27 September 2021

Tasty plc

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

Unaudited Interim Results for the 26 weeks ended 27 June 2021

Key Points:

·    Revenue £11.6m (2020: £8.7m); increase of 33%

·    Adjusted EBITDA¹ of £0.8m (2020: loss £0.1m)

·    Impairment charge of £nil (2020: £7.6m)

·    Loss after tax for the period of £2.7m (28 June 2020: loss of £11.0m)

·    Bank loan as at 27 June 2021 of £1.25m (28 June 2020: £nil)

·    Net cash after allowing for bank loan and aged creditors of £4.2m (28 June 2020: net debt of £0.4m)

·    All sites closed from 5 January 2021 for indoor dining, re-opened in April 2021 for outdoor dining and dine-in from May 2021

·    Currently trading from 49 of 54 restaurants - with temporary closures throughout the half-year due to Covid-19

·    Staff shortages have also forced temporary closures and prevented the re-opening of some of the Group's sites

·    Trading post period end to date has exceeded management's expectations

¹                      Adjusted for depreciation, amortisation and share based payments.

Chairman's statement

Introduction

The start of 2021 like 2020 has been a very challenging time but thanks to our dedicated teams, who have worked tirelessly to sustain the business, Tasty has been able to navigate its way through the issues caused by the pandemic. This included lockdowns, re-opening with restrictions and staff shortages.  Tasty has managed to adapt to the changing environment, the different UK Government guidelines whilst at the same time responding to customer preferences and feedback.

Our new bank facility and support from our creditors and landlords, as well as Government support, has seen us through this difficult period, and we now have a viable platform on which to build a successful business.

Since re-opening for dine-in in May 2021, sales have been encouraging. However, we remain cautious in our approach as we are mindful that performance has been assisted by VAT and rate support, staycations, pent-up demand and a higher level of disposable income.

Tasty is now in a good position to take advantage of the opportunities in the sector due to reduced competition and vacant restaurant and retail space.

Rent negotiations

The Group has been successful in achieving rent reductions and lease concessions across most of the estate. Landlords have, in the main, been extremely understanding and supportive.

The Group will continue to review its existing estate to consider further sales of underperforming restaurants. It is likely that certain underperforming sites will not re-open and may be sold or surrendered back to the landlord in future.

With the support of the majority of our landlords we have managed to avoid a Creditors Voluntary Arrangement (CVA) within the Group.  However, with the potential of rising infections as we head into the colder months, we will continue to monitor the situation closely in the coming months.

People

As we have re-opened for dine-in we have been delighted to be creating new jobs. However, like many in the hospitality industry, recruitment and retention has proved to be very difficult, and this continues to be the case.  With the increased sales volume and recruitment not keeping up with the needs of the business, our teams have played a huge part in ensuring that we continue to operate as "normal" as possible. We have been overwhelmed by the dedication and diligence of our teams.

Sam Kaye stepped down from the Board on 14 May 2021 to allow him to focus on his other commercial interests. The Board would once again like to thank Sam for the enormous support and invaluable experience that he has provided to the Group from inception. 

Harald Samúelsson was appointed as a Non-Executive Director in May 2021.   Harald has over 20 years of experience in the UK restaurant industry, including as joint managing Director of Côte Restaurants, and we are delighted to have him on our Board.

We currently have plans to strengthen our senior team to establish a structure that will allow us to expand the business.

Environmental, social and governance

From the onset of the pandemic the Board acted quickly to secure the survival of the business and the long-term financial position of the Group, whilst protecting the health of our employees and customers.  We have also retained our focus on sustainability and the environmental impact of the business, and we are an equal opportunities employer.

Results

Revenue increased by 33% to £11.6m (2020: £8.7m); several factors contributed to this. In H1 2021 even though the lockdown restrictions unexpectedly lasted longer than H1 2020, we were better positioned to take greater advantage of the takeaway and delivery market which has grown significantly throughout the pandemic and continues to remain strong after the re-opening of dine-in. The adjusted EBITDA for the period was £0.8m (2020: loss £0.1m).

Operating loss before highlighted items (as detailed below) was £1.4m (2020: loss £2.7m).

IFRS16 has resulted in depreciation on right-of-use (ROU) assets and the interest charge on lease liabilities being greater than the charge for rent that would have been reported pre-IFRS16; the net impact on reported loss is £0.8m. The interest charge on the lease liabilities is higher in the earlier years of a lease.

We have reviewed the impairment provision across the ROU assets, fixed assets and goodwill and have not made any provision for the period under review (2020: £7.6m). 

After taking into account all non-trade adjustments, the Group has a stated loss after tax for the period of £2.7m (2020: loss £11m).

Cash flows and financing

Cash inflow from operations was £2.4m (2020: £0.8m). During the period, the net proceeds from the sale of property were £nil (2020: £1.9m).  A bank loan of £1.25m was drawn down in January 2021 (2020: repayment of £1.7m).

Overall, the net cash inflow for the period was £1.8m (2020: outflow £1.4m).  As at 27 June 2021, the Group had net cash after bank loan of £8.6m (28 June 2020: net cash of £3.2m).  After allowing for aged creditors net cash was £4.2m (28 June 2020: net debt of £0.4m).

Going concern

Covid-19 and Government restrictions have had a significant impact on trading.  Since the onset of the pandemic the Group has minimised costs and cash outflows. This included negotiating rent reductions and lease concessions across most of the estate.  The Government Job Retention Scheme (CJRS) was used to support furloughed staff.  To improve liquidity, a £1.25m four year term loan was fully drawn down in January 2021.

The Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. In reaching this conclusion the Directors have considered the financial position of the Group, together with its forecasts for the next 12 months from the date of approval of these interim accounts and taking into account possible changes in trading performance. The going concern basis of accounting has, therefore, been adopted in preparing the interim financial report.

Outlook

Trading since re-opening for dine-in in May 2021 has been encouraging and exceeded the Board's expectations. We are hopeful that this will continue to remain positive as schools go back and more people return to the office.  However, we expect that the pent-up demand for eating out will naturally diminish in the winter months and any new Government restrictions on dealing with the pandemic may negatively impact the Group's performance. Despite these uncertainties the Board remains optimistic as to the outlook for the Group and expects to keep under review future opportunities for growth.

Finally thank you once again to all our people, shareholders, suppliers, landlords and other stakeholders who have helped our business in these very difficult times.

K Lassman

Chairman

Tasty plc

27 September 2021

Enquiries:

Tasty plc                                                               Tel: 020 7637 1166

Jonny Plant, Chief Executive

Cenkos Securities                                               Tel: 020 7397 8900

Katy Birkin/Mark Connelly

Certain of the information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the UK version of the EU Market Abuse Regulation (596/2014). Upon publication of this announcement via a regulatory information service, this information is considered to be in the public domain.

Consolidated statement of comprehensive income
for the 26 weeks ended 27 June 2021 (unaudited)

The table below gives additional information to shareholders on key performance indicators:       

Consolidated statement of changes in equity
for the 26 weeks ended 27 June 2021 (unaudited)

In January 2021 Daniel Jonathan Plant was awarded 15,676,640 'B' shares in Tasty plc which can be converted to 'A' shares subject to achievement of certain hurdle rates. These 'B' shares were issued at nominal value of 0.00001 pence.

Consolidated balance sheet
At 27 June 2021 (unaudited)

Consolidated cash flow statement
for the 26 weeks ended 27 June 2021 (unaudited)