7th Feb 2006 07:02
Regent Inns PLC07 February 2006 7 February 2006 PRESS RELEASE Regent Inns PLC Interim results for 26 weeks ended 31 December 2005 Regent Inns plc ("Regent" or the "Company") is an operator of late night,entertainment-led bars in the UK. Its core brands are Walkabout and Bar Risa /Jongleurs. The Company is reporting its results under IFRS for the first time. Financial highlights: Total Company: • Operating profit more than doubled to £8.2m (2005: £3.8m) • Profit before tax of £5.2m (2005: £0.9m) • Basic earnings per share of 2.9p (2005: 0.5p) • No interim dividend as focus on reducing net debt Continuing operations: • EBITDA of £13.5m up 2% (2005: £13.3m) and EBITDA margin increased to 20.5% (2005: 19.8%) • Profit before tax up 12% to £6.4m (2005 pre-exceptional: £5.7m) • Basic earnings per share before exceptionals up 3% to 3.7p (2005: 3.6p) • As a result of disposals and closures, turnover down 2% to £65.8m (2005: £67.2m) Corporate progress: • Agreement on five year replacement debt facilities of £100m with four leading banks • Opening of Walkabout Putney in December and trading well • Appointment of John Laurie as Non-Executive Director in December 2005; Nigel Batchelor stepped down as Non-Executive Director in November 2005 • Of the five unbranded pubs for disposal, two sold and one under offer • Continuing to review and pursue value-enhancing market consolidation opportunities Commenting, Bob Ivell, Executive Chairman of Regent, said: "I am pleased to report the results for the 26 weeks ended 31 December 2005.This has been a busy period for the Group and significant progress has beenachieved. "Our main focus has been implementing changes ahead of and as a result of thelicensing reform which took effect on 24 November 2005. The Group adopted anextremely diligent approach towards controlling operations during thetransitional period leading up to the granting of new licenses and the initialperiod following the reforms. As a result, our trading performance was affectedduring the period. "As a responsible operator, we have been anxious to minimise our compliancerisks and ensure good relationships with the Police and licensing authoritieseven if this has a short-term cost implication as we believe that this is in thebest long-term interests of the business. "Walkabout and Jongleurs remain strong, cash-generative and well recognisedbrands on the High Street situated in excellent locations in major towns andcities. "The Board continues to seek value-enhancing consolidation opportunities andremains confident of the Group's long-term prospects." - Ends - Enquiries: Regent Inns PLC 020 8375 3000Bob Ivell, Executive Chairman (for press)John Leslie, Chief Financial Officer (for analysts) Merlin 020 7653 6620Paul DownesVanessa Maydon 07802 961 902 (mobile)Rebecca Penney 07795 108 178 (mobile) Photography: High resolution images are available for the media to view anddownload free of charge from www.vismedia.co.uk CHAIRMAN'S STATEMENT Summary I am pleased to report the results for the 26 weeks ended 31 December 2005.This has been a busy period for the Group and significant progress has beenachieved in the following areas: - Successful refinancing of the business with a five year £100m bank debt facility at half the interest margin of the previous facility- Significant refurbishment and maintenance capital expenditure across the branded estate focused on improvements to customer environment- Review and active pursuit of a number of market consolidation opportunities including Urbium and Inventive Leisure- Comprehensive review of the Bar Risa business completed with a modest capital investment towards the end of the period in two of the sites. Our main focus, however, has been on implementing changes ahead of and as aresult of the licensing reform which took effect on 24 November 2005. Theactions which we have taken are explained more fully in the operational reviewsection below. The Group adopted an extremely diligent approach in controllingoperations during the transitional period leading up to the granting of newlicences and the initial period following the reforms. As a result, our tradingperformance was affected during the period. As a responsible operator, we areanxious to minimise our compliance risks and ensure good relationships with thePolice and licensing authorities even if this has a short-term cost implication,as we believe that this policy is in the best long-term interests of thebusiness. Consequently, the good start to the year, which saw like-for-like sales for thebranded estate for the first 20 weeks, up 1.1% as announced at the AGM, was notmaintained for the remainder of the period. Trading conditions for High Streetbars during November and early December were tough, as reported by otheroperators. However, there was an uplift in sales immediately before Christmasresulting in like-for-like sales for the branded estate of 0.5% above last yearfor the first half as a whole. Results The 26 week trading period ended 31 December 2005 is the first accounting periodin relation to which the Group has prepared its results under InternationalFinancial Reporting Standards (IFRS). On 25 January 2006, the Group released anannouncement detailing the impact of IFRS on the comparative accounting periodincluding the 26 weeks ended 1 January 2005. The full announcement is availableon the Group's website www.regentinns.co.uk. Continuing operationsSales decreased by 2.1% to £65.8m (2005: £67.2m) primarily due to disposals andclosures, including the sale of Stonehouse Hampton Hill in September 2005.However, operating profit almost doubled to £8.5m (2005: £4.3m) due to theabsence of exceptional costs. In the first half last year, exceptional costsamounted to £4.3m (renegotiation of banking facilities £1.9m, reorganisation ofthe business £1.6m, and a write-off of abortive site acquisition costs £0.8m).After adding back last year's exceptional costs, operating profit was £0.1m lessthan last year. This small reduction in operating profit was despite a 0.5%improvement in liquor margin and the Group reaping the full benefit (£0.8m inthe half year) of the restructuring of central overheads undertaken in thesecond half of last year. However, these improvements were offset by increasesin some operational costs, particularly in door security, licensing, utilitiesand labour. Profit before tax was £6.4m, up £0.7m on last year (after adding back lastyear's exceptional costs) due to interest savings arising from lower net debtand a £0.4m benefit derived from the 'mark to market' valuation movement ininterest rate swaps following the adoption of IAS 39 as at 3 July 2005 - thebeginning of the current financial year. The effective tax rate on continuing operations of 34.6%, which includes fullprovision for deferred tax, is based on our estimated rate for the full year.This is higher than last year's rate for the full year of 33.1%. However, thecash tax rate (for the total business) of 25.8 % remains below the UKcorporation tax rate of 30%. Earnings per share for continuing operations before exceptionals was 3.7 pence,up 0.1 pence. Discontinued operationsSales from discontinued operations were £1.1m, down £0.5m on last year due tothe reduced number of venues falling into this category as the greater part ofour disposal programme has been completed. Post-tax trading losses from thesevenues were £0.2m, an improvement of £0.1m on last year. Disposal costs (post tax), including adjustments to book values and additionalprovisions in respect of the remaining properties in this category, amounted to£0.8m (2005: £nil). Total post-tax loss from discontinued operations was £1.0m (2005: £0.3m) Total operationsEarnings per share for total operations was 2.9 pence (2005: 0.5 pence). Pre-exceptional earnings before interest, tax, depreciation and amortisation(EBITDA) were £13.2m (2005: £12.9m). Cash flow generated from operating activities amounted to £11.6m (2005: £12.7m),which was utilised to make net interest payments of £3.6m (2005: £2.8m), netcapital expenditure of £6.3m (2005: £4.4m), and net debt repayments of £1.2m(2005: £8.4m). Cash interest payments were higher than last year despite thesignificant reduction in interest charge because of the repayment of accruedinterest at the time of refinancing the bank debt facility. Gross capital expenditure of £6.6m included £0.9m for the acquisition andfit-out of Walkabout Putney. The balance of £5.7m primarily related torefurbishment and maintenance projects with the programme being skewed heavilyto the first half. Several other cash outflows of a one-off nature havesuppressed the reduction in net debt in the period. These include theacquisition and development of Walkabout Putney, payment of all accrued intereston outstanding loans at the time of refinancing the bank debt facility (£0.8mabove last year's payments), and fees of £1.1m in connection with therefinancing and a lease surrender payment of £0.5m. Nevertheless, since 2 July2005, net bank debt has been reduced by £1.2m to £57.4m. At 31 December 2005, the Company had available a further £30.7m of undrawnfacilities, providing flexibility for significant expansion. At 31 December 2005, the net bank debt to EBITDA ratio was 2.1 times (2005: 2.4times). For the 26 week period to 31 December 2005, net interest was covered byEBITDA 6.6 times (2005: 4.6 times) and fixed charges were covered by EBITDA 2.5times (2005: 2.1 times). Operational review Walkabout and Jongleurs remain strong, well-recognised High Street brands andare situated in excellent locations in major towns and cities. Trading in the first quarter of the year continued the trends seen for most ofthe second half last year with Walkabout achieving good growth and JongleursComedy Clubs performing steadily. A number of the larger Bar Risa feeder bars,however, continued to perform less well as a result of intense localcompetition. A comprehensive review of the Bar Risa business was completed during the period.As part of the review, the music policy at Bar Risa has been repositioned tofocus more on female customers and we have just relaunched Bar Risa's foodoffering. Minor refurbishments were carried out at the Birmingham and Cardiffsites costing less than £100k each, and two further low-cost refurbishments willbe completed at the Reading and Leeds sites in the second half of the financialyear. During the late summer, Walkabout benefited from the country's obsession withthe Ashes cricket tests which provided a welcome boost to day-time business.However, trading weakened across the Walkabout business from mid-October and didnot recover until immediately before and during Christmas. The weaker trading period in the second quarter and the different pattern ofsales over Christmas have made it difficult to determine the precise impact oflicensing deregulation. During this period, however, to minimise our compliancerisks and ensure good relationships with the Police and licensing authorities,we implemented a number of changes including: - Voluntary trading restrictions at certain major venues in advance of licence hearings,- Reduction in venue capacity and trading hours in particular at Walkabout Bournemouth and Bar Risa / Jongleurs Cardiff- Substantial increases in door security- Introduction of polycarbonate drinking vessels (i.e. plastic glasses and bottles) Also, certain local authorities imposed conditions in connection with newlicences, including increased door security and the use of polycarbonates, whichhave been both costly to implement and have affected trade. There is no doubt that our self-imposed restrictions during the transitionalperiod of licensing reform, the additional restrictions of some of the newlicences and our extremely cautious approach post-deregulation have depressedrevenue during the period. We believe that our cautious approach has been in the best long-term interestsof the business as we are intent on demonstrating that our venues are wellcontrolled and managed. Our aim, in due course, is to secure licence extensionsand to improve trading. We are continuing to keep the trends specific to eachvenue under close scrutiny to ensure that we maximise revenue and minimisecosts. We were delighted to open our first Walkabout since June 2004, when we acquiredand developed the former Litten Tree in Putney. We secured planning permissionand mobilised contractors to complete the fit-out in time for Christmas trading.Early indications are that this unit will deliver a good return on ourinvestment. Jongleurs Comedy Clubs remain a unique entertainment format and continued toperform steadily throughout the first half. In particular, this business tradedstrongly during December when we held 25 more shows relative to the same periodlast year. Ticket prices were reduced to ensure that venues operated atcapacity and our 'Value For Money' feedback ratings improved significantly beingthe highest achieved for four years. Further improvements were made to our packaged product range with theintroduction of Hoegarden, Leffe, WKD Blue and premium spirits such as Absolutand Bombay Sapphire. Our ambition to provide the best product range in themarket will be further strengthened during the coming months as we make furtherchanges to our draught beers range including the introduction of super-chilledproducts. Refurbishment capital expenditure of £5.7m was invested in the first half of theyear, the majority of which was focused on improvements to the customerenvironment such as toilets, furniture and audio-visual equipment. Significantspend has also been incurred on upgrading dance-floors utilising harder-wearingmaterials that will not be as costly to maintain and clean. Over half of allunits have benefited from significant investment and we have seen a resultantimprovement in the overall scores achieved on our mystery visitor programme from79% to 82%. At the beginning of the period under review, there were five properties in thediscontinued operations category. As at the date of this announcement, two ofthese properties have been sold and one is under offer. The other twoproperties continue to be marketed. Dividend The Board has decided not to recommend an interim dividend as it continues tobelieve that there a number of opportunities, including reducing debt, whichwill create better returns for shareholders. Board changes Nigel Batchelor, Non-Executive Director and Chairman of the Audit Committee anda member of the Remuneration & Appointments Committee, stepped down from theBoard on 22 November 2005. We would like to thank him for his contribution tothe Company. John Laurie was appointed to the Board as a Non-Executive Director on 1 December2005. John has held senior positions at Scottish & Newcastle plc during acareer of over 30 years with the group, latterly as Group Financial ServicesDirector. He will chair the Audit Committee and sit on the Remuneration &Appointments Committee. Current trading and prospects Whilst there has been some evidence of a change in trading patterns attributableto licensing reforms, trading conditions on the High Street have remaineddifficult since the beginning of the New Year. However, Walkabout and Jongleursremain strong, cash generative and well-run brands. Walkabout is well positioned to benefit from sporting events in the second halfincluding the Six Nations, Commonwealth Games and the Football World Cup. Inaddition, we expect to see further benefits as we start to relax many of ourself-imposed trading restrictions and enjoy the results of the improvements toour beer range and service delivery quality. The Board continues to seek value-enhancing consolidation opportunities andremains confident of the Group's long-term prospects. Bob IvellExecutive Chairman7 February 2006 CONSOLIDATED INCOME STATEMENTfor the twenty six weeks ended 31 December 2005 Unaudited Unaudited Unaudited (restated) (restated) 26 weeks ended 26 weeks ended 52 weeks ended 31 December 2005 1 January 2005 2 July 2005 Notes £'000 £'000 £'000 Continuing operationsRevenue 65,816 67,229 131,272Operating costs 2 (57,316) (62,902) (119,069)----------------------- ------ ------------ ----------- ----------- ------------ ----------- -----------Operating profit before 8,500 8,618 16,494exceptional itemsExceptional items 3 - (4,291) (4,291) ------------ ----------- ----------- ----------------------- ------ ------------ ----------- ----------- Operating profit 8,500 4,327 12,203 Interest payable and 4 (2,592) (2,969) (5,852)similar chargesInterest receivable 4 525 57 149----------------------- ------ ------------ ----------- -----------Profit before taxation 6,433 1,415 6,500 Taxation 5 (2,225) (463) (164)----------------------- ------ ------------ ----------- ----------- Profit from continuing 4,208 952 6,336operations Discontinuedoperations ------------ ----------- -----------Loss on trading 6 (210) (349) (728)activitiesLoss on sale of fixed 6 (760) - (160)assets ------------ ----------- -----------Loss from discontinued 6 (970) (349) (888)operations ----------------------- ------ ------------ ----------- -----------Profit for the period 3,238 603 5,448attributable to equity ====== ============ =========== ===========shareholders======================= Earnings per share - basic 8 2.9p 0.5p 4.9p ------------ ----------- ----------- - diluted 8 2.8p 0.5p 4.8p ------------ ----------- ----------- CONSOLIDATED BALANCE SHEETas at 31 December 2005 Unaudited Unaudited Unaudited (restated) (restated) 31 December 1 January 2 July 2005 2005 2005 £'000 £'000 £'000 AssetsNon-current assetsGoodwill 6,776 6,776 6,776Property, plant and 151,211 151,870 150,931equipmentOther non-current assets 2,576 3,400 2,647-------------------------- ------ ----------- --------- --------- 160,563 162,046 160,354Current assetsInventories 2,267 2,199 1,548Trade and other receivables 7,408 7,047 5,915Cash and cash equivalents 2,608 8,055 4,654-------------------------- ------ ----------- --------- --------- 12,283 17,301 12,117Assets held for sale 210 327 210-------------------------- ------ ----------- --------- --------- 12,493 17,628 12,327Current liabilitiesFinancial liabilitiesBorrowings (2,725) (9,100) (63,196)Interest rate swaps (304) - -Trade and other payables (16,097) (20,584) (16,803)Current tax liabilities (1,797) (1,510) (443)-------------------------- ------ ----------- --------- --------- (20,923) (31,194) (80,442) -------------------------- ------ ----------- --------- --------- Net current liabilities (8,430) (13,566) (68,115)-------------------------- ------ ----------- --------- --------- Total assets less current 152,133 148,480 92,239liabilities Non-current liabilitiesFinancial liabilitiesBorrowings (56,265) (61,646) -Interest rate swaps (569) - -Unsecured convertible loan (6,000) (6,000) (6,000)notesDeferred tax liabilities (20,070) (19,354) (19,805)Other non-current (2,140) (2,229) (2,184)liabilitiesProvisions (3,129) (3,400) (3,292)-------------------------- ------ ----------- --------- --------- (88,173) (92,629) (31,281) -------------------------- ------ ----------- --------- --------- Net assets 63,960 55,851 60,958========================== ====== =========== ========= ========= Capital and reservesCalled up share capital 9 5,664 5,615 5,625Share premium account 9 50,576 49,951 50,080Capital reserve - own 9 (322) (322) (322)sharesEquity reserve 9 441 185 308Profit and loss account 9 7,601 422 5,267-------------------------- ------ ----------- --------- --------- Total shareholders' equity 63,960 55,851 60,958========================== ====== =========== ========= ========= CONSOLIDATED CASH FLOW STATEMENTfor the twenty six weeks ended 31 December 2005 Unaudited Unaudited Unaudited (restated) (restated) 26 weeks 26 weeks 52 weeks ended ended ended 31 December 1 January 2 July 2005 2005 2005 Notes £'000 £'000 £'000 Cash flows from operatingactivitiesCash generated from 10 11,641 12,733 22,664operationsInterest received 106 57 306Interest paid (3,710) (2,899) (5,836)Tax received - 2,949 2,792--------------------------- ------- ----------- --------- -------- Net cash from operating 8,037 12,840 19,926activities ------- ----------- --------- ----------------------------------- Cash flows from investingactivitiesProceeds from sale of 326 - 1,168property, plant andequipmentPurchase of property, plant (6,648) (4,398) (8,642)and equipment ------- ----------- --------- ----------------------------------- Net cash used in investing (6,322) (4,398) (7,474)activities ------- ----------- --------- ----------------------------------- Cash flows from financingactivities Net proceeds from issue of 535 - 139ordinary share capitalNet proceeds from issue of 60,000 450 -new bank loanRepayment of borrowings (63,196) - (7,100)New bank facility fees (1,100) - ---------------------------- ------- ----------- --------- -------- Net cash used in financing (3,761) 450 (6,961)activities ------- ----------- --------- ----------------------------------- Net (decrease)/increase in 11 (2,046) 8,892 5,491cash and cash equivalents ======= =========== ========= =================================== NOTES TO THE FINANCIAL STATEMENTSfor the twenty six weeks ended 31 December 2005 1. Basis of Preparation The Group has previously prepared its financial statements under UK GenerallyAccepted Accounting Principles, (UK GAAP). Following a directive by the EuropeanParliament in July 2002, the Group is required to prepare its 2005/6consolidated financial statements in accordance with International FinancialReporting Standards as adopted by the European Union (IFRS). Accordingly this interim report has been prepared using IFRS accounting policiesconsistent with those management expect to apply in the Group's first IFRSAnnual Report and Financial Statements for the 52 weeks ending 1 July 2006. Theaccounting policies followed in the interim report are the same as thosepublished within the financial performance section of the Company's website,www.regentinns.co.uk. The interim report has been prepared in accordance withthe Listing Rules of the Financial Services Authority. Exceptional items are defined as material items which arise from events ortransactions which fall within the ordinary activities of the group and whichindividually, or, if of similar type, in aggregate, need to be disclosed byvirtue of their size or incidence. IFRS currently in issue are subject to ongoing review and endorsement by theEuropean Commission as well as possible amendment by the IASB, and therefore aresubject to possible change. Further standards or interpretations may also beissued that could be applicable for the full year consolidated financialstatements. These potential changes could result in change to the basis ofaccounting or presentation of certain financial information from that presentedin this document. The interim report for the twenty-six weeks ended 31 December 2005 does notconstitute statutory financial statements as defined in section 240 of theCompanies Act 2005 and has not been delivered to the Registrar of Companies.Comparative annual figures for the year ended 2 July 2005 set out within thisreport have been extracted from "Impact of Adoption of International FinancialReporting Standards" as published by the Group on 25 January 2006, which isavailable on the Company's website. Statutory consolidated financial statements for the Group for the 52 weeks ended2 July 2005, prepared in accordance with UK GAAP, on which the auditors gave anunqualified opinion, have been filed with the Registrar of Companies. 2. Operating costs Unaudited Unaudited Unaudited (restated) (restated) 26 weeks ended 26 weeks ended 52 weeks ended 31 December 2005 1 January 2005 2 July 2005 Total Total Total £'000 £'000 £'000 Cost of sales (14,579) (15,504) (30,687) Administration costsOperating expenses (34,438) (34,421) (66,973)Depreciation (5,039) (4,730) (9,560)Head office expenses (3,133) (3,912) (7,436)Exceptionals - (4,291) (4,291)Share-based payments (133) (77) (204) Profit on sale of fixed - - 57assets Other operating income 6 33 25-------------------------- ------------ ----------- ----------- (57,316) (62,902) (119,069) ========================== ============ =========== =========== 3. Exceptional items Unaudited Unaudited Unaudited (restated) (restated) 26 weeks ended 26 weeks ended 52 weeks ended 31 December 2005 1 January 2005 2 July 2005 £'000 £'000 £'000 Bank facility restructuring - (1,858) (1,853)costsHead office restructuring - (1,633) (1,617)costsAborted acquisition costs - (800) (821)-------------------------- ------------ ----------- ----------- - (4,291) (4,291) ========================== ============ =========== =========== 4. Finance costs Unaudited Unaudited Unaudited (restated) (restated) 26 weeks ended 26 weeks ended 52 weeks ended 31 December 2005 1 January 2005 2 July 2005 £'000 £'000 £'000 Interest payable on bank (2,252) (2,722) (5,329)borrowingsAmortisation of issue costs (90) - -of bank loanInterest payable on loan (209) (205) (409)notesOther interest payable (41) (42) (114)-------------------------- ------------ ----------- ------------Finance costs (2,592) (2,969) (5,852)-------------------------- ------------ ----------- ------------ Interest income 106 57 149Gains arising on interest 419 - -rate swaps ------------ ----------- --------------------------------------Interest receivable 525 57 149-------------------------- ------------ ----------- ------------ 5. Taxation The taxation charge for the twenty-six weeks ended 31 December 2005 iscalculated by applying the estimated effective tax rate for the year ended 1July 2006. Unaudited Unaudited Unaudited (restated) (restated) 26 weeks ended 26 weeks ended 52 weeks ended 31 December 2005 1 January 2005 2 July 2005 Total Total Total £'000 £'000 £'000 Current tax- Continuing operations (1,572) (310) 437- Discontinued operations 218 149 312-------------------------- ------------ ----------- ------------ (1,354) (161) 749 -------------------------- ------------ ----------- ------------ Deferred tax- Continuing operations (653) (153) (601)- Discontinued operations - - --------------------------- ------------ ----------- ------------ (653) (153) (601) -------------------------- ------------ ----------- ------------ Taxation (2,007) (314) 148========================== ============ =========== ============ 6. Discontinued operations Unaudited Unaudited Unaudited (restated) (restated) 26 weeks ended 26 weeks ended 52 weeks ended 31 December 2005 1 January 2005 2 July 2005 £'000 £'000 £'000 Revenue 1,052 1,637 2,975Expenses (1,352) (2,135) (4,015)-------------------------- ------------ ----------- ------------Loss before tax (300) (498) (1,040)Attributable tax credits 90 149 312-------------------------- ------------ ----------- ------------Post tax results from (210) (349) (728)discontinued operations ------------ ----------- ------------Loss on sale of fixed (888) - (160)assetsAttributable tax credits 128 - - ------------ ----------- ------------Post tax loss on sale of (760) - (160)fixed asssets ========================== ============ =========== ============Net loss attributable to (970) (349) (888)discontinued operations ========================== ============ =========== ============ 7. Dividends The directors do not propose an interim dividend (2005 - nil p per share). 8. Earnings per share Earnings per share have been calculated using the weighted average number ofshares in issue during the relevant financial periods. The weighted averagenumber of shares in issue is 112,508,870 (2005 - 111,741,206) and the earnings,being profit on ordinary activities after taxation, are £3,238,000 (2005 -£603,000). Diluted earnings per share have been calculated using the weighted averagenumber of shares in issue diluted for the effect of share options andconvertible loan stock, where the option price or conversion rate has a dilutingeffect. The diluted weighted average number of shares is 114,419,145 (2005 -111,986,963). Earnings per share before exceptional items, excludes exceptional losses of £nil(2005 - £4,291,000) with a taxation credit thereon of £nil (2005 - £1,166,000). Earnings per share from continuing operations before exceptional items excludesexceptional losses of £nil (2005 - £4,291,000) together with a taxation credit thereon of £nil(£1,166,000) and losses from discontinued operations of £970,000 (2005 -£349,000). Unaudited Unaudited Unaudited (restated) (restated) 26 weeks ended 26 weeks ended 52 weeks ended 31 December 2005 1 January 2005 2 July 2005 Earnings per share beforeexceptional items - basic 2.9p 3.3p 7.7p ------------ ----------- ----------- - diluted 2.8p 3.3p 7.6p ------------ ----------- ----------- Earnings per share fromcontinuing operationsbefore exceptional items - basic 3.7p 3.6p 8.5p ------------ ----------- ----------- - diluted 3.7p 3.6p 8.4p ------------ ----------- ----------- 9. Statement of changes in shareholders' equity Unaudited Share Share Capital Equity Profit & loss Total Capital Premium Reserve Reserve account £'000 £'000 £'000 £'000 £'000 £'000At 3 July 2004 5,615 49,951 (322) 108 (181) 55,171Profit for the - - - - 603 603periodShare-based payment - - - 77 - 77expense -------------------- ------- -------- ------- ------- -------- --------At 1 January 2005 5,615 49,951 (322) 185 422 55,851Ordinary shares 10 129 - - - 139issuedProfit for the - - - - 4,845 4,845periodShare-based payment - - - 127 - 127expenseExcess tax relief on - - - (4) - (4)share-based payments-------------------- ------- -------- ------- ------- -------- --------At 2 July 2005 5,625 50,080 (322) 308 5,267 60,958Adjustment for - - - - (904) (904)implementation of IAS 39-------------------- ------- -------- ------- ------- -------- --------Restated brought 5,625 50,080 (322) 308 4,363 60,054forward at 3 July2005Ordinary shares 39 496 - - - 535issuedProfit for the - - - - 3,238 3,238periodShare-based payment - - - 133 - 133expense -------------------- ------- -------- ------- ------- -------- -------- At 31 December 5,664 50,576 (322) 441 7,601 63,9602005 ==================== ======= ======== ======= ======= ======== ======== 10. Cash generated from operations Unaudited Unaudited Unaudited (restated) (restated) 26 weeks ended 26 weeks ended 52 weeks ended 31 December 2005 1 January 2005 2 July 2005 £'000 £'000 £'000 Continuing operationsNet profit 4,208 952 6,336Adjustment for:Tax 2,225 463 164Depreciation 5,039 4,730 9,560Profit on disposal of - - (57)property, plant andequipmentNon-cash exceptional items - 800 821Cash exceptional items - 1,893 3,351Interest income (525) (57) (149)Interest expense 2,592 2,969 5,852Share-based payment expense 133 77 204Lease premiums 71 71 143------------------------- ------------- ----------- ----------- 13,743 11,898 26,225Changes in working capital(Increase)/ decrease in (719) (174) 477inventories(Increase)/decrease in trade (1,493) (1,083) 18and other receivablesIncrease in trade and other 673 3,122 965payables ------------------------- ------------- ----------- ----------- 12,204 13,763 27,685 Cashflows resulting from (263) (532) (3,981)prior year exceptionals ------------------------- ------------- ----------- ----------- Cash generated from 11,941 13,231 23,704continuing operations ------------------------- ------------- ----------- ----------- Unaudited Unaudited Unaudited (restated) (restated) 26 weeks ended 26 weeks ended 52 weeks ended 31 December 2005 1 January 2005 2 July 2005 £'000 £'000 £'000 Discontinued operationsNet loss (970) (349) (888)Taxation (218) (149) (312)Loss on disposal of property, 888 - 160plant and equipment ------------------------- ------------- ----------- ----------- Cash flow from discontinued (300) (498) (1,040)operations ------------------------- ------------- ----------- ----------- Cash generated from 11,641 12,733 22,664operations ========================= ============= =========== =========== 11. Reconciliation of net cash flow to movement in net debt Unaudited Unaudited Unaudited (restated) (restated) 26 weeks ended 26 weeks ended 52 weeks ended 31 December 2005 1 January 2005 2 July 2005 £'000 £'000 £'000 (Decrease)/increase in cash (2,046) 8,892 5,491in the periodCash (outflow)/inflow from 3,196 (450) 7,100(repayment)/increase in loans------------------------- ------------- ----------- ----------- Reduction in net debt 1,150 8,442 12,591resulting from cashflowsOther non cash changes 1,010 - -Net debt at beginning of (64,542) (77,133) (77,133)period ------------------------- ------------- ----------- ----------- Net debt at end of period (62,382) (68,691) (64,542)========================= ============= =========== =========== 12. Reconciliation of profit and net assets under UK GAAP to IFRS The Group's annual financial statements for the 52 weeks ended 2 July 2005 andits interim financial statements for the twenty-six weeks ended 1 January 2005were previously reported under UK GAAP. The total below reconciles profit aspreviously reported under UK GAAP to profit now reported under IFRS. Inaddition, there is a reconciliation of net assets under UK GAAP to IFRS as atthe Group's transition date, being 3 July 2004. A full explanation of theseadjustments was provided in 'Impact of the adoption of International FinancialReporting Standards' published by the Company on 25 January 2006 and isavailable on the Company's website. (i) Reconciliation of Consolidated Income Statement for the year ended 2 July2005 Unaudited Unaudited UK GAAP Adjustment Profit/(loss) IFRS IFRS for discontinued on sale of adjustments operations fixed assets £'000 £'000 £'000 £'000 £'000ContinuingoperationsRevenue 134,247 (2,975) - - 131,272-------------- -------- ----------- --------- --------- --------Operating costs(includingexceptionalsand goodwillamortisation) (123,043) 4,015 57 (98) (119,069) -------------- -------- ----------- --------- --------- -------- -------- ----------- --------- --------- --------Operatingprofit beforeexceptionalsand goodwillamortisation 15,926 1,040 57 (529) 16,494Exceptional (4,291) - - - (4,291)itemsGoodwill (431) - - 431 -amortisation -------- ----------- --------- --------- -------- -------------- -------- ----------- --------- --------- --------Operating 11,204 1,040 57 (98) 12,203profitProfit/(loss) (103) 160 (57) - -on sale offixed assetsInterest (5,852) - - - (5,852)payable andsimilarchargesInterest 149 - - - 149receivable -------------- -------- ----------- --------- --------- --------Profit before 5,398 1,200 - (98) 6,500taxationTaxation (520) (312) - 668 (164)-------------- -------- ----------- --------- --------- --------Profit from 4,878 888 - 570 6,336continuing operations -------- ----------- --------- --------- --------Loss on trading - (728) - - (728)activitiesLoss on sale of - (160) - - (160)fixed assets -------- ----------- --------- --------- --------Loss from - (888) - - (888)discontinued operations============== ======== =========== ========= ========= ========Profit for theperiodattributable toequityshareholders 4,878 - - 570 5,448 ============== ======== =========== ========= ========= ======== (ii) Consolidated Balance Sheet at 2 July 2005 Unaudited Unaudited UK GAAP Reclassification IFRS IFRS of detail to adjustments accord with IFRS £'000 £'000 £'000 £'000AssetsNon-current assetsGoodwill - 6,499 277 6,776Intangible assets 6,499 (6,499) - -Property, plant and 153,721 - (2,790) 150,931equipmentOther non-current - - 2,647 2,647assets ----------------------- -------- --------- --------- -------- 160,220 - 134 160,354Current assetsInventories 1,548 - - 1,548Trade and other 5,772 - 143 5,915receivablesCash and cash 4,654 - - 4,654equivalents ----------------------- -------- --------- --------- -------- 11,974 - 143 12,117Assets held for sale 210 - - 210----------------------- -------- --------- --------- -------- 12,184 - 143 12,327Current liabilitiesFinancial liabiltiesBorrowings - (63,196) - (63,196)Trade and other (81,255) 63,639 813 (16,803)payablesCurrent tax - (443) - (443)liabilitiesProvisions - - - ------------------------ -------- --------- --------- -------- (81,255) - 813 (80,442) ----------------------- -------- --------- --------- -------- Net current (69,071) - 956 (68,115)liabilities ----------------------- -------- --------- --------- -------- Total assets less 91,149 - 1,090 92,239current liabilities Non-currentliabilitiesFinancial liabiltiesBorrowings - - - -Unsecured loan notes (6,000) - - (6,000)Deferred tax - (16,799) (3,006) (19,805)liabilitiesOther non-current - - (2,184) (2,184)liabilitiesProvisions (20,091) 16,799 - (3,292)----------------------- -------- --------- --------- -------- (26,091) - (5,190) (31,281) ----------------------- -------- --------- --------- -------- Net assets 65,058 - (4,100) 60,958======================= ======== ========= ========= ======== Capital and reservesCalled up share 5,625 - - 5,625capitalShare premium account 50,080 - - 50,080Capital reserve - own (322) - - (322)sharesEquity reserve - - 308 308Profit and loss 9,675 - (4,408) 5,267account ----------------------- -------- --------- --------- -------- Total shareholders' 65,058 - (4,100) 60,958equity ======================= ======== ========= ========= ======== (iii) Reconciliation of Consolidated Income Statement for the twenty-six weeksended 1 January 2005 Unaudited Unaudited UK GAAP Adjustment Profit/(loss) IFRS IFRS for discontinued on sale of adjustments operations fixed assets £'000 £'000 £'000 £'000 £'000ContinuingoperationsRevenue 68,097 (868) - - 67,229-------------- -------- ----------- --------- --------- --------Operating costs(includingexceptionalsand goodwillamortisation) (64,242) 1,366 - (26) (62,902) -------------- -------- ----------- --------- --------- -------- -------- ----------- --------- --------- --------Operatingprofit beforeexceptionalsand goodwillamortisation 8,360 498 - (240) 8,618Exceptional (4,291) - - - (4,291)itemsGoodwill (214) - - 214 -amortisation -------- ----------- --------- --------- -------- -------------- -------- ----------- --------- --------- --------Operating 3,855 498 - (26) 4,327profitProfit/(loss) - - - - -on sale offixed assetsInterest (2,969) - - - (2,969)payable andsimilarchargesInterest 57 - - - 57receivable -------------- -------- ----------- --------- --------- --------Profit before 943 498 - (26) 1,415taxationTaxation (391) (149) - 77 (463)-------------- -------- ----------- --------- --------- --------Profit from 552 349 - 51 952continuing operations -------- ----------- --------- --------- -------- Loss on trading - (349) - - (349)activitiesLoss on sale of - - - - -fixed assets -------- ----------- --------- --------- --------Loss from - (349) - - (349)discontinued operations============== ======== =========== ========= ========= ========Profit for theperiodattributable toequityshareholders 552 - - 51 603 ============== ======== =========== ========= ========= ======== (iv) Consolidated Balance Sheet at 1 January 2005 Unaudited Unaudited UK GAAP Reclassification IFRS IFRS of detail to adjustments accord with IFRS £'000 £'000 £'000 £'000AssetsNon-current assetsGoodwill - 6,716 60 6,776Intangible assets 6,716 (6,716) - -Property, plant and 155,444 - (3,574) 151,870equipmentOther non-current - - 3,400 3,400assets ----------------------- -------- --------- --------- -------- 162,160 - (114) 162,046Current assetsInventories 2,199 - - 2,199Trade and other 6,873 - 174 7,047receivablesCash and cash 8,055 - - 8,055equivalents ----------------------- -------- --------- --------- -------- 17,127 - 174 17,301Assets held for sale 327 - - 327----------------------- -------- --------- --------- -------- 17,454 - 174 17,628Current liabilitiesFinancial liabiltiesBorrowings - (9,100) - (9,100)Trade and other (32,214) 10,610 1,020 (20,584)payablesCurrent tax - (1,510) - (1,510)liabilitiesProvisions - - - ------------------------ -------- --------- --------- -------- (32,214) - 1,020 (31,194) ----------------------- -------- --------- --------- -------- Net current (14,760) - 1,194 (13,566)liabilities ----------------------- -------- --------- --------- -------- Total assets less 147,400 - 1,080 148,480current liabilities Non-currentliabilitiesFinancial liabiltiesBorrowings (61,646) - - (61,646)Unsecured loan notes (6,000) - - (6,000)Deferred tax - (15,761) (3,593) (19,354)liabilitiesOther non-current - - (2,229) (2,229)liabilitiesProvisions (19,161) 15,761 - (3,400)----------------------- -------- --------- --------- -------- (86,807) - (5,822) (92,629) ----------------------- -------- --------- --------- -------- Net assets 60,593 - (4,742) 55,851======================= ======== ========= ========= ======== Capital and reservesCalled up share 5,615 - - 5,615capitalShare premium account 49,951 - - 49,951Capital reserve - own (322) - - (322)sharesEquity reserve - - 185 185Profit and loss 5,349 - (4,927) 422account ----------------------- -------- --------- --------- -------- Total shareholders' 60,593 - (4,742) 55,851equity ======== ========= ========= =============================== (v) Consolidated Balance Sheet at 3 July 2004 Unaudited Unaudited UK GAAP Reclassification IFRS IFRS of detail to adjustments accord with IFRS £'000 £'000 £'000 £'000Non-current assetsGoodwill - 6,930 (154) 6,776Intangible assets 6,930 (6,930) - -Property, plant and 156,796 - (3,661) 153,135equipmentOther non-current - - 3,487 3,487assets ----------------------- -------- --------- --------- -------- 163,726 - (328) 163,398Current assetsInventories 2,025 - - 2,025Trade and other 7,390 - 174 7,564receivablesCash and cash - - - -equivalents ----------------------- -------- --------- --------- -------- 9,415 - 174 9,589Assets held for sale 460 - - 460----------------------- -------- --------- --------- -------- 9,875 - 174 10,049Current liabilitiesFinancial liabiltiesBorrowings - (71,133) - (71,133)Trade and other (88,507) 71,133 1,227 (16,147)payablesCurrent tax - - - -liabilitiesProvisions - - - ------------------------ -------- --------- --------- -------- (88,507) - 1,227 (87,280) ----------------------- -------- --------- --------- -------- Net current (78,632) - 1,401 (77,231)liabilities ----------------------- -------- --------- --------- -------- Total assets less 85,094 - 1,073 86,167current liabilities Non-currentliabilitiesFinancial liabiltiesBorrowings - - - -Unsecured loan notes (6,000) - - (6,000)Deferred tax - (15,530) (3,670) (19,200)liabilitiesOther non-current - - (2,273) (2,273)liabilitiesProvisions (19,053) 15,530 - (3,523)----------------------- -------- --------- --------- -------- (25,053) - (5,943) (30,996) ----------------------- -------- --------- --------- -------- Net assets 60,041 - (4,870) 55,171======================= ======== ========= ========= ======== Capital and reservesCalled up share 5,615 - - 5,615capitalShare premium account 49,951 - - 49,951Capital reserve - own (322) - - (322)sharesEquity reserve - - 108 108Profit and loss 4,797 - (4,978) (181)account ----------------------- -------- --------- --------- -------- Total shareholders' 60,041 - (4,870) 55,171equity ======================= ======== ========= ========= ======== 13. Interim report It is intended to post the interim report to shareholders by no later than 17February 2006. Copies will be available from this date from the Company'sregistered office at 77 Muswell Hill, London N10 3PJ. Independent review report to Regent Inns plc Introduction We have been instructed by the company to review the financial information forthe 26 weeks ended 31 December 2005, which comprises the consolidated incomestatement, the consolidated balance sheet, the consolidated cash flow statementand the related notes. We have read the other information contained in theinterim report and considered whether it contains any apparent misstatements ormaterial inconsistencies with the financial information. Directors' responsibilities The interim report, including the financial information contained therein, isthe responsibility of, and has been approved by the directors. The directorsare responsible for preparing the interim report in accordance with the ListingRules of the Financial Services Authority. As disclosed in note 1, the next annual financial statements of the Group willbe prepared in accordance with accounting standards adopted for use in theEuropean Union. This interim report has been prepared in accordance with thebasis set out in note 1. The accounting policies are consistent with those that the directors intend touse in the next annual financial statements. As explained in note 1, there is,however, a possibility that the directors may determine that some changes arenecessary when preparing the full annual financial statements for the fifty-twoweeks ending 1 July 2006 for the first time in accordance with accountingstandards adopted for use in the European Union. The IFRS standards and IFRICinterpretations that will be applicable and adopted for use in the EuropeanUnion at 1 July 2006 are not known with certainty at the time of preparing thisinterim financial information. Review work performed We conducted our review in accordance with guidance contained in Bulletin 1999/4"Review of interim financial information" issued by the Auditing Practices Boardfor use in the United Kingdom. A review consists principally of makingenquiries of group management and applying analytical procedures to thefinancial information and underlying financial data, and based thereon,assessing whether the disclosed accounting policies have been applied. A reviewexcludes audit procedures such as tests of controls and verification of assets,liabilities and transactions. It is substantially less in scope than an auditand therefore provides a lower level of assurance than an audit. Accordingly wedo not express an audit opinion on the financial information. This report,including the conclusion, has been prepared for and only for the Company for thepurpose of the Listing Rules of the Financial Services Authority and for noother purpose. We do not, in producing this report, accept or assumeresponsibility for any other purpose or to whom this report is shown or intowhose hands it may come save where expressly agreed by our prior consent inwriting. Review conclusion On the basis of our review we were not aware of any material modifications thatshould be made to the financial information as presented for the 26 weeks ended31 December 2005. PricewaterhouseCoopers LLPChartered AccountantsLondon 6 February 2006 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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