiatives and most performing to the highest standards in this very
difficult trading environment. One area in which we have continued to invest is
training so that we are making the most from every customer visit and are well
prepared to take advantage of improving trading conditions in due course. I am
very grateful for the continued commitment of staff and I continue to be
impressed by their levels of passion for each of our businesses that I witness
on my site visits.
Principal risks and uncertainties
The principal risks and uncertainties facing the Group were outlined in the
Director's report on page 14 of the Group's Annual Report for the 52 weeks ended
28 June 2008, which is also available on the Group's website
www.regentinns.co.uk. These risks, which remain relevant for the remainder of
the current financial period and the foreseeable future, comprise: Exposure to
economic downturn and the credit crunch; Fiscal related matters; Increases in
operating costs; Declining sales of beer in pubs and increased competition;
Regulation; Effects of terrorism; Debt, liquidity and revenue risks; and
Property liabilities.
Three specific risk areas have seen significant developments since the
publication of the Annual Report.
Exposure to economic downturn and the credit crunch. The fact that the UK is
now firmly in the grip of a serious recession which is causing widespread
business failures and consequently increased unemployment have resulted in a
further downward shift in consumer confidence. This has impacted demand for the
Group's products and also makes forecasting for the coming months more
difficult. The Group's current trading forecast indicates that the Group can
operate within the terms of its committed banking facilities and accordingly the
financial statements have been prepared on a going concern basis. However,
reporting formalities demand that we must point out that the fragility of
consumer confidence is potentially such that there is an associated material
uncertainty over the Group's future performance, which may impact the Group's
ability to operate within the terms of its committed bank borrowing facility and
therefore continue as a going concern. Further information is given in note 1 to
the Interim financial statements under 'Basis of preparation'.
Fiscal related matters. In addition to the Government's previously announced
intention to increase the duty on alcoholic beverages by 2% more than the rate
of inflation in the next three years, a further increase in duty of 8% on most
alcoholic beverages was imposed on 1 December 2008 broadly equivalent to the
2.5% reduction in the rate of VAT. The VAT reduction is due to be reversed on 1
January 2010 but currently, there is no plan to reverse the duty increase.
Property liabilities. In the current economic climate, there is an increased
risk that rental defaults may occur; this risk applies to both sublet and
assigned properties. The Group has, during the course of its 28 year history,
assigned 63 leasehold properties and has sub-let another 19 properties. During
the reporting period, two previously assigned leases and one sub-let property
reverted to the Group. Two of these reversions were as a result of Food and
Drink Group going into administration. All three of these properties are in
London, and in two cases negotiations are well progressed for new assignments or
sublets.
Current trading and prospects
Like-for-like sales in the first 8 weeks of the second half were 11.7% below
last year continuing recent trends despite the very difficult weather conditions
experienced across the country in the first half of February. We remain cautious
about the future and continue to find current market conditions very
challenging.
Jim Glover
Non-Executive Chairman
27 February 2009
consolidated income statement
for the 26 weeks ended 27 December 2008
+----------------------------------------+------+----+------------+-----------+-----------+
| | | | Unaudited | Unaudited | Audited |
+----------------------------------------+------+----+------------+-----------+-----------+
| | | | 26 weeks | 26 weeks | 52 weeks |
| | | | ended | ended | ended |
+----------------------------------------+------+----+------------+-----------+-----------+
| | | | 27 | 29 | 28 June |
| | | | December | December | |
+----------------------------------------+------+----+------------+-----------+-----------+
| | | | 2008 | 2007 | 2008 |
+----------------------------------------+------+----+------------+-----------+-----------+
| |Note | | GBP'000 | GBP'000 | GBP'000 |
+----------------------------------------+------+----+------------+-----------+-----------+
| | | | Total | Total | Total |
+----------------------------------------+------+----+------------+-----------+-----------+
| Continuing operations | | | | | |
+----------------------------------------+------+----+------------+-----------+-----------+
| Revenue | 4 | | 67,640 | 77,136 | 148,060 |
+----------------------------------------+------+----+------------+-----------+-----------+
| Cost of sales | 4 | | (17,542) | (18,569) | (34,110) |
+----------------------------------------+------+----+------------+-----------+-----------+
| Gross profit | 4 | | 50,098 | 58,567 | 113,950 |
+----------------------------------------+------+----+------------+-----------+-----------+
| Operating costs | 4 | | (48,725) | (54,596) | (165,959) |
+----------------------------------------+------+----+------------+-----------+-----------+
| | | | | | |
+----------------------------------------+------+----+------------+-----------+-----------+
| Operating profit/(loss) | | | 1,373 | 3,971 | (52,009) |
+----------------------------------------+------+----+------------+-----------+-----------+
| | | | | | |
+----------------------------------------+------+----+------------+-----------+-----------+
| Analysed as: | | | | | |
+----------------------------------------+------+----+------------+-----------+-----------+
| Operating profit before exceptional | | | 1,828 | 4,267 | 6,111 |
| items, loss on sale of property, plant | | | | | |
| and equipment and brand amortisation | | | | | |
+----------------------------------------+------+----+------------+-----------+-----------+
| Exceptional items | 5 | | | | |
+----------------------------------------+------+----+------------+-----------+-----------+
| Impairment provision | | | - | - | (44,462) |
+----------------------------------------+------+----+------------+-----------+-----------+
| Provision for onerous leases | | | - | - | (9,552) |
+----------------------------------------+------+----+------------+-----------+-----------+
| Other | | | (302) | - | (3,031) |
+----------------------------------------+------+----+------------+-----------+-----------+
| Loss on sale of property, plant and | | | (68) | (146) | (775) |
| equipment | | | | | |
+----------------------------------------+------+----+------------+-----------+-----------+
| Brand amortisation | | | (85) | (150) | (300) |
+----------------------------------------+------+----+------------+-----------+-----------+
| | | | | | |
+----------------------------------------+------+----+------------+-----------+-----------+
| Finance costs | 6 | | (3,823) | (3,067) | (6,151) |
+----------------------------------------+------+----+------------+-----------+-----------+
| Finance income | 6 | | 89 | 62 | 92 |
+----------------------------------------+------+----+------------+-----------+-----------+
| | | | | | |
+----------------------------------------+------+----+------------+-----------+-----------+
| (Loss)/profit before taxation | | | (2,361) | 966 | (58,068) |
+----------------------------------------+------+----+------------+-----------+-----------+
| | | | | | |
+----------------------------------------+------+----+------------+-----------+-----------+
| Taxation | 7 | | (931) | (367) | 6,998 |
+----------------------------------------+------+----+------------+-----------+-----------+
| | | | | | |
+----------------------------------------+------+----+------------+-----------+-----------+
| (Loss)/profit for the period | | | (3,292) | 599 | (51,070) |
+----------------------------------------+------+----+------------+-----------+-----------+
| | | | | | |
+----------------------------------------+------+----+------------+-----------+-----------+
| | | | | | |
+----------------------------------------+------+----+------------+-----------+-----------+
| Earnings per share | | | | | |
+----------------------------------------+------+----+------------+-----------+-----------+
| - basic | 9 | | (3.0)p | 0.5p | (45.9)p |
+----------------------------------------+------+----+------------+-----------+-----------+
| - diluted | 9 | | (3.0)p | 0.5p | (45.9)p |
+----------------------------------------+------+----+------------+-----------+-----------+
Statement of changes in equity
for the 26 weeks ended 27 December 2008
+--------------------------+---------+---------+---------+-------------+---------+----------+-----------+
| | | | | | | | Unaudited |
+--------------------------+---------+---------+---------+-------------+---------+----------+-----------+
| | Share | Share | Capital | Convertible | Equity | Profit | |
| | | | | | | & loss | |
+--------------------------+---------+---------+---------+-------------+---------+----------+-----------+
| | Capital | Premium | Reserve | Bond | Reserve | account | Total |
| | | | | reserve | | | |
+--------------------------+---------+---------+---------+-------------+---------+----------+-----------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+--------------------------+---------+---------+---------+-------------+---------+----------+-----------+
| | | | | | | | |
+--------------------------+---------+---------+---------+-------------+---------+----------+-----------+
| At 1 July 2007 | 5,666 | 50,618 | (509) | 60 | 902 | 12,028 | 68,765 |
+--------------------------+---------+---------+---------+-------------+---------+----------+-----------+
| Profit for the period | - | - | - | - | - | 599 | 599 |
+--------------------------+---------+---------+---------+-------------+---------+----------+-----------+
| Losses arising on | - | - | - | - | - | (872) | (872) |
| interest rate hedges net | | | | | | | |
| of deferred tax | | | | | | | |
+--------------------------+---------+---------+---------+-------------+---------+----------+-----------+
| Own shares acquired | - | - | (1,000) | - | - | - | (1,000) |
+--------------------------+---------+---------+---------+-------------+---------+----------+-----------+
| Share-based payments | - | - | - | - | 134 | - | 134 |
+--------------------------+---------+---------+---------+-------------+---------+----------+-----------+
| At 29 December 2007 | 5,666 | 50,618 | (1,509) | 60 | 1,036 | 11,755 | 67,626 |
+--------------------------+---------+---------+---------+-------------+---------+----------+-----------+
| Convertible loan note | - | - | - | (60) | - | - | (60) |
| redeemed | | | | | | | |
+--------------------------+---------+---------+---------+-------------+---------+----------+-----------+
| Loss for the period | - | - | - | - | - | (51,669) | (51,669) |
+--------------------------+---------+---------+---------+-------------+---------+----------+-----------+
| Gains arising on | - | - | - | - | - | 464 | 464 |
| interest rate hedges net | | | | | | | |
| of deferred tax | | | | | | | |
+--------------------------+---------+---------+---------+-------------+---------+----------+-----------+
| Share-based payment | - | - | - | - | (22) | - | (22) |
| credit | | | | | | | |
+--------------------------+---------+---------+---------+-------------+---------+----------+-----------+
| At 28 June 2008 | 5,666 | 50,618 | (1,509) | - | 1,014 | (39,450) | 16,339 |
+--------------------------+---------+---------+---------+-------------+---------+----------+-----------+
| Loss for the period | - | - | - | - | - | (3,292) | (3,292) |
+--------------------------+---------+---------+---------+-------------+---------+----------+-----------+
| Losses arising on | - | - | - | - | - | (1,898) | (1,898) |
| interest rate hedges net | | | | | | | |
| of deferred tax | | | | | | | |
+--------------------------+---------+---------+---------+-------------+---------+----------+-----------+
| Share-based payment | - | - | - | - | (109) | - | (109) |
| credit | | | | | | | |
+--------------------------+---------+---------+---------+-------------+---------+----------+-----------+
| | | | | | | | |
+--------------------------+---------+---------+---------+-------------+---------+----------+-----------+
| At 27 December 2008 | 5,666 | 50,618 | (1,509) | - | 905 | (44,640) | 11,040 |
+--------------------------+---------+---------+---------+-------------+---------+----------+-----------+
| | | | | | | | |
+--------------------------+---------+---------+---------+-------------+---------+----------+-----------+
consolidated balance sheet
as at 27 December 2008
+----------------------------------------+------+--------------+------------+-----------+
| | | Unaudited | Unaudited | Audited |
+----------------------------------------+------+--------------+------------+-----------+
| | | 27 December | 29 | 28 June |
| | | | December | |
+----------------------------------------+------+--------------+------------+-----------+
| | | 2008 | 2007 | 2008 |
+----------------------------------------+------+--------------+------------+-----------+
| | | GBP'000 | GBP'000 | GBP'000 |
+----------------------------------------+------+--------------+------------+-----------+
| Assets | | | | |
+----------------------------------------+------+--------------+------------+-----------+
| Non-current assets | | | | |
+----------------------------------------+------+--------------+------------+-----------+
| Intangible assets | 10 | 8,418 | 24,485 | 8,503 |
+----------------------------------------+------+--------------+------------+-----------+
| Property, plant and equipment | 11 | 121,944 | 157,865 | 124,702 |
+----------------------------------------+------+--------------+------------+-----------+
| Derivative financial instruments | | - | 158 | 919 |
+----------------------------------------+------+--------------+------------+-----------+
| Other non-current assets | | 2,147 | 2,290 | 2,218 |
+----------------------------------------+------+--------------+------------+-----------+
| | | 132,509 | 184,798 | 136,342 |
+----------------------------------------+------+--------------+------------+-----------+
| Current assets | | | | |
+----------------------------------------+------+--------------+------------+-----------+
| Inventories | | 2,209 | 2,578 | 2,183 |
+----------------------------------------+------+--------------+------------+-----------+
| Trade and other receivables | | 8,671 | 9,362 | 7,890 |
+----------------------------------------+------+--------------+------------+-----------+
| Derivative financial instruments | | - | 80 | - |
+----------------------------------------+------+--------------+------------+-----------+
| Assets held for sale | | 210 | 210 | 1,685 |
+----------------------------------------+------+--------------+------------+-----------+
| Cash and cash equivalents | | 6,092 | 6,738 | 4,053 |
+----------------------------------------+------+--------------+------------+-----------+
| | | 17,182 | 18,968 | 15,811 |
+----------------------------------------+------+--------------+------------+-----------+
| Current liabilities | | | | |
+----------------------------------------+------+--------------+------------+-----------+
| Financial liabilities | | | | |
+----------------------------------------+------+--------------+------------+-----------+
| Borrowings | 12 | (2,808) | (2,787) | (2,725) |
+----------------------------------------+------+--------------+------------+-----------+
| Derivative financial instruments | | (104) | - | (21) |
+----------------------------------------+------+--------------+------------+-----------+
| Unsecured convertible loan notes | | - | (5,940) | - |
+----------------------------------------+------+--------------+------------+-----------+
| Finance leases | | - | (36) | - |
+----------------------------------------+------+--------------+------------+-----------+
| Trade and other payables | | (23,851) | (21,348) | (23,742) |
+----------------------------------------+------+--------------+------------+-----------+
| Current tax liabilities | | (1,161) | (784) | (570) |
+----------------------------------------+------+--------------+------------+-----------+
| Provisions | 13 | (3,800) | (1,910) | (1,395) |
+----------------------------------------+------+--------------+------------+-----------+
| | | (31,724) | (32,805) | (28,453) |
+----------------------------------------+------+--------------+------------+-----------+
| | | | | |
+----------------------------------------+------+--------------+------------+-----------+
| Net current liabilities | | (14,542) | (13,837) | (12,642) |
+----------------------------------------+------+--------------+------------+-----------+
| | | | | |
+----------------------------------------+------+--------------+------------+-----------+
| Total assets less current liabilities | | 117,967 | 170,961 | 123,700 |
+----------------------------------------+------+--------------+------------+-----------+
| | | | | |
+----------------------------------------+------+--------------+------------+-----------+
| Non-current liabilities | | | | |
+----------------------------------------+------+--------------+------------+-----------+
| Financial liabilities | | | | |
+----------------------------------------+------+--------------+------------+-----------+
| Borrowings | 12 | (81,524) | (77,996) | (79,945) |
+----------------------------------------+------+--------------+------------+-----------+
| Derivative financial instruments | | (1,633) | - | - |
+----------------------------------------+------+--------------+------------+-----------+
| Finance leases | | - | (30) | - |
+----------------------------------------+------+--------------+------------+-----------+
| Deferred tax liabilities | | (14,481) | (21,243) | (14,287) |
+----------------------------------------+------+--------------+------------+-----------+
| Other non-current liabilities | | (1,867) | (1,948) | (1,909) |
+----------------------------------------+------+--------------+------------+-----------+
| Provisions | 13 | (7,422) | (2,118) | (11,220) |
+----------------------------------------+------+--------------+------------+-----------+
| | | (106,927) | (103,335) | (107,361) |
+----------------------------------------+------+--------------+------------+-----------+
| | | | | |
+----------------------------------------+------+--------------+------------+-----------+
| Net assets | | 11,040 | 67,626 | 16,339 |
+----------------------------------------+------+--------------+------------+-----------+
| | | | | |
+----------------------------------------+------+--------------+------------+-----------+
| Capital and reserves | | | | |
+----------------------------------------+------+--------------+------------+-----------+
| Called up share capital | | 5,666 | 5,666 | 5,666 |
+----------------------------------------+------+--------------+------------+-----------+
| Share premium account | | 50,618 | 50,618 | 50,618 |
+----------------------------------------+------+--------------+------------+-----------+
| Capital reserve - own shares | | (1,509) | (1,509) | (1,509) |
+----------------------------------------+------+--------------+------------+-----------+
| Convertible bond reserve | | - | 60 | - |
+----------------------------------------+------+--------------+------------+-----------+
| Equity reserve | | 905 | 1,036 | 1,014 |
+----------------------------------------+------+--------------+------------+-----------+
| Retained earnings | | (44,640) | 11,755 | (39,450) |
+----------------------------------------+------+--------------+------------+-----------+
| | | | | |
+----------------------------------------+------+--------------+------------+-----------+
| Total equity | | 11,040 | 67,626 | 16,339 |
+----------------------------------------+------+--------------+------------+-----------+
consolidated cash flow statement
for the 26 weeks ended 27 December 2008
+-----------------------------------------+--------+-----------+------------+----------+
| | | Unaudited | Unaudited | Audited |
+-----------------------------------------+--------+-----------+------------+----------+
| | | 26 weeks | 26 weeks | 52 weeks |
| | | | | |
+-----------------------------------------+--------+-----------+------------+----------+
| | | ended | ended | ended |
+-----------------------------------------+--------+-----------+------------+----------+
| | | 27 | 29 | 28 June |
| | | December | December | |
+-----------------------------------------+--------+-----------+------------+----------+
| | | 2008 | 2007 | 2008 |
+-----------------------------------------+--------+-----------+------------+----------+
| | Notes | GBP'000 | GBP'000 | GBP'000 |
+-----------------------------------------+--------+-----------+------------+----------+
| | | | | |
+-----------------------------------------+--------+-----------+------------+----------+
| Cash flows from operating activities | | | | |
+-----------------------------------------+--------+-----------+------------+----------+
| Cash generated from operations | 14 | 2,421 | 6,835 | 15,346 |
+-----------------------------------------+--------+-----------+------------+----------+
| Interest received | | 89 | 21 | 51 |
+-----------------------------------------+--------+-----------+------------+----------+
| Interest paid | | (2,458) | (2,988) | (6,381) |
+-----------------------------------------+--------+-----------+------------+----------+
| Tax received | | 591 | - | - |
+-----------------------------------------+--------+-----------+------------+----------+
| | | | | |
+-----------------------------------------+--------+-----------+------------+----------+
| Net cash from operating activities | | 643 | 3,868 | 9,016 |
+-----------------------------------------+--------+-----------+------------+----------+
| | | | | |
+-----------------------------------------+--------+-----------+------------+----------+
| Cash flows from investing activities | | | | |
+-----------------------------------------+--------+-----------+------------+----------+
| Proceeds from sale of property, plant | | 1,409 | 426 | (258) |
| and equipment | | | | |
+-----------------------------------------+--------+-----------+------------+----------+
| Purchase of property, plant and | | (1,537) | (8,983) | (11,816) |
| equipment | | | | |
+-----------------------------------------+--------+-----------+------------+----------+
| | | | | |
+-----------------------------------------+--------+-----------+------------+----------+
| Net cash used in investing activities | | (128) | (8,557) | (12,074) |
+-----------------------------------------+--------+-----------+------------+----------+
| | | | | |
+-----------------------------------------+--------+-----------+------------+----------+
| Cash flows from financing activities | | | | |
+-----------------------------------------+--------+-----------+------------+----------+
| Net proceeds from issue of new bank | | 3,000 | 8,000 | 10,000 |
| loan | | | | |
+-----------------------------------------+--------+-----------+------------+----------+
| Repayment of borrowings | | (1,476) | - | (6,250) |
+-----------------------------------------+--------+-----------+------------+----------+
| Finance lease principal payments | | - | (36) | (102) |
+-----------------------------------------+--------+-----------+------------+----------+
| Purchase of own shares | | - | (1,000) | (1,000) |
+-----------------------------------------+--------+-----------+------------+----------+
| | | | | |
+-----------------------------------------+--------+-----------+------------+----------+
| Net cash generated from financing | | 1,524 | 6,964 | 2,648 |
| activities | | | | |
+-----------------------------------------+--------+-----------+------------+----------+
| | | | | |
+-----------------------------------------+--------+-----------+------------+----------+
| Net increase/ (decrease) in cash and | 15 | 2,039 | 2,275 | (410) |
| cash equivalents | | | | |
+-----------------------------------------+--------+-----------+------------+----------+
| Opening cash and cash equivalents | | 4,053 | 4,463 | 4,463 |
+-----------------------------------------+--------+-----------+------------+----------+
| Closing cash and cash equivalents | | 6,092 | 6,738 | 4,053 |
+-----------------------------------------+--------+-----------+------------+----------+
| | | | | |
+-----------------------------------------+--------+-----------+------------+----------+
Notes TO the condensed financial information
for the 26 weeks ended 27 December 2008
1. General information
The Company is a limited liability company incorporated and domiciled in the
United Kingdom. The address of its registered office is Rowley House, South
Herts Office Campus, Elstree Way, Borehamwood, Hertfordshire WD6 1JH.
The Company is listed on the London Stock Exchange.
This half-yearly financial report for the 26 weeks ended 27 December 2008 was
approved for issue on 26 February 2009.
These half-yearly financial results do not comprise statutory accounts within
the meaning of Section 434 of the Companies Act 2006. Statutory accounts for the
52 weeks ended 28 June 2008 were approved by the Board of Directors on 16
October 2008 and delivered to the Registrar of Companies. The report of the
auditors on those accounts was unqualified, but did contain an emphasis of
matter paragraph; it did not contain any statement under Section 498 of the
Companies Act 2006.
2. Basis of Preparation
This half-yearly financial report for the 26 weeks ended 27 December 2008 has
been prepared in accordance with the Disclosure and Transparency Rules of the
Financial Services Authority and with IAS 34, 'Interim financial reporting' as
adopted by the European Union. The report should be read in conjunction with the
Group's statutory consolidated financial statements for the 52 weeks ended 28
June 2008 which were prepared in accordance with International Financial
Reporting Standards (IFRS) as adopted by the European Union.
Going concern
The Group currently has committed borrowing facilities of GBP96.5m until
September 2010. Under the terms of these facilities, any proceeds from asset
sales must be used to repay debt and financial covenants are tested quarterly.
The Group has complied fully with the financial covenant tests. The Group
updates trading forecasts covering a forward 12 month period on a regular basis,
which together with the supporting assumptions is reviewed by the Board. The
Group's forecasts anticipate a slowing down in the rate of sales decline towards
the end of 2009 and very modest recovery towards the middle of 2010. The current
forecast shows that the Group is able to operate within both its committed
banking facilities and related financial covenants during this period and the
Directors believe that the assumptions underpinning this forecast are both
prudent and reasonable. However, as was noted in the consolidated financial
statements for the 52 weeks ended 28 June 2008 and continues to be the case,
given the prevailing difficult economic conditions and the level of uncertainty
regarding their duration and severity, there is an associated material
uncertainty over the Group's future performance which may impact its ability to
remain within the terms of its committed borrowing facilities. This may cast
significant doubt about the Group's ability to continue as a going concern.
Notwithstanding the above, the Board believes that it is appropriate to prepare
the condensed consolidated financial report on the going concern basis.
Taxation
The taxation charge for the period is based on the directors' best estimate of
the annual effective rate of taxation for the continuing business and then
adjusted as appropriate for the specific exceptional items falling within the
interim reporting period.
3. Accounting policies
The accounting policies adopted are consistent with those of the Group's
statutory consolidated financial statements for the 52 weeks ended 28 June 2008,
as described in those financial statements.
The following new standards, amendments to standards or interpretations are
mandatory for the first time for the financial period ending 27 June 2009. None
of them had a material impact on the reported results.
* IAS 23, 'Amendments: borrowing costs' - requires an entity to capitalise
borrowing costs directly attributable to the production of a qualifying asset',
effective for annual periods beginning on or after 1 January 2008.
IFRIC 12 'Service concession arrangements', IFRIC 14 'The limit on a defined
benefit asset, minimum funding requirements and their interaction', IFRIC 15
'Arrangements for the construction of real estate' and IFRIC 16 'Hedges of a net
investment in a foreign operation' became mandatory for accounting periods
beginning on or after 1 January 2008, but are not relevant to the Group's
operations.
The following new standards, amendments to standards and interpretations have
been issued, but are not effective for the financial period ending 27June 2009
and have not been adopted early:
* IFRS 2 'Share-based payments' - an amendment relating to vesting conditions and
cancellations, effective for annual periods beginning on or after 1 January
2009.
* IFRS 3 'Business combinations' - a comprehensive revision on applying the
acquisition method, effective for annual periods beginning on or after 1 July
2009.
* IFRS 5 'Non-current assets held for sale and discontinued operations' -
amendments in the section 'presenting discontinued operations' that would
require the parent to disclose information for discontinued operations when the
subsidiary to be disposed of meets the definition of a discontinued operation in
accordance with IFRS 5; to clarify the criteria for classification as held for
sale and to align the effective date of the amendment to IFRS 5 with that of the
January 2008 amendment to IAS 27, effective for annual periods beginning on or
after 1 July 2009.
* IFRS 8, 'Operating segments', effective for annual periods beginning on or after
1 January 2009.
* IAS 1 'Presentation of financial statements' - a comprehensive revision
including requiring a statement of comprehensive income and additional
amendments, effective for annual periods beginning on or after 1 January 2009.
* IAS 16 'Property, plant and equipment' - an amendment to clarify that IFRS 5
does not apply when assets are transferred to inventories which are held for
sale in the ordinary course of business, effective for annual periods beginning
on or after 1 January 2009.
* IAS 19 'Employee benefits' - amendments relating to curtailments and negative
past service costs, effective for annual periods beginning on or after 1 January
2009.
* IAS 20 'Government grants and disclosure of government assistance' - a proposed
amendment which requires government loans to be recognised and measured in
accordance with IAS 39 reflecting a market interest rate; a government grant
would be recognised as equal to the difference as equal to the difference
between the cash received and the recognised amount of the loan and would be
accounted for using IAS 20; with the amendment applying prospectively to loans
received after the effective date of the amendment, effective for annual periods
beginning on or after 1 January 2009.
* IAS 23 'Borrowing costs' - a revision to prohibit immediate expensing and
additional amendments, effective for annual periods beginning on or after 1
January 2009.
* IAS 27 'Consolidated and separate financial statements' - amendments effective
for annual periods beginning on or after 1 July 2009.
* IAS 28 'Investments in associates' - amendments effective for annual periods
beginning on or after 1 July 2009.
* IAS 31 'Investments in Joint Ventures - amendments effective for annual periods
beginning on or after 1 July 2009.
* IAS 32 'Financial instruments' - amendments to presentation, effective for
annual periods beginning on or after 1 January 2009.
* IAS 36 'Impairment of assets' - amendments, effective for annual periods
beginning on or after 1 January 2009.
* IAS 38 'Intangible assets' - amendments, effective for annual periods beginning
on or after 1 January 2009.
* IAS 39 'Financial instruments: recognition and measurement' - amendments,
effective for annual periods beginning on or after 1 July 2009.
* IAS 40 'Investment property' - amendments, effective for annual periods
beginning on or after 1 January 2009.
* IFRIC 17 'Distributions of non-cash assets to owners' - effective for annual
periods beginning on or after 1 July 2009.
4. Segmental information
The segment results for the 26 week periods ended 27 December 2008 and 29
December 2007 were as follows:
+------------------+---------------+-------------+-------------+----------+---------------+-------------+-------------+----------+
| | 26 |
| 26 weeks ended 27 December 2008 | weeks ended 29 December 2007 |
+--------------------------------------------------------------+------------------------------------------------------+
| | Entertainment | Restaurants | Central/ | Group | Entertainment | Restaurants | Central/ | Group |
| | Bars | | unallocated | | Bars | | unallocated | |
+------------------+---------------+-------------+-------------+----------+---------------+-------------+-------------+----------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+------------------+---------------+-------------+-------------+----------+---------------+-------------+-------------+----------+
| Revenue | 52,599 | 15,041 | - | 67,640 | 61,412 | 15,724 | - | 77,136 |
+------------------+---------------+-------------+-------------+----------+---------------+-------------+-------------+----------+
| Cost of sales | (13,016) | (4,526) | - | (17,542) | (14,459) | (4,110) | - | (18,569) |
+------------------+---------------+-------------+-------------+----------+---------------+-------------+-------------+----------+
| Gross profit | 39,583 | 10,515 | - | 50,098 | 46,953 | 11,614 | - | 58,567 |
+------------------+---------------+-------------+-------------+----------+---------------+-------------+-------------+----------+
| Operating costs | (34,911) | (10,392) | - | (45,303) | (38,618) | (11,646) | - | (50,264) |
+------------------+---------------+-------------+-------------+----------+---------------+-------------+-------------+----------+
| Venue profit | 4,672 | 123 | - | 4,795 | 8,335 | (32) | - | 8,303 |
+------------------+---------------+-------------+-------------+----------+---------------+-------------+-------------+----------+
| Administrative | - | - | (2,967) | (2,967) | - | - | (4,036) | (4,036) |
| expenses | | | | | | | | |
+------------------+---------------+-------------+-------------+----------+---------------+-------------+-------------+----------+
| Operating | 4,672 | 123 | (2,967) | 1,828 | 8,335 | (32) | (4,036) | 4,267 |
| profit/(loss) | | | | | | | | |
| before | | | | | | | | |
| exceptional | | | | | | | | |
| items, loss on | | | | | | | | |
| property, | | | | | | | | |
| plant and | | | | | | | | |
| equipment and | | | | | | | | |
| brand | | | | | | | | |
| amortisation | | | | | | | | |
+------------------+---------------+-------------+-------------+----------+---------------+-------------+-------------+----------+
Other segment items included in the income statement are as follows:
+------------------+---------------+-------------+-------------+---------+---------------+-------------+-------------+---------+
| | 26 weeks |
| 26 weeks ended 27 December 2008 | ended 29 December 2007 |
+--------------------------------------------------------------+-----------------------------------------------------+
| | Entertainment | Restaurants | Central/ | Group | Entertainment | Restaurants | Central/ | Group |
| | Bars | | unallocated | | Bars | | unallocated | |
+------------------+---------------+-------------+-------------+---------+---------------+-------------+-------------+---------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+------------------+---------------+-------------+-------------+---------+---------------+-------------+-------------+---------+
| Depreciation* | 3,644 | 555 | 297 | 4,496 | 4,389 | 755 | 371 | 5,515 |
+------------------+---------------+-------------+-------------+---------+---------------+-------------+-------------+---------+
| Amortisation of | - | - | - | - | - | 8 | - | 8 |
| franchise fees* | | | | | | | | |
+------------------+---------------+-------------+-------------+---------+---------------+-------------+-------------+---------+
| Amortisation of | - | 85 | - | 85 | - | 150 | - | 150 |
| brands | | | | | | | | |
+------------------+---------------+-------------+-------------+---------+---------------+-------------+-------------+---------+
| Loss on sale of | 68 | - | - | 68 | 146 | - | - | 146 |
| property, plant | | | | | | | | |
| and equipment | | | | | | | | |
+------------------+---------------+-------------+-------------+---------+---------------+-------------+-------------+---------+
| Exceptional | | | | | | | | |
| items | | | | | | | | |
+------------------+---------------+-------------+-------------+---------+---------------+-------------+-------------+---------+
| - Bank facility | - | - | 302 | 302 | - | - | - | - |
| amendment | | | | | | | | |
+------------------+---------------+-------------+-------------+---------+---------------+-------------+-------------+---------+
*Charged to operating costs
The segment results for the 52 week period ended 28 June 2008 were as follows:
+-----------------------------------------------------+---------------+-------------+-------------+-----------+
| |
| 52 weeks ended 28 June 2008 |
+-------------------------------------------------------------------------------------------------+
| | Entertainment | Restaurants | Central/ | Group |
| | Bars | | unallocated | |
+-----------------------------------------------------+---------------+-------------+-------------+-----------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+-----------------------------------------------------+---------------+-------------+-------------+-----------+
| Revenue | 116,942 | 31,118 | - | 148,060 |
+-----------------------------------------------------+---------------+-------------+-------------+-----------+
| Cost of sales | (25,584) | (8,526) | - | (34,110) |
+-----------------------------------------------------+---------------+-------------+-------------+-----------+
| Gross profit | 91,358 | 22,592 | - | 113,950 |
+-----------------------------------------------------+---------------+-------------+-------------+-----------+
| Operating costs | (77,968) | (22,872) | - | (100,840) |
+-----------------------------------------------------+---------------+-------------+-------------+-----------+
| Venue profit | 13,390 | (280) | - | 13,110 |
+-----------------------------------------------------+---------------+-------------+-------------+-----------+
| Administrative expenses | - | - | (6,999) | (6,999) |
+-----------------------------------------------------+---------------+-------------+-------------+-----------+
| Operating profit/ (loss) before | 13,390 | (280) | (6,999) | 6,111 |
| exceptional items, loss on property, plant and | | | | |
| equipment and brand amortisation | | | | |
+-----------------------------------------------------+---------------+-------------+-------------+-----------+
Other segment items included in the income statement are as follows:
+-----------------------------------------------------+---------------+-------------+-------------+---------+
| |
| 52 weeks ended 28 June 2008 |
+-------------------------------------------------------------------------------------------------+
| | Entertainment | Restaurants | Central/ | Group |
| | Bars | | unallocated | |
+-----------------------------------------------------+---------------+-------------+-------------+---------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+-----------------------------------------------------+---------------+-------------+-------------+---------+
| Depreciation* | 9,758 | 1,478 | - | 11,236 |
+-----------------------------------------------------+---------------+-------------+-------------+---------+
| Amortisation of brands | - | 300 | - | 300 |
+-----------------------------------------------------+---------------+-------------+-------------+---------+
| Loss on sale of property, plant and equipment | 775 | - | - | 775 |
+-----------------------------------------------------+---------------+-------------+-------------+---------+
| Exceptional items | | | | |
+-----------------------------------------------------+---------------+-------------+-------------+---------+
| - Property, plant and equipment impairment | 25,505 | 3,117 | - | 28,622 |
+-----------------------------------------------------+---------------+-------------+-------------+---------+
| - Goodwill impairment | 4,746 | 8,331 | - | 13,077 |
+-----------------------------------------------------+---------------+-------------+-------------+---------+
| - Brand impairment | - | 2,596 | - | 2,596 |
+-----------------------------------------------------+---------------+-------------+-------------+---------+
| - Franchise impairment | - | 175 | - | 175 |
+-----------------------------------------------------+---------------+-------------+-------------+---------+
| - Provision for onerous leases | 7,493 | 2,059 | - | 9,552 |
+-----------------------------------------------------+---------------+-------------+-------------+---------+
| - Bank facility amendment | - | - | 1,497 | 1,497 |
+-----------------------------------------------------+---------------+-------------+-------------+---------+
| - Aborted sale and leaseback fees | - | - | 296 | 296 |
+-----------------------------------------------------+---------------+-------------+-------------+---------+
| - Aborted sale of Group fees | - | - | 388 | 388 |
+-----------------------------------------------------+---------------+-------------+-------------+---------+
| - Head office reorganisation | - | - | 850 | 850 |
+-----------------------------------------------------+---------------+-------------+-------------+---------+
*Charged to operating costs
The segment assets and liabilities at 27 December 2008 and 29 December 2007 and
capital expenditure for the 26 weeks then ended are as follows:
+----------------------+---------------+-------------+-------------+---------+---------------+-------------+-------------+-----------+
| | 26 weeks ended 27 December 2008 | 26 weeks ended 29 December 2007 |
+----------------------+-----------------------------------------------------+-------------------------------------------------------+
| | Entertainment | | Central/ | | Entertainment | | Central/ | |
| | Bars | Restaurants | unallocated | Group | Bars | Restaurants | unallocated | Group |
+----------------------+---------------+-------------+-------------+---------+---------------+-------------+-------------+-----------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+----------------------+---------------+-------------+-------------+---------+---------------+-------------+-------------+-----------+
| Assets | 115,953 | 23,397 | 10,341 | 149,691 | 154,758 | 36,341 | 12,667 | 203,766 |
+----------------------+---------------+-------------+-------------+---------+---------------+-------------+-------------+-----------+
| Liabilities | 20,575 | 7,277 | 110,799 | 138,651 | 12,813 | 5,373 | 117,954 | 136,140 |
+----------------------+---------------+-------------+-------------+---------+---------------+-------------+-------------+-----------+
| Capital expenditure | 1,018 | 242 | 478 | 1,738 | 3,587 | 4,601 | 406 | 8,594 |
+----------------------+---------------+-------------+-------------+---------+---------------+-------------+-------------+-----------+
The segment assets and liabilities at 28 June 2008 and capital expenditure for
the 52 weeks then ended are as follows:
+-----------------------------------------------------+---------------+-------------+-------------+---------+
| |
| 52 weeks ended 28 June 2008 |
+-------------------------------------------------------------------------------------------------+
| | Entertainment | Restaurants | Central/ | Group |
| | Bars | | unallocated | |
+-----------------------------------------------------+---------------+-------------+-------------+---------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+-----------------------------------------------------+---------------+-------------+-------------+---------+
| Assets | 119,724 | 24,257 | 8,172 | 152,153 |
+-----------------------------------------------------+---------------+-------------+-------------+---------+
| Liabilities | 19,623 | 6,760 | 109,431 | 135,814 |
+-----------------------------------------------------+---------------+-------------+-------------+---------+
| Capital expenditure | 5,338 | 5,188 | 686 | 11,212 |
+-----------------------------------------------------+---------------+-------------+-------------+---------+
Segment assets consist primarily of property, plant and equipment, intangible
assets, inventories, and trade and other receivables. Unallocated assets
comprise cash and cash equivalents and assets held-for-resale.
Segment liabilities comprise operating liabilities. Unallocated liabilities
comprise items such as borrowings including interest rate swaps, current tax
liabilities, deferred tax liabilities and provisions.
Capital expenditure comprises additions to property, plant and equipment.
The segment assets and liabilities are reconciled to entity assets and
liabilities as follows:
+-----------------------------------------------------------------------+-------------+-------------+-----------+-------------+
| | 26 weeks ended | 26 weeks ended |
| | 27 December 2008 | 29 December 2007 |
+-----------------------------------------------------------------------+---------------------------+-------------------------+
| | Assets | Liabilities | Assets | Liabilities |
+-----------------------------------------------------------------------+-------------+-------------+-----------+-------------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+-----------------------------------------------------------------------+-------------+-------------+-----------+-------------+
| Segment assets/liabilities | 139,350 | 27,852 | 191,099 | 18,186 |
+-----------------------------------------------------------------------+-------------+-------------+-----------+-------------+
| Central/unallocated: | | | | |
+-----------------------------------------------------------------------+-------------+-------------+-----------+-------------+
| Property, plant and equipment | 2,433 | - | 2,852 | - |
+-----------------------------------------------------------------------+-------------+-------------+-----------+-------------+
| Trade and other receivables | 2,295 | - | 3,103 | - |
+-----------------------------------------------------------------------+-------------+-------------+-----------+-------------+
| Cash and cash equivalents | 5,613 | - | 6,712 | - |
+-----------------------------------------------------------------------+-------------+-------------+-----------+-------------+
| Current borrowings | - | 2,808 | - | 8,665 |
+-----------------------------------------------------------------------+-------------+-------------+-----------+-------------+
| Non-current borrowings | - | 81,524 | - | 77,808 |
+-----------------------------------------------------------------------+-------------+-------------+-----------+-------------+
| Trade and other liabilities | - | 13,587 | - | 12,216 |
+-----------------------------------------------------------------------+-------------+-------------+-----------+-------------+
| Current tax liabilities | - | 1,161 | - | 784 |
+-----------------------------------------------------------------------+-------------+-------------+-----------+-------------+
| Deferred tax liabilities | - | 11,719 | - | 18,481 |
+-----------------------------------------------------------------------+-------------+-------------+-----------+-------------+
| | 149,691 | 138,651 | 203,766 | 136,140 |
+-----------------------------------------------------------------------+-------------+-------------+-----------+-------------+
+----------------------------------------------------------------------------------------------+-----------+-------------+
| | |
+----------------------------------------------------------------------------------------------+-------------------------+
| | 52 weeks ended |
| | 28 June 2008 |
+----------------------------------------------------------------------------------------------+-------------------------+
| | Assets | Liabilities |
+----------------------------------------------------------------------------------------------+-----------+-------------+
| | GBP'000 | GBP'000 |
+----------------------------------------------------------------------------------------------+-----------+-------------+
| Segment assets/liabilities | 143,981 | 26,383 |
+----------------------------------------------------------------------------------------------+-----------+-------------+
| Central/unallocated: | | |
+----------------------------------------------------------------------------------------------+-----------+-------------+
| Property, plant and equipment | 1,958 | - |
+----------------------------------------------------------------------------------------------+-----------+-------------+
| Trade and other receivables | 2,781 | - |
+----------------------------------------------------------------------------------------------+-----------+-------------+
| Cash and cash equivalents | 3,433 | - |
+----------------------------------------------------------------------------------------------+-----------+-------------+
| Current borrowings | - | 2,725 |
+----------------------------------------------------------------------------------------------+-----------+-------------+
| Non-current borrowings | - | 79,945 |
+----------------------------------------------------------------------------------------------+-----------+-------------+
| Trade and other liabilities | - | 14,666 |
+----------------------------------------------------------------------------------------------+-----------+-------------+
| Current tax liabilities | - | 570 |
+----------------------------------------------------------------------------------------------+-----------+-------------+
| Deferred tax liabilities | - | 11,525 |
+----------------------------------------------------------------------------------------------+-----------+-------------+
| | 152,153 | 135,814 |
+----------------------------------------------------------------------------------------------+-----------+-------------+
5. Exceptional items
+----------------------------------------------------------+-----------+-----------+----------+
| | Unaudited | Unaudited | Audited |
+----------------------------------------------------------+-----------+-----------+----------+
| | 26 weeks | 26 weeks | 52 |
| | | | weeks |
+----------------------------------------------------------+-----------+-----------+----------+
| | ended | ended | ended |
+----------------------------------------------------------+-----------+-----------+----------+
| | 27 | 29 | 28 |
| | December | December | June |
+----------------------------------------------------------+-----------+-----------+----------+
| | 2008 | 2007 | 2008 |
+----------------------------------------------------------+-----------+-----------+----------+
| | GBP'000 | GBP'000 | GBP'000 |
+----------------------------------------------------------+-----------+-----------+----------+
| Impairment provisions | | | |
+----------------------------------------------------------+-----------+-----------+----------+
| Property, plant and equipment | - | - | (28,622) |
+----------------------------------------------------------+-----------+-----------+----------+
| Goodwill | - | - | (13,077) |
+----------------------------------------------------------+-----------+-----------+----------+
| Brands and franchises | - | - | (2,763) |
+----------------------------------------------------------+-----------+-----------+----------+
| | - | - | (44,462) |
+----------------------------------------------------------+-----------+-----------+----------+
| Provision for onerous leases | - | - | (9,552) |
+----------------------------------------------------------+-----------+-----------+----------+
| | | | |
+----------------------------------------------------------+-----------+-----------+----------+
| Bank facility amendment | (302) | - | (1,497) |
+----------------------------------------------------------+-----------+-----------+----------+
| Aborted sale and leaseback fees | - | - | (296) |
+----------------------------------------------------------+-----------+-----------+----------+
| Aborted sale of Group fees | - | - | (388) |
+----------------------------------------------------------+-----------+-----------+----------+
| Head office reorganisation costs | - | | (850) |
+----------------------------------------------------------+-----------+-----------+----------+
| Other exceptional items | (302) | - | (3,031) |
+----------------------------------------------------------+-----------+-----------+----------+
| Total exceptional items | (302) | - | (57,045) |
+----------------------------------------------------------+-----------+-----------+----------+
| | | | |
+----------------------------------------------------------+-----------+-----------+----------+
| Loss on sale of property, plant and equipment | (68) | (146) | (775) |
+----------------------------------------------------------+-----------+-----------+----------+
| Brand amortisation | (85) | (150) | (300) |
+----------------------------------------------------------+-----------+-----------+----------+
| Total exceptionals | (455) | (296) | (58,120) |
+----------------------------------------------------------+-----------+-----------+----------+
6. Finance costs and finance income
+----------------------------------------------------------+-----------+-----------+---------+
| | Unaudited | Unaudited | Audited |
+----------------------------------------------------------+-----------+-----------+---------+
| | 26 weeks | 26 weeks | 52 |
| | | | weeks |
+----------------------------------------------------------+-----------+-----------+---------+
| | ended | ended | ended |
+----------------------------------------------------------+-----------+-----------+---------+
| | 27 | 29 | 28 |
| | December | December | June |
+----------------------------------------------------------+-----------+-----------+---------+
| | 2008 | 2007 | 2008 |
+----------------------------------------------------------+-----------+-----------+---------+
| | GBP'000 | GBP'000 | GBP'000 |
+----------------------------------------------------------+-----------+-----------+---------+
| Finance costs | | | |
+----------------------------------------------------------+-----------+-----------+---------+
| Bank loans and overdraft | (3,650) | (2,637) | (5,542) |
+----------------------------------------------------------+-----------+-----------+---------+
| Amortisation of set-up costs of bank loan | (138) | (138) | (275) |
+----------------------------------------------------------+-----------+-----------+---------+
| Convertible loan notes | - | (227) | (233) |
+----------------------------------------------------------+-----------+-----------+---------+
| Other finance costs | (35) | (65) | (101) |
+----------------------------------------------------------+-----------+-----------+---------+
| | (3,823) | (3,067) | (6,151) |
+----------------------------------------------------------+-----------+-----------+---------+
| Finance income | | | |
+----------------------------------------------------------+-----------+-----------+---------+
| Short term bank deposits | 89 | 21 | 51 |
+----------------------------------------------------------+-----------+-----------+---------+
| Fair value gains/(losses) on financial instruments - | - | 41 | 41 |
| interest rate swaps | | | |
+----------------------------------------------------------+-----------+-----------+---------+
| | 89 | 62 | 92 |
+----------------------------------------------------------+-----------+-----------+---------+
7. Taxation
The (charge)/ credit is based on the (loss)/ profit for the period.
+----------------------------------------------------------+-----------+-----------+---------+
| | Unaudited | Unaudited | Audited |
+----------------------------------------------------------+-----------+-----------+---------+
| | 26 weeks | 26 weeks | 52 |
| | | | weeks |
+----------------------------------------------------------+-----------+-----------+---------+
| | ended | ended | ended |
+----------------------------------------------------------+-----------+-----------+---------+
| | 27 | 29 | 28 |
| | December | December | June |
+----------------------------------------------------------+-----------+-----------+---------+
| | 2008 | 2007 | 2008 |
+----------------------------------------------------------+-----------+-----------+---------+
| | Total | Total | Total |
+----------------------------------------------------------+-----------+-----------+---------+
| | GBP'000 | GBP'000 | GBP'000 |
+----------------------------------------------------------+-----------+-----------+---------+
| | | | |
+----------------------------------------------------------+-----------+-----------+---------+
| Current tax | | | |
+----------------------------------------------------------+-----------+-----------+---------+
| - Current year | - | - | - |
+----------------------------------------------------------+-----------+-----------+---------+
| - Adjustment in respect of prior years | - | 90 | 304 |
+----------------------------------------------------------+-----------+-----------+---------+
| Total current tax | - | 90 | 304 |
+----------------------------------------------------------+-----------+-----------+---------+
| Deferred tax | | | |
+----------------------------------------------------------+-----------+-----------+---------+
| - Current year | (931) | (521) | 5,948 |
+----------------------------------------------------------+-----------+-----------+---------+
| - Adjustment in respect of changes in tax rate | - | - | (314) |
+----------------------------------------------------------+-----------+-----------+---------+
| - Adjustment in respect of prior years | - | 64 | 1,060 |
+----------------------------------------------------------+-----------+-----------+---------+
| Total deferred tax | (931) | (457) | 6,694 |
+----------------------------------------------------------+-----------+-----------+---------+
| | | | |
+----------------------------------------------------------+-----------+-----------+---------+
| Taxation | (931) | (367) | 6,998 |
+----------------------------------------------------------+-----------+-----------+---------+
8. Dividends
The directors do not propose an interim dividend (2007 - nil pence per share).
9. Earnings per share
Earnings per share has been calculated using the weighted average number of
shares in issue during the relevant financial periods excluding those held in
the Employee Share Ownership Trust which have been treated as cancelled. The
weighted average number of shares in issue was 111,233,799 (2007: 111,233,799)
and the earnings, being loss on ordinary activities after taxation, were
GBP3,292,000 (2007: profit GBP599,000).
Diluted earnings per share adjusts for those share options granted to employees
and the holders of convertible loan stock where the exercise price is less than
the average price of the Company's shares during the period. The diluted
weighted average number of shares was 113,553,636
(2007: 113,685,384).
The table below shows the basis of calculation of basic earnings per share and
diluted earnings per share, and also sets out the steps to exclude exceptionals
from the calculations in order to derive adjusted earnings per share. In the
opinion of the directors, adjusted earnings per share, being earnings per share
before exceptional items, brand amortisation and loss on sale of property, plant
and equipment is a more representative indicator of the Company's underlying
trading performance.
+---------------------------+-----------+-----------+----------+-----------+-----------+---------+
| | Earnings | Earnings per share |
+---------------------------+----------------------------------+---------------------------------+
| | Unaudited | Unaudited | Audited | Unaudited | Unaudited | Audited |
+---------------------------+-----------+-----------+----------+-----------+-----------+---------+
| | 26 weeks | 26 weeks | 52 | 26 weeks | 26 weeks | 52 |
| | | | weeks | | | weeks |
+---------------------------+-----------+-----------+----------+-----------+-----------+---------+
| | ended | ended | ended | ended | ended | ended |
+---------------------------+-----------+-----------+----------+-----------+-----------+---------+
| | 27 | 29 | 28 | 27 | 29 | 28 |
| | December | December | June | December | December | June |
+---------------------------+-----------+-----------+----------+-----------+-----------+---------+
| | 2008 | 2007 | 2008 | 2008 | 2007 | 2008 |
+---------------------------+-----------+-----------+----------+-----------+-----------+---------+
| | GBP'000 | GBP'000 | GBP'000 | pence | pence | pence |
+---------------------------+-----------+-----------+----------+-----------+-----------+---------+
| Total EPS | | | | | | |
+---------------------------+-----------+-----------+----------+-----------+-----------+---------+
| Basic | (3,292) | 599 | (51,070) | (3.0) | 0.5 | (45.9) |
+---------------------------+-----------+-----------+----------+-----------+-----------+---------+
| Dilution impact of | - | - | - | - | - | - |
| options | | | | | | |
+---------------------------+-----------+-----------+----------+-----------+-----------+---------+
| Diluted | (3,292) | 599 | (51,070) | (3.0) | 0.5 | (45.9) |
+---------------------------+-----------+-----------+----------+-----------+-----------+---------+
| Exclude exceptional | 455 | 296 | 47,925 | 0.5 | 0.3 | 43.1 |
| items, brand amortisation | | | | | | |
| and loss on sale of | | | | | | |
| property, plant and | | | | | | |
| equipment, net of | | | | | | |
| taxation | | | | | | |
+---------------------------+-----------+-----------+----------+-----------+-----------+---------+
| Adjusted EPS | | | | | | |
+---------------------------+-----------+-----------+----------+-----------+-----------+---------+
| Basic | (2,837) | 895 | (3,145) | (2.5) | 0.8 | (2.8) |
+---------------------------+-----------+-----------+----------+-----------+-----------+---------+
| Diluted | (2,837) | 895 | (3,145) | (2.5) | 0.8 | (2.8) |
+---------------------------+-----------+-----------+----------+-----------+-----------+---------+
10. Intangible assets
+---------------------------------------------------------+-----------+-----------+----------+
| | Unaudited | Unaudited | Audited |
+---------------------------------------------------------+-----------+-----------+----------+
| | 26 weeks | 26 weeks | 52 weeks |
+---------------------------------------------------------+-----------+-----------+----------+
| | ended | ended | ended |
+---------------------------------------------------------+-----------+-----------+----------+
| | 27 | 29 | 28 June |
| | December | December | |
+---------------------------------------------------------+-----------+-----------+----------+
| | 2008 | 2007 | 2008 |
+---------------------------------------------------------+-----------+-----------+----------+
| | GBP'000 | GBP'000 | GBP'000 |
+---------------------------------------------------------+-----------+-----------+----------+
| | | | |
+---------------------------------------------------------+-----------+-----------+----------+
| Opening book amount | 8,503 | 24,643 | 24,643 |
+---------------------------------------------------------+-----------+-----------+----------+
| Impairment charge | - | - | (15,840) |
+---------------------------------------------------------+-----------+-----------+----------+
| Brand amortisation | (85) | (150) | (300) |
+---------------------------------------------------------+-----------+-----------+----------+
| Franchise amortisation | - | (8) | - |
+---------------------------------------------------------+-----------+-----------+----------+
| Closing book amount | 8,418 | 24,485 | 8,503 |
+---------------------------------------------------------+-----------+-----------+----------+
11. Property, plant and equipment
+---------------------------------------------------------+-----------+-----------+----------+
| | Unaudited | Unaudited | Audited |
+---------------------------------------------------------+-----------+-----------+----------+
| | 26 weeks | 26 weeks | 52 weeks |
+---------------------------------------------------------+-----------+-----------+----------+
| | ended | ended | ended |
+---------------------------------------------------------+-----------+-----------+----------+
| | 27 | 29 | 28 June |
| | December | December | |
+---------------------------------------------------------+-----------+-----------+----------+
| | 2008 | 2007 | 2008 |
+---------------------------------------------------------+-----------+-----------+----------+
| | GBP'000 | GBP'000 | GBP'000 |
+---------------------------------------------------------+-----------+-----------+----------+
| | | | |
+---------------------------------------------------------+-----------+-----------+----------+
| Opening book amount | 124,702 | 154,823 | 154,823 |
+---------------------------------------------------------+-----------+-----------+----------+
| Additions | 1,738 | 8,594 | 11,212 |
+---------------------------------------------------------+-----------+-----------+----------+
| Depreciation | (4,496) | (5,515) | (11,236) |
+---------------------------------------------------------+-----------+-----------+----------+
| Impairment charge | - | - | (28,622) |
+---------------------------------------------------------+-----------+-----------+----------+
| Transfers to assets held-for-sale | - | - | (1,475) |
+---------------------------------------------------------+-----------+-----------+----------+
| Disposals | - | (37) | - |
+---------------------------------------------------------+-----------+-----------+----------+
| Closing book amount | 121,944 | 157,865 | 124,702 |
+---------------------------------------------------------+-----------+-----------+----------+
12. Borrowings
+---------------------------------------------------------+-----------+-----------+----------+
| | Unaudited | Unaudited | Audited |
+---------------------------------------------------------+-----------+-----------+----------+
| | 26 weeks | 26 weeks | 52 weeks |
+---------------------------------------------------------+-----------+-----------+----------+
| | ended | ended | ended |
+---------------------------------------------------------+-----------+-----------+----------+
| | 27 | 29 | 28 June |
| | December | December | |
+---------------------------------------------------------+-----------+-----------+----------+
| | 2008 | 2007 | 2008 |
+---------------------------------------------------------+-----------+-----------+----------+
| | GBP'000 | GBP'000 | GBP'000 |
+---------------------------------------------------------+-----------+-----------+----------+
| | | | |
+---------------------------------------------------------+-----------+-----------+----------+
| Non-current | 81,524 | 77,996 | 79,945 |
+---------------------------------------------------------+-----------+-----------+----------+
| Current | 2,808 | 2,787 | 2,725 |
+---------------------------------------------------------+-----------+-----------+----------+
| | 84,332 | 80,783 | 82,670 |
+---------------------------------------------------------+-----------+-----------+----------+
| | | | |
+---------------------------------------------------------+-----------+-----------+----------+
| Opening amount | 82,670 | 72,645 | 72,645 |
+---------------------------------------------------------+-----------+-----------+----------+
| New bank loans | 3,000 | 8,000 | 10,000 |
+---------------------------------------------------------+-----------+-----------+----------+
| Repayment of bank loans | (1,476) | - | (250) |
+---------------------------------------------------------+-----------+-----------+----------+
| Other non cash changes - amortisation of arrangement | 138 | 138 | 275 |
| fees | | | |
+---------------------------------------------------------+-----------+-----------+----------+
| Closing amount | 84,332 | 80,783 | 82,670 |
+---------------------------------------------------------+-----------+-----------+----------+
13. Provisions
+---------------------------------------------------------+-----------+-----------+----------+
| | Unaudited | Unaudited | Audited |
+---------------------------------------------------------+-----------+-----------+----------+
| | 26 weeks | 26 weeks | 52 weeks |
+---------------------------------------------------------+-----------+-----------+----------+
| | ended | ended | ended |
+---------------------------------------------------------+-----------+-----------+----------+
| | 27 | 29 | 28 June |
| | December | December | |
+---------------------------------------------------------+-----------+-----------+----------+
| | 2008 | 2007 | 2008 |
+---------------------------------------------------------+-----------+-----------+----------+
| | GBP'000 | GBP'000 | GBP'000 |
+---------------------------------------------------------+-----------+-----------+----------+
| | | | |
+---------------------------------------------------------+-----------+-----------+----------+
| Non-current | 7,422 | 2,118 | 11,220 |
+---------------------------------------------------------+-----------+-----------+----------+
| Current | 3,800 | 1,910 | 1,395 |
+---------------------------------------------------------+-----------+-----------+----------+
| | 11,222 | 4,028 | 12,615 |
+---------------------------------------------------------+-----------+-----------+----------+
| | | | |
+---------------------------------------------------------+-----------+-----------+----------+
| Opening amount | 12,615 | 4,625 | 4,625 |
+---------------------------------------------------------+-----------+-----------+----------+
| New provisions charged to the income statement | - | - | 9,552 |
+---------------------------------------------------------+-----------+-----------+----------+
| Provisions released to the income statement | - | - | - |
+---------------------------------------------------------+-----------+-----------+----------+
| Utilised | (1,393) | (597) | (1,562) |
+---------------------------------------------------------+-----------+-----------+----------+
| Closing amount | 11,222 | 4,028 | 12,615 |
+---------------------------------------------------------+-----------+-----------+----------+
| | | | |
+---------------------------------------------------------+-----------+-----------+----------+
14. Cash generated from operations
+---------------------------------------------------------+-----------+-----------+----------+
| | Unaudited | Unaudited | Audited |
+---------------------------------------------------------+-----------+-----------+----------+
| | 26 weeks | 26 weeks | 52 weeks |
+---------------------------------------------------------+-----------+-----------+----------+
| | ended | ended | ended |
+---------------------------------------------------------+-----------+-----------+----------+
| | 27 | 29 | 28 June |
| | December | December | |
+---------------------------------------------------------+-----------+-----------+----------+
| | 2008 | 2007 | 2008 |
+---------------------------------------------------------+-----------+-----------+----------+
| | GBP'000 | GBP'000 | GBP'000 |
+---------------------------------------------------------+-----------+-----------+----------+
| Net (loss)/ profit | (3,292) | 599 | (51,070) |
+---------------------------------------------------------+-----------+-----------+----------+
| Adjustment for: | | | |
+---------------------------------------------------------+-----------+-----------+----------+
| Taxation | 931 | 367 | (6,998) |
+---------------------------------------------------------+-----------+-----------+----------+
| Depreciation | 4,496 | 5,515 | 11,236 |
+---------------------------------------------------------+-----------+-----------+----------+
| Brand and franchise amortisation | 85 | 158 | 300 |
+---------------------------------------------------------+-----------+-----------+----------+
| Impairment provision | - | - | 44,462 |
+---------------------------------------------------------+-----------+-----------+----------+
| Loss on disposal of property, plant and equipment | 68 | 146 | 775 |
+---------------------------------------------------------+-----------+-----------+----------+
| Exceptional items | 302 | - | 3,031 |
+---------------------------------------------------------+-----------+-----------+----------+
| Onerous lease provisions | - | - | 9,552 |
+---------------------------------------------------------+-----------+-----------+----------+
| Finance income | (89) | (21) | (51) |
+---------------------------------------------------------+-----------+-----------+----------+
| Gains arising on interest rate swaps | - | (41) | (41) |
+---------------------------------------------------------+-----------+-----------+----------+
| Finance costs | 3,823 | 3,067 | 6,151 |
+---------------------------------------------------------+-----------+-----------+----------+
| Share-based payments | (109) | 134 | 112 |
+---------------------------------------------------------+-----------+-----------+----------+
| Lease premiums | 71 | 71 | 143 |
+---------------------------------------------------------+-----------+-----------+----------+
| | 6,286 | 9,995 | 17,602 |
+---------------------------------------------------------+-----------+-----------+----------+
| Changes in working capital | | | |
+---------------------------------------------------------+-----------+-----------+----------+
| Increase in inventories | (26) | (606) | (211) |
+---------------------------------------------------------+-----------+-----------+----------+
| (Increase)/ decrease in trade and other receivables | (781) | (1,116) | 931 |
+---------------------------------------------------------+-----------+-----------+----------+
| Increase/ (decrease) in trade and other payables | 118 | (442) | (360) |
+---------------------------------------------------------+-----------+-----------+----------+
| Cash generated from continuing operations before | 5,597 | 7,831 | 17,962 |
| exceptionals | | | |
+---------------------------------------------------------+-----------+-----------+----------+
| | | | |
+---------------------------------------------------------+-----------+-----------+----------+
| Cashflows resulting from exceptionals | (3,176) | (996) | (2,616) |
+---------------------------------------------------------+-----------+-----------+----------+
| | | | |
+---------------------------------------------------------+-----------+-----------+----------+
| Cash generated from operations | 2,421 | 6,835 | 15,346 |
+---------------------------------------------------------+-----------+-----------+----------+
15. Reconciliation of net cash flow to movement in net debt
+---------------------------------------------------------+-----------+-----------+----------+
| | Unaudited | Unaudited | Audited |
+---------------------------------------------------------+-----------+-----------+----------+
| | 26 weeks | 26 weeks | 52 weeks |
+---------------------------------------------------------+-----------+-----------+----------+
| | ended | ended | ended |
+---------------------------------------------------------+-----------+-----------+----------+
| | 27 | 29 | 28 June |
| | December | December | |
+---------------------------------------------------------+-----------+-----------+----------+
| | 2008 | 2007 | 2008 |
+---------------------------------------------------------+-----------+-----------+----------+
| | GBP'000 | GBP'000 | GBP'000 |
+---------------------------------------------------------+-----------+-----------+----------+
| | | | |
+---------------------------------------------------------+-----------+-----------+----------+
| Increase in cash in the period | 2,039 | 2,275 | (410) |
+---------------------------------------------------------+-----------+-----------+----------+
| Cash inflow from increase in loans | (1,524) | (8,000) | (3,750) |
+---------------------------------------------------------+-----------+-----------+----------+
| | | | |
+---------------------------------------------------------+-----------+-----------+----------+
| Decrease/ (increase) in net debt resulting from | 515 | (5,725) | (4,160) |
| cashflows | | | |
+---------------------------------------------------------+-----------+-----------+----------+
| Repayment of finance leases during the period | - | 36 | 102 |
+---------------------------------------------------------+-----------+-----------+----------+
| Other non cash changes | (138) | (138) | (275) |
+---------------------------------------------------------+-----------+-----------+----------+
| Net debt at beginning of period | (78,617) | (74,284) | (74,284) |
+---------------------------------------------------------+-----------+-----------+----------+
| | | | |
+---------------------------------------------------------+-----------+-----------+----------+
| Net debt at end of period | (78,240) | (80,111) | (78,617) |
+---------------------------------------------------------+-----------+-----------+----------+
| Unamortised bank loan facility arrangement fees | (192) | (467) | (330) |
+---------------------------------------------------------+-----------+-----------+----------+
| | (78,432) | (80,578) | (78,947) |
+---------------------------------------------------------+-----------+-----------+----------+
16. Related party transactions
Key management personnel, other than executive and non-executive directors,
comprises heads of department and operational area managers. Their aggregate
remuneration amounted to:
+---------------------------------------------------------+-----------+-----------+----------+
| | Unaudited | Unaudited | Audited |
+---------------------------------------------------------+-----------+-----------+----------+
| | 26 weeks | 26 weeks | 52 weeks |
+---------------------------------------------------------+-----------+-----------+----------+
| | ended | ended | ended |
+---------------------------------------------------------+-----------+-----------+----------+
| | 27 | 29 | 28 June |
| | December | December | |
+---------------------------------------------------------+-----------+-----------+----------+
| | 2008 | 2007 | 2008 |
+---------------------------------------------------------+-----------+-----------+----------+
| | GBP'000 | GBP'000 | GBP'000 |
+---------------------------------------------------------+-----------+-----------+----------+
| | | | |
+---------------------------------------------------------+-----------+-----------+----------+
| Salaries and other short-term benefits | 382 | 663 | 1,284 |
+---------------------------------------------------------+-----------+-----------+----------+
| Pensions | 17 | 34 | 65 |
+---------------------------------------------------------+-----------+-----------+----------+
| Share-based payments | (15) | 28 | 22 |
+---------------------------------------------------------+-----------+-----------+----------+
| | | | |
+---------------------------------------------------------+-----------+-----------+----------+
| | | | |
+---------------------------------------------------------+-----------+-----------+----------+
| | 384 | 725 | 1,371 |
+---------------------------------------------------------+-----------+-----------+----------+
17. Half-yearly financial report
A letter has been sent to shareholders explaining that, in accordance with the
European Union transparency directive, the half-yearly financial report is not
being mailed to shareholders and that it can be downloaded from the Company's
website www.regentinns.co.uk. Alternatively, shareholders may contact the
Company to request a hard copy of this report.
18. Statement of directors' responsibilities
The Directors of Regent Inns plc, together with their functions, are as follows:
+---------------+--------------------------------------+
| Jim Glover | Non - Executive Chairman |
+---------------+--------------------------------------+
| John Leslie | Chief Executive Officer |
+---------------+--------------------------------------+
| Simon Kaye | Chief Operating Officer |
+---------------+--------------------------------------+
| Mike Foster | Chief Financial Officer |
+---------------+--------------------------------------+
| John Laurie | Non - Executive Director |
+---------------+--------------------------------------+
| Tanith Dodge | Non - Executive Director |
+---------------+--------------------------------------+
Each of the Directors of Regent Inns plc confirms that, to the best of their
knowledge, this condensed set of financial statements has been prepared in
accordance with IAS 34 as adopted by the European Union, and that the
half-yearly financial report includes a fair review of the information required
by DTR 4.2.7 and DTR 4.2.8 of the Disclosure and Transparency Rules (DTRs) of
the Financial Services Authority.
By order of the Board
Claire Yarlett
26 February 2009
Secretary
Independent review report to Regent Inns plc
Introduction
We have been engaged by the company to review the condensed set of financial
statements in the half-yearly financial report for the 26 weeks ended 27
December 2008, which comprises the consolidated income statement, the
consolidated balance sheet, statement of changes in equity, the consolidated
cash flow statement and the related notes. We have read the other information
contained in the half-yearly financial report and considered whether it contains
any apparent misstatements or material inconsistencies with the information in
the condensed set of financial statements.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and has been approved
by, the directors. The directors are responsible for preparing the half-yearly
financial report in accordance with the Disclosure and Transparency Rules of the
United Kingdom's Financial Services Authority.
As disclosed in note 2, the annual financial statements of the group are
prepared in accordance with IFRSs as adopted by the European Union. The
condensed set of financial statements included in this half-yearly financial
report has been prepared in accordance with International Accounting Standard
34, "Interim Financial Reporting", as adopted by the European Union.
Our responsibility
Our responsibility is to express to the Company a conclusion on the condensed
set of financial statements in the half-yearly financial report based on our
review. This report, including the conclusion, has been prepared for and only
for the Company for the purpose of the Disclosure and Transparency Rules of the
Financial Services Authority and for no other purpose. We do not, in producing
this report, accept or assume responsibility for any other purpose or to any
other person to whom this report is shown or into whose hands it may come save
where expressly agreed by our prior consent in writing.
Scope of review
We conducted our review in accordance with International Standard on Review
Engagements (UK and Ireland) 2410, 'Review of Interim Financial Information
Performed by the Independent Auditor of the Entity' issued by the Auditing
Practices Board for use in the United Kingdom. A review of interim financial
information consists of making enquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other review
procedures. A review is substantially less in scope than an audit conducted in
accordance with International Standards on Auditing (UK and Ireland) and
consequently does not enable us to obtain assurance that we would become aware
of all significant matters that might be identified in an audit. Accordingly, we
do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe
that the condensed set of financial statements in the half-yearly financial
report for the 26 weeks ended 27 December 2008 is not prepared, in all material
respects, in accordance with International Accounting Standard 34 as adopted by
the European Union and the Disclosure and Transparency Rules of the United
Kingdom's Financial Services Authority.
Emphasis of matter - going concern
In forming our conclusion on the condensed set of financial statements, which is
not qualified, we have considered the adequacy of the disclosure made in note 2
to the condensed set of financial statements concerning the Group's ability to
continue as a going concern. That note discloses that given the prevailing
difficult economic conditions and the level of uncertainty regarding their
duration and severity, there is an associated material uncertainty over the
Group's future performance which may impact its ability to remain within the
terms of its committed borrowing facilities. This indicates the existence of a
material uncertainty which may cast significant doubt about the Group's ability
to continue as a going concern. The financial statements do not include the
adjustments that would result if the Company was unable to continue as a going
concern.
PricewaterhouseCoopers LLP
Chartered Accountants
London
26 February 2009
This information is provided by RNS
The company news service from the London Stock Exchange
END
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