RNS Number:1429O
Bank Restaurant Group PLC
30 July 2003
CHAIRMAN'S STATEMENT
INTRODUCTION
30 April 2003 again marked the end of a further difficult six months following
the difficult previous year to 31 October 2002.
As warned in my previous Chairman's Statement, the initial uncertainty created
by the possibility of war in Iraq and the subsequent war in Iraq has adversely
affected the performance of the final two months of the period. That disruption
has resulted in a small loss for the period compared to the expected small
profit.
RESULTS
The results for the six months ended 30 April 2003 show a profit on ordinary
activities before taxation, depreciation and amortisation of goodwill of
#250,000 (six months ended 30 April 2002 #291,000). After deduction of goodwill
amortisation of #29,000 (2002 #75,000) and depreciation of #270,000 (2002
#212,000), the net loss on ordinary activities for year ended 30 April 2003 was
#49,000 (2002 profit #4,000).
OPERATIONAL REVIEW
The Board, as in previous periods, continues to concentrate on cutting costs and
strengthening the Bank name through high profile promotions and activities.
Gross margins continue to be closely controlled.
Bank Aldwych
Bank Aldwych, in common with other restaurants in the Covent Garden area, has
suffered from the weakness in the tourist/theatre market. Whilst the new private
dining room and its related activities have been well received, current sales
remain below the previous year's level.
Bank Birmingham
Bank Birmingham continues to grow with particular emphasis on private dining.
Figures are above last year and the restaurant remains the leader within the
Birmingham restaurant scene.
Bank Westminster
Bank Westminster remains a leading restaurant in the St. James Park area and its
figures are above last year on a like for like basis. Private dining facilities
and events have continued to grow and Zander Bar has established a loyal
clientele.
CHAIRMAN'S STATEMENT (continued)
THE FUTURE
Trading has begun to recover from the low levels experienced during the Iraq
conflict, but London's West End remains more difficult. However, the continued
shortfall in sales at Bank Aldwych will affect the results for the current
period.
The management continue to remain focused on improving performance and cutting
costs.
As stated in my last Chairman's statement, the directors are acutely aware of
the problems associated with the Company's very small size for a public listed
company, both in terms of market capitalisation and overhead recovery from only
three sites. Therefore, the directors have continued to assess all realistic
options with a view to maximising shareholder value, including proposals to
either merge with other restaurant groups and/or raise funds to strengthen the
existing balance sheet. To this end, we have today announced a fundraising to
raise #600,000 (before expenses) which is fully underwritten, the securing of a
new long-term bank facility, which is conditional on completion of the
fundraising, and a strategic investment in the Company by Conran Holdings
Limited. The directors believe that these arrangements fulfil their key
objectives of strengthening the Company's balance sheet and securing a strategic
partner. Conran Holdings Limited, which will be interested in 24.9 per cent. of
the Company's enlarged issued share capital immediately following the
fundraising, has indicated that, after a limited period of due diligence, it may
or may not make a general offer for the Company. Full details of these matters
are being given in a circular to shareholders being posted today.
We continue to progress claims in connection with the original sale and purchase
agreement for the acquisition of the signature restaurants in November 2000,
particularly in regard to hire purchase liabilities.
Finally, I would like to thank our staff for their dedication and good spirit,
and our shareholders for their patience through this difficult period for the
restaurant industry. The directors believe that the funding arrangements
outlined above are in the best interests of shareholders.
L.G. Collins
Chairman
30 July, 2003.
INDEPENDENT REVIEW REPORT TO BANK RESTAURANT GROUP PLC
Introduction
We have been instructed by the company to review the financial information for
the six months ended 30 April 2003 which comprises of the Profit and Loss
Account, Balance Sheet, Statement of Cash Flows and the related notes 1 to 6. We
have read the other information contained in the interim report and considered
whether it contains any apparent misstatements or material inconsistencies with
the financial information.
This report is made solely to the company in accordance with guidance contained
in Bulletin 1999/4 'Review of interim financial information' issued by the
Auditing Practices Board. To the fullest extent permitted by the law, we do not
accept or assume responsibility to anyone other than the company, for our work,
for this report, or for the conclusions we have formed.
Directors' responsibilities
The interim report, including the financial information contained therein, is
the responsibility of, and has been approved by, the directors. The directors
are responsible for preparing the interim report as required by the AIM Rules
issued by the London Stock Exchange.
Review work performed
We conducted our review having regard to the guidance contained in Bulletin 1999
/4 'Review of interim financial information' issued by the Auditing Practices
Board for use in the United Kingdom. A review consists principally of making
enquiries of management and applying analytical procedures to the financial
information and underlying financial data, and based thereon, assessing whether
the accounting policies and presentation have been consistently applied, unless
otherwise disclosed. A review excludes audit procedures such as tests of
controls and verification of assets, liabilities and transactions. It is
substantially less in scope than an audit performed in accordance with United
Kingdom Auditing Standards and therefore provides a lower level of assurance
than an audit. Accordingly we do not express an audit opinion on the financial
information.
Review conclusion
On the basis of our review we are not aware of any material modifications that
should be made to the financial information as presented for the six months
ended 30 April 2003.
Ernst & Young LLP
Becket House,
1 Lambeth Palace Road,
London.
SE1 7EU
30 July 2003
PROFIT AND LOSS ACCOUNT
For the period ended 30 April 2003
Six months Six months Year
Ended Ended Ended
30 April 30 April 31 October
2003 2002 2002
Unaudited Unaudited Audited
Notes #'000 #'000 #'000
Turnover 4,503 4,927 8,996
Cost of sales (3,769) (4,207) (7,512)
Gross profit 734 720 1,484
Administrative expenses (711) (636) (1,729)
Administrative expenses 2 - - (2,000)
exceptional item
Operating profit/(loss) 23 84 (2,245)
Interest payable and similar (72) (80) (135)
charges
(Loss)/profit on ordinary (49) 4 (2,380)
activities before taxation
Tax on profit/(loss) on 3 - - -
ordinary activities
(Loss)/profit for the (49) 4 (2,380)
financial period
Dividends on equity shares 4 - - -
(Loss)/profit retained for the (49) 4 (2,380)
financial period
(Loss)/profit per share - (0.12p) 0.01p (5.60p)
basic and diluted
(Loss)/profit per share - - - (0.89p)
basic and diluted before
exceptional items
BALANCE SHEET
As at 30 April 2003
Six months Six months Year
Ended Ended Ended
30 April 30 April 31 October
2003 2002 2002
Unaudited Unaudited Audited
#'000 #'000 #'000
Fixed assets
Intangible assets 568 1,473 597
Tangible assets 5,465 6,988 5,694
6,033 8,471 6,291
Current assets
Stocks 59 71 66
Debtors 317 352 186
Cash at bank and in hand - - -
Total current assets 376 423 252
Creditors: amounts falling due within (3,664) (2,226) (3,771)
one year
Net current liabilities (3,287) (1,803) (3,519)
Total assets less current 2,746 6,668 2,772
liabilities
Creditors: amounts falling due after (23) (1,512) -
more than one year
2,723 5,156 2,772
Capital reserves
Called up share capital 425 425 425
Share Premium account 7,740 7,740 7,740
Profit and loss account (5,442) (3,009) (5,393)
Equity shareholders' funds 2,723 5,156 2,772
STATEMENT OF CASH FLOWS
For the period ended 30 April 2003
Six months Six months Year
Ended Ended Ended
30 April 30 April 31 October
2003 2002 2002
Unaudited Unaudited Audited
Notes #'000 #'000 #'000
Net cash inflow from operating 6a 307 346 605
activities
Returns on investments and
servicing of finance
Interest paid (71) (78) (132)
Interest element of finance (1) (2) (3)
lease rental payments
-
(72) (80) (135)
Capital expenditure and
financial investment
Payments to acquire tangible (41) (7) (115)
fixed assets
Receipts of disposal of 3 2
tangible fixed assets
(41) (4) (113)
-
Net cash outflow before 194 262 357
financing
Financing
New long term loans 40 - -
Repayment of long terms (130) - (125)
loans
Repayment of capital element
of finance lease (123) (122) (250)
(213) (122) (375)
(Decrease)/increase in cash 6c (19) 140 (18)
NOTES TO THE FINANCIAL STATEMENTS
For the period ended 30 April 2002
1. Financial information and comparatives
The interim results for the period ended 30 April 2003 are unaudited
and do not constitute accounts within the meaning of section 240 of the
Companies Act 1985. The interim results have been drawn up using accounting
policies and presentation consistent with those applied in the audited accounts
for the year ended 31 October 2002. The comparative information contained in
this report for the year ended 31 October 2002 does not constitute the statutory
accounts for that financial period. Those accounts have been reported on by the
Company's Auditors, Ernst & Young LLP and delivered to the Registrar of
Companies. The report of the Auditors was unqualified and did not contain a
statement under section 237(2) or (3) of the Companies Act 1985.
The interim results have been prepared on the going concern basis.
The Company meets its day-to-day working capital requirements through an
overdraft facility, which is repayable on demand. Following the placing, the
Company has agreed a new schedule of capital repayments with its bankers. The
ability of the Company to continue to operate as a going concern is dependent on
support from its bankers, which is conditional on completion of the fundraising
to raise #600,000 (before expenses). On the basis of this fundraising, which is
fully underwritten, the Company has agreed a new schedule of capital repayments
with its bankers. The proceeds from the fundraising will be used to fund
day-to-day working capital requirements and repay part of the bank loan.. The
directors have prepared projected cash flow information for the eighteen months
ending 31 October 2004. On the basis of this cash flow information and the
Company's performance in the current year to date, the directors consider that,
following the fundraising, the Company will be able to meet the agreed schedule
of loan repayments whilst operating within its available overdraft facilities.
On this basis, the directors consider it appropriate to prepare the interim
results on the going concern basis. The interim results do not include any
adjustments that would result from a withdrawal of facilities by the Company's
bankers.
2. Administrative expenses - exceptional
At 31 October 2002 the directors undertook an impairment review of
the three restaurants which has resulted in the following exceptional charges.
In addition to the standard goodwill amortisation charge for the year, a further
#800,000 was written off goodwill during the year in accordance with FRS 11.
This additional charge has been based on the directors' estimate of the net
realisable value at the balance sheet date of goodwill acquired
In addition to the standard depreciation charge for the year, a
further #1,200,000 was written off fixed assets during the year in accordance
with FRS 11. This additional charge has been based on the directors' estimate of
the net realisable value of fixed assets at the balance sheet date of 31 October
2002.
3. Tax on (loss)/profit on ordinary activities
There is no tax liability in the current period.
4. Dividends
No dividend is proposed.
NOTES TO THE FINANCIAL STATEMENTS
5. Earnings/(loss) per share
30 April 30 April 31 October
2003 2002 2002
Average number of ordinary shares in 42,500,000 42,500,000 42,500,000
issue
Loss per share before exceptional items excludes the additional
impairment of #2,000,000 for the year to 31 October 2002. Where there is a loss
per share there are no dilutive effects of share options.
6. Notes to the statement of cashflow
a. Reconciliation of operating profit to net cash inflow from
operating activities
Six months Six months Year
Ended Ended Ended
30 April 30 April 31 October
2003 2002 2002
Unaudited Unaudited Audited
#'000 #'000 #'000
Operating profit/(loss) 23 84 (2,245)
Depreciation charge 270 212 1,624
Loss on disposal of tangible fixed - 2 2
assets
Amortisation charge 29 75 950
Decrease in stocks 7 16 23
Increase in debtors (131) (46) 120
Increase/(decrease) in creditors 109 3 131
307 346 605
b. Analysis of net debt
At Cashflow Other At
31 October Cash 30 April
2002 Movements 2003
#'000 #'000 #'000 #'000
Bank overdrafts (354) (19) - (373)
Bank loans (within one year) (1,875) 130 - (1,745)
Finance leases (129) 123 (40) (46)
(2,358) 234 (40) (2,164)
NOTES TO THE FINANCIAL STATEMENTS
6. Notes to the statement of cashflow (continued)
c. Reconciliation of net cashflow to movement in net debt
Six Months Six Months Year
Ended Ended Ended
30 April 30 April 31 October
2003 2002 2002
Unaudited Unaudited Audited
#'000 #'000 #'000
Increase/(decrease) in cash (19) 140 (18)
Cash inflow from increase in (40) - -
loans
Repayment of long term loans 130 - 125
Repayment of capital element of
finance leases 123 178 250
Movement in net debt 194 318 357
Net debt as at beginning of the (2,358) (2,715) (2,715)
period
Net debt as at end of the period (2,164) (2,397) (2,358)
This information is provided by RNS
The company news service from the London Stock Exchange
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