Half-year Report

Richoux Group plc

Interim results for the 28 weeks ended 9 July 2017

Richoux Group plc (the "Group"), the owner and operator of Richoux, Friendly Phil's and Villagio restaurants today announces its unaudited interim results for the 28 week period ending 9 July 2017.

Key points:

§ Turnover decreased 20.2% to £5.65 million

(2016: £7.08 million).

§ Loss after tax £1.12 million

(2016: £0.58 million).

§ Currently seventeen restaurants trading.

§ Cash of £4.73 million at period end.

(December 2016: £3.86 million).

This announcement contains inside information.

Results

Revenue for the 28 week period ended 9 July 2017 decreased 20.2% on the 28 week period ended 10 July 2016 to £5.65 million (2016: £7.08 million). Adjusted operating loss before pre-opening costs, impairment, reorganisation costs and onerous lease provision decreased to £0.73 million (2016: £0.63 million). Pre-opening costs for the period were £0.39 million (2016: £0.09 million). The net loss for the period was £1.12 million (2016: £0.58 million).

The Directors are not recommending the payment of a dividend.

Operations

The Group currently has seventeen operating restaurants, which operate under the Richoux, Friendly Phil's and Villagio brands. Further details on each of the brands are set out below.

During the first half, we have focused on improving our restaurant teams, food and premises, as well as laying the foundations for significant improvements in our digital capabilities. We have modernised our Richoux restaurants whilst staying true to our traditional heritage, and have rebranded our Dean's Diners into our new Friendly Phil's format.

We successfully disposed of three underperforming units during the period, and have disposed of a further two since the period end.

Richoux

Richoux is an all day cafe and brasserie established in London in 1909.

The Group has six Richoux restaurants - in Knightsbridge, Mayfair, Piccadilly, Gloucester Arcade, Port Solent and Chislehurst. The Port Solent and Chislehurst restaurants were previously Villagio restaurants and were converted into Richoux restaurants in February and March 2017 respectively. The restaurant in St John's Wood closed in May 2017 when the restaurant lease ended. The restaurants in Gloucester Arcade, Knightsbridge and Piccadilly were refurbished in May, June and July 2017 respectively.

Friendly Phil's

Friendly Phil's is a vintage American Diner.

The Group currently has six Friendly Phil's restaurants, in Hempstead Valley which opened in March 2017, Port Solent which opened in April 2017, Chatham which opened in May 2017, Braintree which opened in May 2017, Canterbury which opened in May 2017 and Fareham which opened in June 2017. These restaurants were previously Dean's Diner restaurants apart from Canterbury which was a Zintino restaurant.

The restaurant in Bicester was sold in January 2017, the lease for the restaurant in Orpington was surrendered in April 2017, the restaurant in Trowbridge was sold in September 2017 and the lease for the restaurant in Yate was surrendered in September 2017.

Italian restaurants

The Group currently has four Villagio restaurants in Andover, Basildon, Hammersmith, and Chatham. The restaurant in High Wycombe was sold at the end of January 2017.

The Group also has one Italian restaurant trading as Zippers Bar, Restaurant and Grill in Chatham.

Capital expenditure and cash flow

As at the end of the period under review the Group held cash of £4.73 million (December 2016: £3.86 million).

Capital expenditure of £3.71 million was incurred in the period; on the rebranding and refurbishment of the existing restaurants.

Outlook

Over the last six months we have continued to refresh our estate, and have focussed on restaurant design, food and service quality. We have experienced some growth in trade of the rebranded restaurants but, in line with the industry, not at the level we had hoped for and we currently see no consistent improvement in trading conditions from those prevailing when we last reported in April this year.

Simon Morgan

Chairman

28 September 2017

Richoux Group plc

Condensed consolidated statement of comprehensive income

for the 28 week period ended 9 July 2017

Richoux Group plc

Condensed consolidated statement of changes in equity

For the 28 week period ended 9 July 2017

Richoux Group plc

Condensed consolidated statement of financial position

at 9 July 2017

Richoux Group plc

Condensed consolidated statement of cash flows

for the 28 week period ended 9 July 2017

1. The consolidated financial statements have been prepared in compliance with International Financial Reporting Standards ("IFRS") as adopted by the European Union and therefore the Group financial statements comply with Article 4 of the EU IAS Regulation. The financial statements have been prepared on the historical cost basis.

2. The condensed financial information for the 28 week period ended 9 July 2017 and the 28 week period ended 10 July 2016 has been prepared in accordance with IAS 34 "Interim financial reporting" and should be read in conjunction with the annual financial statements for the period ended 25 December 2016 which have been prepared in accordance with International Financial Reporting Standards as adopted by the European Union. The accounting policies used in preparing the condensed financial information are consistent with those of the annual financial statements for the period ended 25 December 2016. During the period various Standards and Interpretations were adopted in line with the effective dates as outlined in the annual financial statements for the period ended 25 December 2016. The condensed financial information for the 28 week period ended 9 July 2017 and the 28 week period ended 10 July 2016 has not been audited or reviewed and does not constitute full financial statements within the meaning of section 435 of the Companies Act 2006.

The financial information for the 52 week period ended 25 December 2016 does not constitute the Group's statutory accounts for that period but it is derived from those accounts. Statutory accounts for the 52 week period ended 25 December 2016 have been delivered to the Registrar of Companies. The auditors have reported on these accounts; their report was unqualified and did not contain statements under section 498(2) or (3) of the Companies Act 2006.

3. Business segments

Based on the financial information which is monitored by the board, which comprises the chief operating decision maker as defined in IFRS 8, the group has three reportable business segments based around its core restaurant brands, Diners, Richoux and Italian restaurants. All brands are engaged in the restaurant trade so derive their revenues and results from similar products and services.

For the 28 week period ended 9 July 2017

The unallocated segment loss includes the cost of the restaurant area management, and the unallocated administrative expenses include the costs of the Group's head office.

4. Loss per share

The calculation of the basic and diluted loss per share is based on the following data:

5. No dividend is proposed.

6. Intangible fixed assets

Impairment testing of goodwill and intangible fixed assets

Goodwill of £264,000 (2016: £269,000) relates to the acquisition of Richoux Limited in August 2000 and is allocated to the group of cash generating units (CGUs) that comprise the business acquired with each restaurant site being treated as a single CGU.

The Group tests annually for impairment or more frequently if there are indications that the goodwill and intangible assets may be impaired. The recoverable amounts of the restaurants are calculated from value in use calculations based on cash flow projections from forecasts to December 2022 based on a sales growth rate of 2 per cent for established sites. The discount rate applied to cash flow projections is 10 per cent.

The Board has concluded that at this time no impairment provision is required (December 2016: £4,000).

7. Property, plant and equipment

Impairment testing of property, plant and equipment

The Group considers each trading restaurant to be a cash-generating unit (CGU) and each CGU is reviewed when there are indications of impairment.

The recoverable amounts of the restaurants are calculated from value in use calculations based on cash flow projections from forecasts to December 2022 based on a sales growth rate of 2 per cent for established sites. The discount rate applied to cash flow projections is 10 per cent.

The Board has concluded that at this time no impairment provision is required (December 2016: £5,039,000).

8. Reconciliation of operating loss to operating cash flows

9. Related party transactions

Transactions with directors:

Directors' emoluments

During the period Salvatore Diliberto subscribed for 5,273,375 (includes 2,636,687 subscribed for by his wife Irene Diliberto) ordinary shares (2016: 1,054,394), The Hon. Robert Rayne subscribed for 4,103,838 ordinary shares (2016: 1,054,394), Jonathan Kaye subscribed for 3,125,000 ordinary shares (2016: 1,354,395), Simon Morgan subscribed for 125,000 ordinary shares (2016: nil) and Mehdi Gashi subscribed for nil ordinary shares (2016: 400,000) as part of the subscription that took place during the period. The price paid per share was 16 pence.

Transactions with substantial shareholders:

During the period Phillip Kaye subscribed for 3,121,025 ordinary shares (2016: 451,465), Samuel Kaye subscribed for 1,250,000 ordinary shares (2016: 451,465), Adam Kaye subscribed for 1,250,000 ordinary shares (2016: 451,465) and Michinoko Limited subscribed for 4,216,750 ordinary shares (2016: 1,054,394) as part of the subscription that took place during the period. The price paid per share was 16 pence.

10. Post balance sheet events

On 4 September 2017 the Group disposed of its restaurant in Trowbridge for £50,000 (before costs), on 12 September 2017 the Group entered into a new 10 year lease for a new office in Tilehurst at a rent of £13,650 per annum, and on 20 September 2017 the Group surrendered the lease for its restaurant in Yate for a reverse premium of £99,808 (before costs).

11. Report and accounts

Copies of the interim report and accounts will be available at www.richouxgroup.co.uk.

- ENDS -