TIDMCOM

RNS Number : 2858N

Comptoir Group PLC

22 September 2023

22 September 2023

Comptoir Group plc

("Comptoir", the "Company" or the "Group")

Interim Results

Comptoir Group Plc (AIM: COM), the owner and/or operator of Lebanese and Middle Eastern restaurants, is pleased to announce its interim results for the six-month period ended 2 July 2023.

Financial Highlights

   --      Group revenue of GBP14.8m, an increase of 2.1% (H1 2022: GBP14.5m) 
   --      Like for Like sales growth of 6.0% (Vat Adjusted) 
   --      Gross Profit of GBP11.5m (H1 2022: GBP11.5m) 

-- Adjusted EBITDA* before highlighted items of GBP1m, a decrease of 73.7% (H1 2022 Restated: GBP3.8m)

   --      IFRS loss after tax of GBP0.8m (H1 2022: GBP0.9m Profit) 

-- Net cash and cash equivalents at the period end of GBP5.7m ((H1 2022: GBP8.2m; 1 January 2023: GBP7.7m)

-- The basic loss per share for the period was 0.64 pence (H1 2022: basic earnings per share 0.77p)

   --      Currently own and operate 20 restaurants, with a further 6 franchise restaurants 
   --      Terms agreed for 2 new sites including a London flagship restaurant, opening in early 2024 

*Adjusted EBITDA was calculated from the profit/(loss) before taxation adding back interest, depreciation, share-based payments, and non-recurring costs (note 11).

Beatrice Lafon, Non-executive Chair, said: "We are pleased with our first half results, delivering growth in total like-for-like sales (VAT adjusted) of 6.0% as we continue the transformation programme we started at the end of 2022. Total dine-in like-for-like sales (VAT adjusted) were up 8.1%.

Against this backdrop, t he Group is navigating a challenging trading environment, with the macroeconomic pressures of the continuing cost of living crisis, high inflation and the removal of government support with business rates and VAT resulting in a decrease in profit. Utilities costs will significantly decline from Q4 and other inflationary sensitive costs like ingredients and labour have now started to plateau. The net effect will bring improved performance towards the end of this year.

Trading continues to be impacted by significant events outside of our direct control such as the ongoing public transport industrial action which now enters a second year. We have also had a relatively poor summer in terms of terrace weather. Both of these issues have adversely impacted our sites, despite the welcome relief that a warm start to September and the completion of our terraces' refurbishment has so far brought to footfall.

Significant progress has been made in the first six months of the year for those aspects that we can control: new menus have been implemented across all our brands, particularly in Comptoir Libanais; the changes are the most expansive seen in several years and have been well received by customers. We have rebuilt our restaurants' teams and a new Hospitality Training Programme is underway in all locations.

Having announced the opening of our first new owned site in over four years in Ealing later this year, we will continue our growth plans into 2024 as we are close to securing a new flagship Comptoir Libanais. We also continue to grow our franchise business first with our existing partner HMS Host and the opening of the first franchised Shawa in Abu Dhabi but also with a new additional partner which will see us open in Milan airport in 2024. Furthermore, a new digital experience will be offered to our guests in early 2024, our first web revamp in eight years.

Comptoir Group remains in a strong financial position to take advantage of future opportunities and to continue to innovate. Whilst we remain cautious about the immediate future as macro challenges continue to prevail, we are optimistic about the longer-term prospects for the business."

Change of Name of Nominated Adviser and Broker

The Company also announces that its Nominated Adviser and Broker has changed its name to Cavendish Capital Markets Limited following completion of its own corporate merger.

Enquiries

   Comptoir Group plc                                                     via Camarco 

Beatrice Lafon, Non-Executive Chair

Nick Ayerst, CEO

Michael Toon, FD

Cavendish Capital Market Limited (Nominated Adviser and Broker)

   Simon Hicks                                                                 0207 220 0500 

Camarco (press enquiries)

   Jennifer Renwick                                                           comptoir@camarco.co.uk 

Letaba Rimell

Notes to Editors

Comptoir Group PLC owns and operates 26 Lebanese restaurants, six of which are franchised, based predominately in the UK. The flagship brand of the group, Comptoir Libanais, is a collection of 20 restaurants located across London and nationwide, including cities such as Manchester, Bath, Birmingham, Oxford and Exeter.

The name Comptoir Libanais means Lebanese Counter and is a place where guests can eat casually and enjoy Middle Eastern food, served with warm and friendly hospitality, just like back home.

The Group also operates Shawa, serving traditional shawarmas through a counter service model in Westfield and Bluewater shopping centres, Yalla-Yalla with branches near Oxford Circus and in Soho, and entertainment venue Kenza, located in Devonshire Square, London.

The group has expanded internationally with its franchise partners HMSHOST, with restaurants in the Netherlands, Qatar and Dubai.

Chief Executive's review

I am pleased to report the results for the six-month period ending 3 July 2023. The performance of the Group's various brands and restaurants during these first six months has been in line with management's expectations, with strong top-line trading being offset by increased costs, stemming in the main from food inflation, the increase in the national minimum wage and significant increases in our utility costs.

The underlying trading performance has remained resilient and is a testament to the hard work of our teams, who have had another interrupted period of trade due to regular train strikes which have an impact on a significant number of our sites. To support our teams, we have continued to invest in our people and our infrastructure, implementing several strategies to simplify the business and improve efficiency. These include investment in our tech stack such as tablets for integrated ordering at tables, pay-at-table QR codes and improved labour productivity tools. This has also been allied with substantial investment in team training following significant brand work for Comptoir Libanais.

During the six-month period, once again, some exceptional challenges were presented to the business. In comparison to 2022, there was no government support in respect of business rates and VAT, whereas in 2022 these were still significantly lower than where we find ourselves now. At the same time, the National Living Wage (NLW) increased by 9.7% from GBP9.50 to GBP10.42. As the war in Ukraine continues into a second year, we are still seeing a significant impact on utility and food prices, though as noted in the 2022 results announcement this was anticipated and the pressure is starting to plateau. Food inflation in the business has reduced the profit conversion but the overall impact is significantly less than the headline rate across the industry, thanks mainly to the excellent work done on our supply chain and logistics, including the consolidation of a previously fragmented supply chain. Utilities in these 6 months were the highest in the Group's history as, like many of our peers, we entered into a short-term contract in September 2022 for 12 months at a significantly higher rate than the previous two-year agreement. Even with the government cap benefit in the first three months of 2023, this cost was hugely increased compared to the same period in 2022. However, I can confirm that we have hedged on a three-year flexible contract from September 2023 at a rate significantly lower than that seen in the first half of 2023. As ever the business will work to mitigate all costs as look to deliver excellence to our guests in the most cost-efficient manner.

Thanks to our strong relationships with our current landlords and a proactive approach to finding suitable new sites, there is an opportunity for the Group to add to its site pipeline. We have exchanged on a new site in Ealing where we will begin trading in October and have two other sites in advanced discussions. As well as managed site growth, we continue to expand our footprint with our franchise partners and expect to open two sites by the end of 2023, one with our existing partner where we will open our shawarma-based QSR brand Shawa in Abu Dhabi, and a Comptoir Libanais in Milan airport with our new partner AREAS, one of the largest operators of food and beverage in global airports. In terms of the existing estate, we had a significant number of lease renewals to negotiate, and these have been successfully concluded, ahead of expectations, which is a testament to our strong relationship with our current landlords and the power of the brands within the Group's portfolio.

Financial Performance Half-Year

The total revenue for the Group for the half-year was GBP14.8m (H1 2022 GBP14.5m) and the adjusted EBITDA profit was GBP1.0m (H1 2022 GBP3.8m). Like-for-like sales were pleasing at 6.0% (VAT adjusted) with LFL Dine in sales growing by 8.1% (VAT adjusted) but conversely, in line with the rest of the industry, we have seen delivery sales decline post the growth seen during the years disrupted by Covid. Franchise system sales grew 150.5% (+14.9% Like for Like) in the six-month period with the new sites opening in 2022 performing extremely well. Stansted in particular is benefiting from the growth in Travel.

The Group controls remained strong, but profit declined due to the aforementioned impact of VAT and Business Rates returning to previous levels, as well as the utility, food and wage inflation. The impact of the VAT movement back to 20% was GBP388k in comparison to 2022. The IFRS loss after tax was GBP0.78m (H1 2019: GBP0.9m profit).

During the period we closed one site (Comptoir Leeds). We do not envisage any further closures across the Group this year.

A summary of the financial performance for the half year is shown in the table below:

 
                             Post IFRS    Pre IFRS     Post IFRS    Pre IFRS     Post IFRS    Pre IFRS 
                              16           16           16           16           16           16 
                            2 July       2 July       Restated     Restated     Restated     Restated 
                             2023         2023         3 July       3 July       1 January    1 January 
                                                       2022         2022         2023         2023 
                             GBP          GBP          GBP          GBP          GBP          GBP 
 
 Revenue                    14,801,949   14,801,949   14,501,725   14,501,725   31,046,546   31,046,546 
 
 Adjusted EBITDA: 
 
 Profit after 
  tax                       (780,460)    (545,243)    945,825      737,267      588,304      264,463 
 Add back: 
 Finance costs              497,567      67,731       409,860      41,319       1,042,697    94,078 
 Taxation                   (496,100)    (496,100)    361,081      361,081      314,146      314,146 
 Depreciation               1,655,805    561,532      1,628,502    540,612      3,252,841    1,124,243 
 Impairment of 
  assets                    -            -            336,356      -            78,266       - 
 EBITDA                     876,812      (412,080)    3,681,624    1,680,279    5,276,254    1,796,930 
 Share-based 
  payments expense          10,006       10,006       14,050       14,450       15,377       15,377 
 Loss on disposal 
  of fixed assets           -            -            -            -            8,188        8,188 
 Exceptional 
  legal and professional 
  fees                      23,045       23,045       -            -            1,002,054    1,002,054 
 Restaurant opening 
  costs                     -            -            38,245       38,245       36,745       36,745 
 Restaurant closing 
  costs                     75,657       75,657       -            -            28,628       28,628 
 Dilapidations              16,493       16,493       17,334       17,334       5,956        5,956 
 Adjusted EBITDA            1,002,013    (286,879)    3,751,253    1,750,308    6,373,203    2,893,879 
 

We continue to prioritise our team's well-being and the Group has looked to improve the benefits available to the staff increasing pay rates, bonus potential as well as mental and physical health care schemes.

Nicole Goodwin joined as Director of Marketing. Nicole is an award-winning Marketing Director with over 25 years of experience across diverse market-leading FMCG & drinks brands and has already made a substantial contribution as we add to the Group's expertise and plan for future opportunities.

Current and future outlook

Despite the challenging macro environment, trading and the overall outperformance of our peers is encouraging. The Group has a strong base to continue to operate from, and we will look to grow in H2 and into 2024 and beyond. The Board has every confidence in the prospects for the remainder of the year and into 2024.

Nick Ayerst

Chief Executive Officer

22 September 2023

Consolidated statement of comprehensive income

For the half-year ended 2 July 2023

 
                                      Notes   Half-year     Half-year     Period 
                                               ended 2       ended 3       ended 1 
                                               July 2023     July 2022     January 
                                                                           2023 
                                               GBP           GBP           GBP 
 Revenue                                      14,801,949    14,501,725    31,046,546 
 Cost of sales                                (3,264,510)   (2,994,130)   (6,605,074) 
 Gross profit                                 11,537,439    11,507,595    24,441,472 
 Distribution expenses                        (6,077,722)   (5,308,893)   (11,431,633) 
 Administrative expenses                      (6,246,967)   (4,741,711)   (11,357,436) 
 Other income                                 8,257         259,775       292,744 
 Operating (loss)/profit              3       (778,993)     1,716,766     1,945,147 
 Finance costs                                (497,567)     (409,860)     (1,042,697) 
 Profit/(loss) before tax                     (1,276,560)   1,306,906     902,450 
 Taxation charge                              496,100       (361,081)     (314,146) 
 Loss/(profit) for the year                   (780,460)     945,825       588,304 
 Other comprehensive income                   -             -             - 
                                             ------------  ------------  ------------- 
 Total comprehensive (loss)/profit 
  for the year                                (780,460)     945,825       588,304 
-----------------------------------  ------  ------------  ------------  ------------- 
 
 Basic (loss)/earnings per share 
  (pence)                             6       (0.64)        0.77          0.48 
 Diluted (loss)/earnings per 
  share (pence)                       6       (0.64)        0.77          0.48 
-----------------------------------  ------  ------------  ------------  ------------- 
 

All the above results are derived from continuing operations.

Consolidated balance sheet

At 2 July 2023

 
                                  Notes   2 July         3 July         1 January 
                                           2023           2022           2023 
                                          GBP            GBP            GBP 
 Non-current assets 
 Intangible assets                7       29,134         55,267         29,134 
 Property, plant and equipment    8       6,536,519      6,970,576      6,708,383 
 Right-of-use assets              8       12,607,187     14,872,490     13,704,427 
 Deferred tax asset                       224,133        -              - 
-------------------------------  ------  -------------  -------------  ------------- 
                                          19,396,973     21,898,333     20,441,944 
 Current asset 
 Inventories                              526,071        517,775        474,655 
 Trade and other receivables              1,379,568      1,627,408      1,220,053 
 Cash and cash equivalents                7,640,868      10,738,261     9,930,323 
-------------------------------  ------  -------------  -------------  ------------- 
                                          9,546,507      12,883,444     11,625,031 
 
 Total assets                             28,943,480     34,781,777     32,066,975 
-------------------------------  ------  -------------  -------------  ------------- 
 
 Current liabilities 
 Borrowings                               (600,000)      (600,000)      (600,000) 
 Trade and other payables                 (5,793,557)    (6,924,257)    (6,399,675) 
 Lease liabilities                        (1,165,194)    (2,380,659)    (2,351,410) 
 Current tax liabilities                  -              (104,839)      - 
-------------------------------  ------  -------------  -------------  ------------- 
                                          (7,558,751)    (10,009,755)   (9,351,085) 
 Non-current liabilities 
 Borrowings                               (1,300,000)    (1,900,000)    (1,600,000) 
 Provisions for liabilities               (373,347)      (735,686)      (362,088) 
 Lease liabilities                        (15,728,067)   (16,811,910)   (15,728,066) 
 Deferred tax liability                   -              (214,063)      (271,967) 
-------------------------------  ------  -------------  -------------  ------------- 
                                          (17,401,414)   (19,661,659)   (17,962,121) 
 
 Total liabilities                        (24,960,165)   (29,671,414)   (27,313,206) 
-------------------------------  ------  -------------  -------------  ------------- 
 
 Net assets                               3,983,315      5,110,363      4,753,769 
-------------------------------  ------  -------------  -------------  ------------- 
 
 Equity 
 Share capital                    9       1,226,667      1,226,667      1,226,667 
 Share premium                            10,050,313     10,050,313     10,050,313 
 Other reserves                           155,105        144,172        145,099 
 Retained losses                          (7,448,770)    (6,310,789)    (6,668,310) 
-------------------------------  ------  -------------  -------------  ------------- 
 Total equity                             3,983,315      5,110,363      4,753,769 
-------------------------------  ------  -------------  -------------  ------------- 
 

Consolidated statement of changes in equity

For the half-year ended 2 July 2023

 
                               Notes   Share capital   Share premium   Other reserves   Retained losses   Total equity 
                                       GBP             GBP             GBP              GBP               GBP 
 At 2 January 2022                     1,226,667       10,050,313      145,099          (6,668,310)       4,753,769 
 
 Total comprehensive income 
 Loss for the period           3       -               -               -                (780,460)         (780,460) 
 
 Transactions with owners 
 Share-based payments          5       -               -               10,006           -                 10,006 
 At 3 July 2023                        1,226,667       10,050,313      155,105          (7,448,770)       3,983,315 
----------------------------  ------  --------------  --------------  ---------------  ----------------  ------------- 
 
 
 At 3 January 2022                     1,226,667       10,050,313      129,722          (7,256,614)       4,150,088 
 
 Total comprehensive loss 
 Loss for the period           3       -               -               -                945,825           945,825 
 
 Transactions with owners 
 Share-based payments          5       -               -               14,450           -                 14,450 
 At 3 July 2022                        1,226,667       10,050,313      144,172          (6,310,789)       5,110,363 
----------------------------  ------  --------------  --------------  ---------------  ----------------  ------------- 
 
 
 At 3 January 2022                     1,226,667       10,050,313      129,722          (7,256,614)       4,150,088 
 
 Total comprehensive income 
 Profit for the period         3       -               -               -                588,304           588,304 
 
 Transactions with owners 
 Share-based payments          5       -               -               15,377           -                 15,377 
 At 1 January 2023                     1,226,667       10,050,313      145,099          (6,668,310)       4,753,769 
----------------------------  ------  --------------  --------------  ---------------  ----------------  ------------- 
 

Consolidated statement of cash flows

For the half-year ended 2 July 2023

 
                                          Notes   Half-year     Half-year      Period 
                                                   ended 2       ended 3        ended 1 
                                                   July 2023     July 2022      January 
                                                                                2023 
                                                  GBP           GBP            GBP 
 Operating activities 
 
 Cash inflow from operations              10      81,028        2,897,522      4,368,949 
 Interest paid                                    (67,731)      (41,319.00)    (94,078) 
 Tax paid                                         -             -              - 
 Net cash from operating activities               13,297        2,856,203      4,274,871 
---------------------------------------  ------  ------------  -------------  ------------ 
 
 Investing activities 
 
 Purchase of property, plant 
  & equipment                             8       (386,701)     (278,319)      (581,250) 
 Net cash used in investing 
  activities                                      (386,701)     (278,319)      (581,250) 
---------------------------------------  ------  ------------  -------------  ------------ 
 
 Financing activities 
 
 Payment of lease liabilities                     (1,616,051)   (1,407,422)    (3,031,097) 
 Bank loan proceeds                               -             -              - 
 Bank loan repayments                             (300,000)     (300,000.00)   (600,000) 
 Net cash used from financing 
  activities                                      (1,916,051)   (1,707,422)    (3,631,097) 
---------------------------------------  ------  ------------  -------------  ------------ 
 
 Increase in cash and cash equivalents            (2,289,455)   870,462        62,524 
 Cash and cash equivalents at 
  beginning of period                             9,930,323     9,867,799      9,867,799 
 
 Cash and cash equivalents at 
  end of period                                   7,640,868     10,738,261     9,930,323 
---------------------------------------  ------  ------------  -------------  ------------ 
 

Notes to the financial information

For the half-year ended 2 July 2023

   1.    Basis of preparation 

The consolidated financial information for the half-year ended 2 July 2023, has been prepared in accordance with the accounting policies the Group applied in the Company's latest annual audited financial statements and are expected to be applied in the annual financial statements for the period ending 1 January 2023. These accounting policies are based on the UK-adopted International Financial Reporting Standards ("IFRS") and International Financial Reporting Interpretation Committee ("IFRIC") interpretations. The consolidated financial information for the half-year ended 2 July 2023 has been prepared in accordance with IAS 34: 'Interim Financial Reporting', as adopted by the UK, and under the historical cost convention.

The financial information relating to the half-year ended 2 July 2023 is unaudited and does not constitute statutory financial statements as defined in section 434 of the Companies Act 2006. The comparative figures for the period ended 1 January 2023 have been extracted from the consolidated financial statements, on which the auditors gave an unqualified audit opinion and did not include a statement under section 498 (2) or (3) of the Companies Act 2006. The annual report and accounts for the period ended 1 January 2023 has been filed with the Registrar of Companies.

The Group's financial risk management objectives and policies are consistent with those disclosed in the period ended 1 January 2023 annual report and accounts.

The half-yearly report was approved by the board of directors on 22 September 2023. The half-yearly report is available on the Comptoir Libanais website, www.comptoirgroup.com , and at Comptoir Group's registered office, Unit 2, Plantain Place, Crosby Row, London Bridge, SE1 1YN.

   2.    Changes in accounting policies 

The accounting policies adopted in the preparation of the consolidated financial information for the half-year ended 2 July 2023 are consistent with those followed in the preparation of the Group's annual consolidated financial statements for the year ended 1 January 2023.

At the date of authorisation of the half-yearly report, the following amendments to Standards and Interpretations issued by the IASB that are effective for an annual period that begins on or after 1 January 2023. These amendments have not had any material impact on the amounts reported for the current and prior years.

Standard or Interpretation Effective Date

IFRS 17 - Insurance Contracts 1 January 2023

IAS 8 - Definition of Accounting Estimates 1 January 2023

IAS 1 - Disclosure of Accounting Policies 1 January 2023

IAS 12 - Deferred Tax Arising from a Single Transaction 1 January 2023

Initial Application of IFRS 17 and IFRS 9 - Comparative Information 1 January 2023

New and revised Standards and Interpretations in issue but not yet effective

At the date of authorisation of these financial statements, the Group has not early adopted the following amendments to Standards and Interpretations that have been issued but are not yet effective:

Standard or Interpretation Effective Date

IAS 1 Classification of liabilities as current or non-current

1 January 2024

IAS 1 - Non-current liabilities with covenants 1 January 2024

IFRS 7 - Supplier finance arrangements 1 January 2024

IFRS 16 - Lease liability in a Sale and Leaseback 1 January 2024

As yet, none of these have been endorsed for use in the UK and will not be adopted until such time as endorsement is confirmed. The directors do not expect any material impact as a result of adopting standards and amendments listed above in the financial year they become effective.

Critical accounting judgements and key sources of estimation uncertainty

The preparation of financial statements in conformity with IFRS requires management to make judgments, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgements about carrying values of assets and liabilities that are not readily apparent from other sources. The resulting accounting estimates may differ from the related actual results.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

In the process of applying the Group's accounting policies, management has made a number of judgments and estimations of which the following are the most significant. The estimates and assumptions that have a risk of causing material adjustment to the carrying amounts of assets and liabilities within the future financial years are as follows:

Depreciation, useful lives and residual values of property, plant & equipment

The Directors estimate the useful lives and residual values of property, plant & equipment in order to calculate the depreciation charges. Changes in these estimates could result in changes being required to the annual depreciation charges in the statement of comprehensive incomes and the carrying values of the property, plant & equipment in the balance sheet.

Impairment of assets

The Group assesses at each reporting date whether there is an indication that an asset may be impaired. If any such indication exists, or when annual impairment testing for an asset is required, the Group makes an estimate of the asset's recoverable amount. An asset's recoverable amount is the higher of an asset's or cash-generating unit's fair value less costs to sell and its value in use and is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets.

Critical accounting judgements and key sources of estimation uncertainty (continued)

Where the carrying amount of an asset exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. In assessing value in use, the estimated future cash flows are discounted to their present value of money and the risks specific to the asset. Impairment losses of continuing operations are recognised in the profit or loss in those expense categories consistent with the function of the impaired asset. Please refer to note 8 for further details on impairments.

Leases

The Group has estimated the lease term of certain lease contracts in which they are a lessee, including whether they are reasonably certain to exercise lessee options. The incremental borrowing rate used to discount lease liabilities has also been estimated in the range of 2.6% to 4%. This is assessed as the rate of interest that would be payable to borrow a similar about of money for a similar length of time for a similar right-of-use asset.

Deferred tax assets

Historically, deferred tax assets had been recognised in respect of the total unutilised tax losses within the Group. A condition of recognising this amount depended on the extent that it was probable that future taxable profits will be available.

   3.    Group operating profit/(loss) 
 
                                               Half-year       Half-year       Period ended 
                                                ended 2 July    ended 3 July    1 January 
                                                2023            2022            2023 
 This is stated after (crediting)/charging:    GBP             GBP             GBP 
 Variable lease charges                        347,069         385,208         444,327 
 Rent concessions                              -               (150,887)       (171,856) 
 Share-based payments expense 
  (note 5)                                     10,006          14,450          15,377 
 Depreciation of property, plant 
  and equipment (note 8)                       1,655,805       1,628,502       3,252,841 
 Impairment of assets (note 
  7 & 8)                                       -               -               78,266 
 Loss on disposal of fixed assets              -               -               8,188 
 Auditors' remuneration                        -               -               75,000 
 Exceptional legal and professional 
  fees                                         23,045          -               1,002,054 
--------------------------------------------  --------------  --------------  -------------- 
 
                                               Half-year       Restated        Restated 
                                                ended 3 July    Half-year       Period ended 
                                                2023            ended 3 July    1 January 
                                                                2022            2023 
                                               GBP             GBP             GBP 
 Restaurant opening costs                      -               38,245          36,745 
 Restaurant closing costs                      75,657          -               28,628 
 Dilapidations                                 16,493          17,334          5,956 
                                               92,150          55,579          71,330 
--------------------------------------------  --------------  --------------  -------------- 
 

For the initial trading period following opening of a new restaurant, the performance of that restaurant will be lower than that achieved by other, similar, mature restaurants. The difference in this performance, which is calculated by reference to gross profit margins amongst other key metrics, is quantified and included within opening costs. The breakdown of opening costs, between pre-opening costs and post-opening costs is shown above.

   4.    Operating segments 

The Group has only one operating segment: the operation of restaurants with Lebanese and Middle Eastern offering and one geographical segment (the United Kingdom). The Group's brands meet the aggregation criteria set out in paragraph 22 of IFRS 8 "Operating Segments" and as such the Group reports the business as one reportable segment. None of the Group's customers individually contribute over 10% of the total revenue.

   5.    Share options and share-based payment charge 

On 4 July 2018, the Group established a Company Share Option Plan ("CSOP") under which 4,890,000 share options were granted to key employees. The CSOP scheme includes all subsidiary companies headed by Comptoir Group PLC. The exercise price of all of the options is GBP0.1025, which all carry a three year vesting period and the term to expiration is ten years from the date of grant (4 July 2018).

On 21 May 2021, the Group established another Company Share Option Plan ("CSOP") under which 3,245,000 share options were granted to key employees. The CSOP scheme includes all subsidiary companies headed by Comptoir Group PLC. The exercise price of all of the options is GBP0.0723, which all carry a three year vesting period and the term to expiration is ten years from the date of grant (21 May 2021).

The total share-based payment charge for the period was GBP10,006 (H1 2021: GBP14,450, 1 January 2023: GBP15,377).

6. Earnings/(loss) per share

The Company had 122,666,667 ordinary shares of GBP0.01 each in issue at 2 July 2023. The basic and diluted earnings/(loss) per share figures, is based on the weighted average number of shares in issue during the periods. The basic and diluted earnings/(loss) per share figures are set out below.

 
                                               Half-year     Half-year     Period 
                                                ended 2       ended 3       ended 1 
                                                July 2023     July 2022     January 
                                                                            2023 
                                               GBP           GBP           GBP 
 Profit/(loss) attributable to shareholders    (780,460)     945,825       588,304 
 
 Weighted average number of shares             Number        Number        Number 
 For basic earnings/(loss) per share           122,666,667   122,666,667   122,666,667 
 Adjustment for options outstanding            -             558,126       - 
                                                                          ------------ 
 For diluted earnings/(loss) per share         122,666,667   123,224,793   122,666,667 
--------------------------------------------  ------------  ------------  ------------ 
 
 Earning/(loss) per share:                     Pence per     Pence per     Pence per 
                                                share         share         share 
 Basic (pence) 
 From profit/(loss) for the year               (0.64)        0.77          0.48 
 
 Diluted (pence) 
 From profit/(loss) for the year               (0.64)        0.77          0.48 
 
   6.    Earnings/(loss) per share (continued) 

The basic and diluted earnings/(loss) per share is calculated by dividing the profit or loss attributable to ordinary shareholders by the weighted average number of shares and 'in the money' share options in issue. Share options are classified as 'in the money' if their exercise price is lower than the average share price for the period.

As required by 'IAS 33: Earnings per share', this calculation assumes that the proceeds receivable from the exercise of 'in the money' options would be used to purchase shares in the open market in order to reduce the number of new shares that would need to be issued. The shares were not 'in the money' as at the half-year ended 2 July 2023 or period ended 1 January 2023 and consequently would be antidilutive. Therefore, no adjustment was made in respect of the share options outstanding to determine the diluted number of options for these periods.

   7.    Intangible assets 
 
                                            Goodwill   Total 
 Cost                                       GBP        GBP 
 At 2 January 2023                          89,961     89,961 
 Additions                                  -          - 
                                           ---------  --------- 
 At 2 July 2023                             89,961     89,961 
-----------------------------------------  ---------  --------- 
 
 Accumulated amortisation and impairment 
 At 2 January 2023                          (60,827)   (60,827) 
 Amortised during the year                  -          - 
 Impairment during the year                 -          - 
                                           ---------  --------- 
 At 2 July 2023                             (60,827)   (60,827) 
-----------------------------------------  ---------  --------- 
 
 Net Book Value as at 2 July 2023           29,134     29,134 
-----------------------------------------  ---------  --------- 
 Net Book Value as at 3 July 2022           55,267     55,267 
-----------------------------------------  ---------  --------- 
 Net Book Value as at 1 January 2023        29,134     29,134 
-----------------------------------------  ---------  --------- 
 

Intangible fixed assets consist of goodwill from the acquisition of Agushia Limited, which included the Yalla Yalla brand. Goodwill arising on business combinations is not amortised but is subject to an impairment test annually which compares the goodwill's 'value in use' to its carrying value. No impairment of goodwill was considered necessary in the current period.

   8.    Property, plant and equipment 
 
                             Right-of       Leasehold     Plant            Fixture,       Motor       Total 
                              use assets     land and      and machinery    fittings       vehicles 
                                             buildings                      & equipment 
 Cost                        GBP            GBP           GBP              GBP            GBP         GBP 
 At 2 January 2023           28,596,410     10,371,174    5,093,306        2,991,247      38,310      47,090,447 
 Additions                   -              -             164,113          222,588        -           386,701 
 Disposals                   -              (11,290)      -                -              -           (11,290) 
 At 2 July 2023              28,596,410     10,359,884    5,257,419        3,213,835      38,310      47,465,858 
--------------------------  -------------  ------------  ---------------  -------------  ----------  ------------- 
 
 Accumulated depreciation 
  and impairment 
 At 2 January 2023           (14,891,983)   (6,820,336)   (3,236,904)      (1,717,177)    (11,237)    (26,677,637) 
 Depreciation during 
  the year                   (1,097,240)    (310,621)     (160,218)        (84,866)       (2,860)     (1,655,805) 
 Disposals during the 
  year                       -              11,290        -                -              -           11,290 
 At 2 July 2023              (15,989,223)   (7,119,667)   (3,397,122)      (1,802,043)    (14,097)    (28,322,152) 
--------------------------  -------------  ------------  ---------------  -------------  ----------  ------------- 
 
 Net book value 
 At 2 July 2023              12,607,187     3,240,217     1,860,297        1,411,792      24,213      19,143,706 
 At 3 July 2022              14,872,490     3,906,950     1,737,645        1,292,779      33,202      21,843,066 
 At 1 January 2023           13,704,427     3,550,838     1,856,402        1,274,070      27,073      20,412,810 
--------------------------  -------------  ------------  ---------------  -------------  ----------  ------------- 
 

At each reporting date the Group considers any indication of impairment to the carrying value of its property, plant and equipment. The assessment is based on expected future cash flows and Value-in-Use calculations are performed annually and at each reporting date and is carried out on each restaurant as these are separate 'cash generating units' (CGU). Value-in-Use was calculated as the net present value of the projected risk-adjusted post-tax cash flows plus a terminal value of the CGU. A pre-tax discount rate was applied to calculate the net present value of pre-tax cash flows. The discount rate was calculated using a market participant weighted average cost of capital. A single rate has been used for all sites as management believe the risks to be the same for all sites.

The recoverable amount of each CGU has been calculated with reference to its Value-in-Use. The key assumptions of this calculation are shown below:

   Growth rate                               3% 
   Discount rate                            4.4% 
   Number of years projected        over life of lease 

The value-in-use figure has been calculated using the expected annual cashflows of the Group from the latest forecasts at the time of review. In producing the forecasts, the Directors have considered the impact of current inflation levels, rising wage costs as well as the potential risk of recession.

The growth rate is based on a combination of industry average growth rates, actual results achieved historically and the current economic conditions. Sensitivity analysis was performed on the forecasted cashflows as well as the growth rate and only a significant reduction in cashflows would result in a material impairment charge. Therefore, based on the impairment review and sensitivity analysis carried out, an impairment charge of GBPnil (H1 2022: GBPnil, 1 January 2023: GBP78,266) was recorded for the period.

   9.    Share capital 
 
 Authorised, issued and fully paid    Number of shares 
                                      2 July        3 July        1 January 
                                       2023          2022          2023 
 Brought forward                      122,666,667   122,666,667   122,666,667 
 Issued in the period                 -             -             - 
                                     ------------  ------------  ------------ 
                                      122,666,667   122,666,667   122,666,667 
-----------------------------------  ------------  ------------  ------------ 
 
                                      Nominal value 
                                      2 July        3 July        1 January 
                                       2023          2022          2023 
                                      GBP           GBP           GBP 
 Brought forward                      1,226,667     1,226,667     1,226,667 
 Issues in the period                 -             -             - 
                                     ------------  ------------  ------------ 
                                      1,226,667     1,226,667     1,226,667 
-----------------------------------  ------------  ------------  ------------ 
 
   10.   Cash flow from operations 

Reconciliation of profit/(loss) to cash generated from operations:

 
                                            Half-year    Half-year    Period 
                                             ended 2      ended 3      ended 1 
                                             July 2023    July 2022    January 
                                                                       2023 
                                            GBP          GBP          GBP 
 Operating (loss)/profit for the 
  period                                    (778,993)    1,716,766    1,945,147 
 
 Depreciation                               1,655,805    1,628,502    3,252,841 
 Loss on disposal of fixed assets           -            -            8,188 
 Impairment of assets                       -            -            78,266 
 Share-based payment charge                 10,006       14,450       15,377 
 Rent concessions                           -            (150,887)    (171,856) 
 
 Movements in working capital 
 Increase in inventories                    (51,416)     (51,885)     (8,765) 
 Increase in trade and other receivables    (159,506)    (928,416)    (521,065) 
 (Increase)/decrease in payables 
  and provisions                            (594,868)    668,992      (229,184) 
 
 Cash generated from operations             81,028       2,897,522    4,368,949 
-----------------------------------------  -----------  -----------  ---------- 
 
   11.   Adjusted EBITDA 

Adjusted EBITDA was calculated from the profit/loss before taxation adding back interest, depreciation, share-based payments and non-recurring/non-cash costs incurred in relation to restaurant sites, as follows:

 
                                       Half-year    Restated        Restated 
                                        ended 2      Half-year       Period 
                                        July 2023    ended 3 July    ended 1 
                                                     2022            January 
                                                                     2023 
                                       GBP          GBP             GBP 
 Profit after tax                      (780,460)    945,825         588,304 
 
 Add back: 
 Finance costs                         497,567      409,860         1,042,697 
 Taxation (credit)/charge              (496,100)    361,081         314,146 
 Depreciation                          1,655,805    1,628,502       3,252,841 
 Impairment of assets                  -            336,356         78,266 
 EBITDA                                876,812      3,681,624       5,276,254 
 
 Share-based payments                  10,006       14,050          15,377 
 Loss on disposal of fixed assets      -            -               8,188 
 Exceptional legal and professional 
  fees                                 23,045       -               1,002,054 
 Restaurant opening costs              -            38,245          36,745 
 Restaurant closing costs              75,657       -               28,628 
 Dilapidations                         16,493       17,334          5,956 
 Adjusted EBITDA                       1,002,013    3,751,253       6,373,203 
                                      -----------  --------------  ---------- 
 
   12.   Subsequent events 

The Group exchanged an agreement to open and operate a new Comptoir Libanais in Ealing, London, and is at the final stage of securing a new London flagship site. The group also signed a new Franchise agreement with AREAS.

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END

IR FLFLTALILFIV

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September 22, 2023 02:00 ET (06:00 GMT)

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