5th Feb 2008 07:01
Regent Inns PLC05 February 2008 Tuesday, 5 February 2007 Regent Inns PLC Half Year Results for the 26 weeks ended 29 December 2007 Regent Inns plc ("Regent" or "the Company"), the operator of UK late-night,entertainment-led venues and restaurants, today announced its results for the 26 weeks ended 29 December 2007. Regent's core brands are Walkabout, Jongleursand Old Orleans. Summary:* Sales increased by 4.2% to £76.0m (2006: £73.0m).* Like-for-like sales fell 3.8% against last year.* Operating profit £4.2m (2006: £6.1m). * Operating profit before exceptionals: £4.4m (2006: £6.7m).* Profit from continuing operations: £0.8m (2006:£2.2m).* Basic EPS from continuing operations: 0.5p (2006: 1.8p).* Operating cash flow from continuing operations: £7.6m (2006: £8.6m).* The Board is not recommending an interim dividend.* Capital expenditure in the period of £9.0m (2006: £3.2m) included 10 OldOrleans refurbishments for £3.5m. Old Orleans refurbishments have yielded anincrease in average weekly sales of 17.4% relative to unrefurbished sites.* Forward focus on cost reduction measures.* Potential disposal of certain non-core and other assets in process.* Possible sale and leaseback of selection of freehold properties being examined. Bob Ivell, Executive Chairman, commented: "Despite the immediate challenges to the sector presented by the banking crisisand its impact on consumer confidence, our brands remain strong and well-positioned to take advantage of a recovery. We have inevitably needed to tailor our investment programme to suit the tough trading conditions but we are continuing to invest in our brands for the long term. In addition, we have further reduced costs and are examining the opportunities for asset disposals and sale and leaseback." Potential offer approaches:On 15 January 2008, the Company announced that it had received a number of preliminary approaches in respect of potential offers for the Company and was in very early stage discussions with some of the potential offerors. These discussions are ongoing and may or may not lead to an offer or offers being made for the entire share capital of the Company. Further announcements will be made on the progress of these discussions as appropriate. - Ends - Enquiries: Regent Inns plc 020 8327 2540Bob Ivell, Executive Chairman John Leslie, Chief Financial Officer Merlin 020 7653 6620Paul Downes 079 0024 4888Anja Kharlamova 078 8788 4788 CHAIRMAN'S STATEMENT This statement reports the results for the 26 weeks ended 29 December 2007. Regent's performance in the period reflected a tougher trading environment and a decline in overall consumer spending which has inevitably impacted the pubs and restaurant sector in general. Regent has been no exception. In spite of this, we have demonstrated good trading performance in parts of the business and remain confident that the underlying strength and long-term prospects of our businesses and brand propositions remain strong. ResultsThe comparative 26 week period includes only 15 weeks of Old Orleans Limited (which was acquired on 17 September 2006) and no weeks for Brandasia Limited, which together comprise the Restaurants business. Continuing operationsSales increased by 4.2% to £76.0m (2006: £73.0m). This includes £15.7m (2006: £10.2m) for Restaurants. Like-for-like sales were 3.8% below last year. Our definition of like-for-likesales was set out on page 20 of our last Annual Report and remains unchanged. Like-for-like venues comprise all but one Entertainment Bar but exclude Restaurants as this business did not trade for the whole of the comparative period. Operating profit was £4.2m (2006: £6.1m). After adding back exceptional items, brand amortisation and loss on sale of property, plant and equipment, operatingprofit was £4.4m (2006: £6.7m). Net interest payable was £3.0m, up 20% on last year due primarily to the fundingof the Old Orleans acquisition for the full period compared with only 15 weekslast year. Profit from continuing operations was £0.8m (2006: £2.2m). Basic earnings per share from continuing operations was 0.5p (2006: 1.8p) and excluding exceptionals was 0.7p (2006: 2.4p). Discontinued operationsThe post-tax loss from discontinued operations was in line with last year at £0.2m and comprised ongoing trading losses of £0.1m and losses on disposals of £0.1m. During the period, we were able to exit permanently our most onerous lease at the amount previously provided and we have also sub-let two other properties at relatively small shortfalls in their passing rents. Subsequent to the period end, we have permanently exited two further properties in line with the amountsprovided and we are in advanced discussions to either surrender or sub-let ourinterests in the remaining six properties. Cash flow and financingCash generated from continuing operations of £7.6m was £1.0m lower than last year; this reduction being slightly less than the reduction in profit from continuing operations. Capital expenditure in the period was £9.0m, significantly higher than the £3.2mincurred in the first half of last year. This included just under £5.0m for refurbishment works at 12 Old Orleans restaurants including the final paymentsfor the refit of the flagship at Lakeside, Thurrock and significant enhancementsto the fire damaged site at Epping. A further 10 restaurants received investment to provide a brighter and more contemporary fit-out. Just under £4m was invested in Entertainment Bars, including the final elements of smoking solutions, and the roll-out of a replacement EPOS system that will facilitate better control of promotional pricing. Net debt at the end of the period was £80.6m, an increase of £5.7m over the period and £0.3m higher than at the end of the first half last year. Operational review RestaurantsDuring the period, we have made good progress in the refurbishment of the OldOrleans estate. The first refurbished restaurant at Lakeside, Thurrock reopenedat the end of the previous financial year. Since then, 11 more have been completed during the 26 week period, including the re-opening of the fire-damaged Epping site. Consumer response has been extremely positive, and we havebeen encouraged by the results of the refurbishment programme to date. Thurrockand Epping, which benefited from major investment, have achieved substantial sales increases since reopening which were slightly ahead of our expectations. The other 10 sites, which have received average investment of £350k each, have collectively achieved an increase in average weekly sales of 17.4% relative tothe non-refurbished sites and we believe that these venues will continue to outperform the non-refurbished sites well in to the future. Restaurants' operating loss of £32k was after suffering revenue loss during the refurbishment closure periods and pre-opening costs to relaunch the sites following closure amounting to £0.3m. Entertainment BarsThe first 14 weeks of this financial year to 6 October 2007, saw like-for-likesales in the Entertainment Bars business decline by 1.0%, reflecting a reasonably robust performance given the particularly wet summer weather conditions and strong comparatives in the first two weeks of the year, which included the final stages of the 2006 FIFA World Cup. During the subsequent weeks of October, trading benefited from the heightened interest in England's participation in the Rugby World Cup, particularly on the days of the semi-finaland final. Walkabout delivered a strong performance in October. Although partially offset by a decline in Jongleurs sales, like-for-like salesin the Entertainment Bars business were down on last year by just 0.6% to the end of October. In November and December, we experienced a deterioration in market conditions, which was reflected across the sector. We believe that this was caused primarily by reduced consumer confidence resulting from a combination of the banking crisis and inflationary cost pressures. Additionally, the smoking ban,introduced in Wales in early April 2007 and England in July 2007, is having a greater impact during the colder and darker winter months. Although we enjoyedstrong uplifts in the absolute level of weekly sales during December, celebrations in Walkabout appeared to be muted compared to last year, resultingin disappointing sales. However, Jongleurs responded extremely well to our premium strategy for Christmas shows, achieving year on year growth of 5.3%. As a result, like-for-like sales in Entertainment Bars for the 26 weeks ended 29 December 2007 were down by 3.8%. New Year's Eve was not included in this reporting period, as was the case last year. Entertainment Bars achieved an operating profit of £8.4m (2006: £9.6m). DividendThe Board is maintaining its approach in not recommending an interim dividend (2006: nil pence per share) as it continues to believe that the Group should remain focused on managing its debt and the capital expenditure programme for Old Orleans to generate improved shareholder returns. Our staffWe continue to motivate our staff and ensure they are well trained in order todeliver excellent customer service and to maintain a safe and enjoyable atmosphere for our customers. Inevitably, the difficult trading conditions across the sector present extra challenges for our front-line staff and management and this has been exacerbated by ever increasing red-tape, police activity and new licensing regulations adding to the pressures under which theyoperate. I am very grateful for the continued commitment and efforts of all ofour staff under difficult circumstances. Current trading and prospectsTraditionally the month with the lowest absolute level of sales in the year, January has seen a continuation of the trends experienced in the last nine weeks of the first half. We strongly believe that this is attributable to the slowdown in consumer confidence and the impact of the smoking ban in the wintermonths. We anticipate that the impact of the latter will lessen as the weatherimproves. Consumer behaviour is harder to predict and the impact will, of course, depend on the timing of a recovery and how other operators in the sector choose to act in the intervening period. Measures have been introduced to reduce costs and capital expenditure levels andThe Board has in process the disposal of certain non-core and other assets anda sale and leaseback of a selection of freehold properties. These measures will enable us to reduce borrowings substantially, which will be important should ourbanking arrangements come under pressure were there to be a prolonged period ofdifficult trading. Despite the immediate challenges to the sector, our brands remain strong and well positioned to take advantage of a recovery. Walkabout retains its prominent position on the high street and strong image, and continues to be one of thehighest take (per unit) operations in the sector. Jongleurs remains virtually unique, and has demonstrated its ability to trade robustly in the current difficult macro-economic environment, and Old Orleans provides a good growth vehicle in a market with positive long term prospects. Potential offer approachesOn 15 January 2008, we announced that the Company had received a number of preliminary approaches in respect of potential offers for the Company and was in very early stage discussions with some of the potential offerors. These discussions are ongoing and may or may not lead to an offer or offers being made for the entire share capital of the Company. Further announcements will bemade on the progress of these discussions as appropriate. Bob IvellExecutive Chairman4 February 2008 Consolidated income statement for the 26 weeks ended 29 December 2007 Unaudited Unaudited Audited 26 weeks ended 26 weeks ended 52 weeks ended 29 December 30 December 30 June 2007 2006 2006 Note £'000 £'000 £'000 Total Total Total Continuing operations Revenue 76,047 72,985 148,927 Cost of sales (17,367) (17,536) (34,793)--------------------------------------------------------------------------------Gross profit 58,680 55,449 114,134Operating costs (54,450) (49,305) (102,648)--------------------------------------------------------------------------------Operating profit 4,230 6,144 11,486--------------------------------------------------------------------------------Analysed as:Operating profit before 4,380 6,684 13,651exceptional items and brandamortisationLoss on sale of property, - (197) (206)plant and equipment Exceptional items 5 - (343) (1,730) Brand amortisation (150) - (229)-------------------------------------------------------------------------------- Interest payable and 6 (3,067) (2,812) (5,859)similar chargesInterest receivable 6 62 316 521-------------------------------------------------------------------------------- Profit before taxation 1,225 3,648 6,148 Taxation 7 (400) (1,418) 644-------------------------------------------------------------------------------- Profit from continuing 825 2,230 6,792operations Discontinued operations Loss on trading 8 (80) (19) (51)activitiesImpairment provision 8 - - (1,368)Provision for onerous 8 - (49) (249)leasesLoss on sale of property, 8 (146) (106) (242)plant and equipment Loss from discontinued (226) (174) (1,910)operations Profit for the period 599 2,056 4,882attributable to equity Earnings per share- basic 10 0.5p 1.8p 4.3p - diluted 10 0.5p 1.8p 4.2p Statement of changes in equity for the 26 weeks ended 29 December 2007 Convertible Profit Share Share Capital Bond Equity & loss Unaudited Capital Premium Reserve reserve Reserve account Total £'000 £'000 £'000 £'000 £'000 £'000 £'000 At 1 July 2006 5,664 50,586 (322) 60 608 6,102 62,698Ordinary shares 1 9 - - - - 10issuedOwn shares - - (187) - - - (187)acquiredProfit for the - - - - - 2,056 2,056periodShare-based - - - - 170 - 170payment expense --------------------------------------------------------------------------------At 30 December 5,665 50,595 (509) 60 778 8,158 64,7472006Ordinary shares 1 23 - - - - 24issuedProfit for the - - - - - 2,826 2,826periodGains arising oninterest ratehedges net ofdeferred tax - - - - - 1,044 1,044Share-based - - - - 124 - 124payment expense --------------------------------------------------------------------------------At 30 June 2007 5,666 50,618 (509) 60 902 12,028 68,765Ordinary shares - - - - - - -issuedOwn shares - - (1,000) - - - (1,000)acquiredProfit for the - - - - - 599 599periodLosses arising oninterest ratehedges net ofdeferred tax - - - - - (872) (872)Share-based - - - - 134 - 134payment expense -------------------------------------------------------------------------------- At 29 December 5,666 50,618 (1,509) 60 1,036 11,755 67,6262007 -------------------------------------------------------------------------------- consolidated balance sheet as at 29 December 2007 Unaudited Unaudited Audited 29 December 30 December 30 June 2007 2006 2007 £'000 £'000 £'000 Assets Non-current assets Intangible assets 11 24,485 22,356 24,643Property, plant and equipment 12 157,865 155,068 154,823Derivative financial 158 - 1,450instrumentsOther non-current assets 2,290 2,432 2,361-------------------------------------------------------------------------------- 184,798 179,856 183,277Current assetsInventories 2,578 2,641 1,972Trade and other receivables 9,362 10,895 8,246Derivative financial 80 - -instrumentsCash and cash equivalents 6,738 4,056 4,463Assets held for sale 210 210 721-------------------------------------------------------------------------------- 18,968 17,802 15,402Current liabilitiesFinancial liabilitiesBorrowings 13 (2,787) (2,787) (2,787)Interest rate swaps - (165) (41)Unsecured convertible loan (5,940) (5,940) (5,940)notesFinance leases (36) (36) (36)Trade and other payables (21,348) (18,889) (22,571)Current tax liabilities (784) (2,296) (874)Provisions 14 (1,910) (800) (1,200)-------------------------------------------------------------------------------- (32,805) (30,913) (33,449)-------------------------------------------------------------------------------- Net current liabilities (13,837) (13,111) (18,047)-------------------------------------------------------------------------------- Total assets less current 170,961 166,745 165,230liabilities Non-current liabilitiesFinancial liabilitiesBorrowings 13 (77,996) (74,728) (69,858)Finance leases (30) (110) (66)Deferred tax liabilities (21,243) (21,078) (21,125)Other non-current liabilities (1,948) (2,051) (1,991)Provisions 14 (2,118) (4,081) (3,425)-------------------------- ------ ----------- --------- -------- (103,335) (102,048) (96,465) -------------------------- ------ ----------- --------- -------- Net assets 67,626 64,697 68,765-------------------------- ------ ----------- --------- -------- Capital and reservesCalled up share capital 5,666 5,665 5,666Share premium account 50,618 50,595 50,618Capital reserve - own shares (1,509) (509) (509)Convertible bond reserve 60 60 60Equity reserve 1,036 778 902Retained earnings 11,755 8,158 12,028-------------------------- ------ ----------- --------- -------- 67,626 64,747 68,765Minority interest - (50) --------------------------- ------ ----------- --------- -------- Total equity 67,626 64,697 68,765-------------------------- ------ ----------- --------- -------- consolidated cash flow statement for the 26 weeks ended 29 December 2007 Unaudited Unaudited Audited 26 weeks 26 weeks 52 weeks ended ended ended 29 December 30 December 30 June 2007 2006 2007 Notes £'000 £'000 £'000 Cash flows from operatingactivities Cash generated from 15 6,835 8,069 24,439operations Interest received 21 39 120Interest paid (2,988) (1,697) (3,990)Tax paid - - (770)-------------------------------------------------------------------------------- Net cash from operating 3,868 6,411 19,799activities -------------------------------------------------------------------------------- Cash flows from investingactivitiesProceeds from sale of 426 1,462 1,317property, plant andequipmentPurchase of property, plant (8,983) (3,222) (10,461)and equipmentAcquisition of subsidiaries, - (27,408) (27,997)net of cash acquired --------------------------------------------------------------------------------Net cash used in investing (8,557) (29,168) (37,141)activities -------------------------------------------------------------------------------- Cash flows from financingactivities Net proceeds from issue of - 10 34ordinary share capitalNet proceeds from issue of 8,000 27,000 208,217new bank loanRepayment of borrowings - - (186,217)Finance lease principal (36) - (32)paymentsPurchase of own shares (1,000) (187) (187)-------------------------------------------------------------------------------- Net cash generated from 6,964 26,823 21,815financing activities ---------------------------------------------------------------------------------------------------------------------------------------------------------------- Net increase in cash and cash 16 2,275 4,066 4,473equivalents -------------------------------------------------------------------------------- Opening cash and cash 4,463 (10) (10)equivalents -------------------------------------------------------------------------------- Closing cash and cash 6,738 4,056 4,463equivalents -------------------------------------------------------------------------------- Notes TO the condensed financial information for the 26 weeks ended 29 December 2007 General information The Company is a limited liability company incorporated and domiciled in theUnited Kingdom. The address of its registered office is Rowley House, SouthHerts Office Campus, Elstree Way, Borehamwood, Hertfordshire WD6 1JH. The Company is listed on the London Stock Exchange. This condensed consolidated financial information for the 26 weeks ended 29December 2007 was approved for issue on 4 February 2008. These interim financial results do not comprise statutory accounts within themeaning of Section 240 of the Companies Act 1985. Statutory accounts for the 52weeks ended 30 June 2007 were approved by the Board of Directors on 8 October2007 and delivered to the Registrar of Companies. The report of the auditors onthose accounts was unqualified, did not contain an emphasis of matter paragraphand did not contain any statement under Section 237 of the Companies Act 1985. Basis of Preparation This condensed consolidated financial information for the 26 weeks ended 29December 2007 has been prepared in accordance with the Disclosure andTransparency Rules of the Financial Services Authority and with IAS 34, 'Interimfinancial reporting' as adopted by the European Union. The condensedconsolidated financial report for the 26 weeks ended 29 December 2007 should beread in conjunction with the Group's statutory consolidated financial statementsfor the 52 weeks ended 30 June 2007 which have been prepared in accordance withIFRSs as adopted by the European Union. The financial statements are prepared on a going concern basis. The Board hasrecently introduced measures to reduce costs and capital expenditure levels andhas in process the disposal of certain non-core and other assets and a sale andleaseback of a selection of freehold properties. These measures will beimportant should borrowing arrangements come under additional pressure in themedium term were there to be a prolonged period of difficult trading. The taxation charge for the period is based on the directors' best estimate ofthe annual effective rate of taxation for the continuing business and thenadjusted as appropriate for the specific exceptional items falling within theinterim reporting period. Accounting policies The accounting policies adopted are consistent with those of the Group'sstatutory consolidated financial statements for the 52 weeks ended 30 June 2007,as described in those financial statements. The following new standards, amendments to standards or interpretations aremandatory for the first time for the financial period ending 28 June 2008. • IFRIC 10, 'Interims and impairment', effective for annual periodsbeginning on or after 1 November 2006. This interpretation has not had anyimpact on the timing or recognition of impairment losses as the Group alreadyaccounted for such amounts using principles consistent with IFRIC 10. • IFRS 7, 'Financial instruments: Disclosures', effective for annualperiods beginning on or after 1 January 2007. IAS 1, 'Amendments to capitaldisclosures', effective for annual periods beginning on or after 1 January 2007.IFRS 4, 'Insurance contracts', revised implementation guidance, effective whenan entity adopts IFRS 7. As this interim report contains only condensedfinancial statements , and as there are no material financial instrument relatedtransactions in the period, full IFRS 7 disclosures are not required at thisstage. The full IFRS 7 disclosures, including the sensitivity analysis to marketrisk and capital disclosures required by the amendment of IAS 1, will be givenin the annual financial statements. • IFRIC11, 'IFRS 2 - Group and treasury share transactions', effectivefor annual periods beginning on or after 1 March 2007. This interpretation isnot relevant to the Group. The following new standards, amendments to standards and interpretations havebeen issued, but are not effective for the financial period ending 28 June 2008and have not been adopted early: • IFRIC 12, 'Service concession arrangements', effective for annualperiods beginning on or after 1 January 2008. Management do not expect thisinterpretation to be relevant to the Group. • IFRS 8, 'Operating segments', effective for annual periods beginningon or after 1 January 2009. This standard relates to disclosure of operatingsegments, management do not expect a significant change to these disclosures inthe financial statements when adopted. Segmental information The segment results for the 26 week periods ended 29 December 2007 and 30December 2006 were as follows: 26 weeks ended 29 December 2007 26 weeks ended 30 December 2006 Entertain- Rest- Central/ Entertain- Rest- Central/ ment Bars aurants unallo- Group ment Bars aurants unallo- Group cated cated -------------------------------------------------------------------------------- £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000ContinuingoperationsRevenue 60,323 15,724 - 76,047 62,764 10,221 - 72,985Cost of (13,257) (4,110) - (17,367) (14,815) (2,721) - (17,536)sales --------------------------------------------------------------------------------Gross profit 47,066 11,614 - 58,680 47,949 7,500 - 55,449Operating (38,618)(11,646) - (50,264) (38,309) (6,701) - (45,010)costs -------------------------------------------------------------------------------- Venue profit 8,448 (32) - 8,416 9,640 799 - 10,439Administrative - - (4,036) (4,036) - - (3,755) (3,755)expenses -------------------------------------------------------------------------------- Operatingprofit/(loss)beforeexceptionalitems andbrandamortisation 8,448 (32) (4,036) 4,380 9,640 799 (3,755) 6,684-------------------------------------------------------------------------------- Other segment items included in the income statement are as follows: 26 weeks ended 29 December 2007 26 weeks ended 30 December 2006 Central/ Entertain- Rest- unallo- Entertain- Restau- unallo- ment Bars aurants cated Group ment Bars rants cated Group-------------------------------------------------------------------------------- £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000ContinuingoperationsDepreciation* 4,389 755 371 5,515 4,837 490 262 5,589 Amortisationof franchisefees* - 8 - 8 - - - -Amortisation - 150 - 150 - - - -of brandsLoss on saleof property,plant andequipment - - - - 197 - - 197Exceptionalitems- Integration - - - - - 343 - 343costs *Charged to operating costs The segment results for the 52 week period ended 30 June 2007 were as follows: 52 weeks ended 30 June 2007 Entertainment Central/ Bars Restaurants unallocated Group-------------------------------------------------------------------------------- £'000 £'000 £'000 £'000Continuing operationsRevenue 124,275 24,652 - 148,927Cost of sales (28,170) (6,623) - (34,793)--------------------------------------------------------------------------------Gross profit 96,105 18,029 - 114,134Operating costs (75,422) (17,469) - (92,891)--------------------------------------------------------------------------------Venue profit 20,683 560 - 21,243Administrative expenses - - (7,592) (7,592)--------------------------------------------------------------------------------Operating profit beforeexceptional items and brand 20,683 560 (7,592) 13,651amortisation -------------------------------------------------------------------------------- Other segment items included in the income statement are as follows: 52 weeks ended 30 June 2007 Entertainment Central/ Bars Restaurants unallocated Group ------------------------------------------------------------------------------- £'000 £'000 £'000 £'000Continuing operationsDepreciation* 8,819 1,129 517 10,465Amortisation of franchise fees* - 8 - 8Amortisation of brands - 229 - 229Loss on sale of property, plant and 206 - - 206equipmentExceptional items- Integration costs - 1,175 - 1,175- Restructuring costs - - 555 555 *Charged to operating costs The segment assets and liabilities at 29 December 2007 and 30 December 2006 andcapital expenditure for the 26 weeks then ended are as follows: 26 weeks ended 29 December 2007 26 weeks ended 30 December 2006 Entertain- Rest- Central/ Entertain- Rest- Central/ ment Bars aurants unallo- Group ment Bars aurants unallo- Group cated cated £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000-------------------------------------------------------------------------------- Assets 154,758 36,341 12,667 203,766 154,680 31,430 11,548 197,658Liabil- ities 12,813 5,373 117,954 136,140 15,348 4,419 113,194 132,961Capital expend- ture 3,587 4,601 406 8,594 2,682 25 515 3,222 The segment assets and liabilities at 30 June 2007 and capital expenditure forthe 52 weeks then ended are as follows: 52 weeks ended 30 June 2007 Entertainment Central/ Bars Restaurants unallocated Group £'000 £'000 £'000 £'000--------------------------------------------------------------------------------Assets 154,100 34,768 9,831 198,699Liabilities 9,663 6,638 113,633 129,934Capital expenditure 7,408 2,133 1,777 11,318 Segment assets consist primarily of property, plant and equipment, intangibleassets, inventories, and trade and other receivables. Unallocated assetscomprise cash and cash equivalents and assets held-for-resale. Segment liabilities comprise operating liabilities. Unallocated liabilitiescomprise items such as borrowings including interest rate swaps, current taxliabilities, deferred tax liabilities and provisions. Capital expenditure comprises additions to property, plant and equipment. The segment assets and liabilities are reconciled to entity assets andliabilities as follows: 26 weeks ended 26 weeks ended 29 December 30 December 2007 2006 Assets Liabilities Assets Liabilities £'000 £'000 £'000 £'000--------------------------------------------------------------------------------Segment assets/liabilities 191,099 18,186 186,110 19,767Central/unallocated:Property, plant and equipment 2,852 - 2,302 -Trade and other receivables 3,103 - 5,305 -Cash and cash equivalents 6,712 - 3,941 -Current borrowings - 8,665 - 8,830Non-current borrowings - 77,808 - 74,540Trade and other liabilities - 12,216 - 8,062Current tax liabilities - 784 - 2,296Deferred tax liabilities - 18,481 - 19,466-------------------------------------------------------------------------------- 203,766 136,140 197,658 132,961-------------------------------------------------------------------------------- 52 weeks ended 30 June 2007 Assets Liabilities £'000 £'000--------------------------------------------------------------------------------Segment assets/liabilities 188,868 16,301Central/unallocated:Property, plant and equipment 2,817 -Trade and other receivables 2,629 -Cash and cash equivalents 4,385 -Current borrowings - 8,706Non-current borrowings - 69,670Trade and other liabilities - 16,020Current tax liabilities - 874Deferred tax liabilities - 18,363-------------------------------------------------------------------------------- 198,699 129,934-------------------------------------------------------------------------------- Exceptional items Unaudited Unaudited Audited 26 weeks 26 weeks 52 weeks ended ended ended 29 December 30 December 30 June 2007 2006 2007 £'000 £'000 £'000 Integration of Old Orleans - (343) (1,175)Corporate restructuring - - (555)-------------------------------------------------------------------------------- - (343) (1,730)-------------------------------------------------------------------------------- Finance costs Unaudited Unaudited Audited 26 weeks 26 weeks 52 weeks ended ended ended 29 December 30 December 30 June 2007 2006 2007 £'000 £'000 £'000 Interest payable and similar chargesInterest payable on bank borrowings (2,637) (2,410) (5,117)Amortisation of issue costs of bank (138) (138) (275)loanInterest payable on loan notes (227) (207) (422)Other interest payable (65) (57) (45)-------------------------------------------------------------------------------- (3,067) (2,812) (5,859)--------------------------------------------------------------------------------Interest receivableInterest income 21 39 120Gains arising on interest rate swaps 41 277 401-------------------------------------------------------------------------------- 62 316 521-------------------------------------------------------------------------------- Taxation The continuing operations pre-exceptional taxation charge for the 26 weeks ended29 December 2007 has been calculated by applying the estimated effective rate oftaxation for the year ending 28 June 2008, and then adjusted for specificexceptional items falling within the interim period. The taxation charge/creditsapplied to the discontinued operations reflects the appropriate treatment forthe specific items arising in the interim period. Unaudited Unaudited Audited 26 weeks 26 weeks 52 weeks ended ended ended 29 December 30 December 30 June 2007 2006 2007 Total Total Total £'000 £'000 £'000 Current tax - continuing operations- Current year - (978) (977)- Adjustment in respect of prior 90 - 552years --------------------------------------------------------------------------------Total current tax 90 (978) (425)--------------------------------------------------------------------------------Deferred tax - continuingoperations- Current year (554) (440) (1,350)- Adjustment in respect of change in - - 1,476tax rate- Adjustment in respect of prior 64 - 943years --------------------------------------------------------------------------------Total deferred tax (490) (440) 1,069-------------------------------------------------------------------------------- Taxation (400) (1,418) 644-------------------------------------------------------------------------------- Discontinued operations Unaudited Unaudited Audited 26 weeks 26 weeks 52 weeks ended ended ended 29 December 30 December 30 June 2007 2006 2007 £'000 £'000 £'000 Revenue 1,089 1,089 2,193Expenses (1,202) (1,116) (2,266)--------------------------------------------------------------------------------Loss before tax (113) (27) (73)Attributable tax credits 33 8 22--------------------------------------------------------------------------------Post tax results from discontinued (80) (19) (51)operations ----------------------------------------Impairment provision - - (1,368)Attributable tax credits - - - ----------------------------------------Post tax loss on impairment - - (1,368)provision ----------------------------------------New provision for onerous leases - (70) (2,440)Onerous lease provisions released - - 2,085Attributable tax credits - 21 106 ----------------------------------------Post tax loss on onerous leases - (49) (249) ----------------------------------------Loss on sale of property, plant and (146) (106) (242)equipmentAttributable tax credits - - - ----------------------------------------Post tax loss on sale of property, (146) (106) (242)plant and equipment -----------------------------------------------------------------Net loss attributable to discontinued (226) (174) (1,910)operations ---------------------------------------- Dividends The directors do not propose an interim dividend (2006 - nil p per share). Earnings per share Earnings per share have been calculated using the weighted average number ofshares in issue during the relevant financial periods excluding those held inthe Employee Share Ownership Trust and those held as Treasury shares which havebeen treated as cancelled. The weighted average number of shares in issue was111,233,799 (2006 - 112,491,097) and the earnings, being profit on ordinaryactivities after taxation, were £599,000 (2006 - £2,056,000). Diluted earnings per share adjusts for those share options granted to employeesand the holders of convertible loan stock where the exercise price is less thanthe average price of the Company's shares during the period. The dilutedweighted average number of shares was 113,685,834 (2006 - 114,397,729). The table below shows the basis of calculation of basic earnings per share anddiluted earnings per share, and also sets out the steps to exclude discontinuedoperations from the calculations in order to derive adjusted earnings per share.In the opinion of the directors, earnings per share from continuing operationsand adjusted earnings per share, being earnings per share from continuingoperations before exceptional items, brand amortisation and loss on sale ofproperty, plant and equipment are more representative indicators of theCompany's underlying trading performance. Earnings Earnings per share Unaudited Unaudited Audited Unaudited Unaudited Audited 26 weeks 26 weeks 52 weeks 26 weeks 26 weeks 52 weeks ended ended ended ended ended ended 29 December 30 December 1 July 29 December 30 December 1 July 2007 2006 2006 2007 2006 2006 Total EPS Basic 599 2,056 4,882 0.5 1.8 4.3 Dilution impact - - - - - (0.1)of options -------------------------------------------------------------------------------- Diluted 599 2,056 4,882 0.5 1.8 4.2 Exclude 226 174 1,910 - - -discontinued operations-------------------------------------------------------------------------------- EPS fromcontinuingoperations Diluted exclu- 825 2,230 6,792 0.7 2.0 5.9ding discontinuedoperations Basic excluding 825 2,230 6,792 0.7 1.9 6.0discontinued operations-------------------------------------------------------------------------------- Excludeexceptional items,brand amortisationand loss on saleof property, plantand equipment, netof taxation - 437 1,646 - - --------------------------------------------------------------------------------- Adjusted EPS Basic on 825 2,667 8,438 0.7 2.4 7.5continuingoperations Diluted on 825 2,667 8,438 0.7 2.3 7.3continuing operations-------------------------------------------------------------------------------- EPS fromdiscontinuedoperations Basic on (226) (174) (1,910) (0.2) (0.2) (1.7)discontinued operations-------------------------------------------------------------------------------- Intangibles Unaudited Unaudited Audited 26 weeks 26 weeks 52 weeks ended ended ended 29 December 30 December 30 June 2007 2006 2007 £'000 £'000 £'000 Opening book amount 24,643 6,776 6,776Acquisitions - 15,580 18,104Brand amortisation (150) - (229)Franchise amortisation (8) - (8)------------------------- ------------ ------------ -----------Closing book amount 24,485 22,356 24,643------------------------- ------------ ------------ ----------- Property, plant and equipment Unaudited Unaudited Audited 26 weeks 26 weeks 52 weeks ended ended ended 29 December 30 December 30 June 2007 2006 2007 £'000 £'000 £'000 Opening book amount 154,823 143,980 143,980Additions 8,594 3,222 11,318Acquisition of subsidiary - 15,220 14,252undertakingsDepreciation (5,515) (5,589) (10,465)Provision for impairment - - (1,368)Transfers to assets held-for-sale - - (511)Disposals (37) (1,765) (2,383)------------------------- ------------ ------------ -----------Closing book amount 157,865 155,068 154,823------------------------- ------------ ------------ ----------- Borrowings Unaudited Unaudited Audited 26 weeks 26 weeks 52 weeks ended ended ended 29 December 30 December 30 June 2007 2006 2007 £'000 £'000 £'000 Non-current 77,996 74,728 69,858Current 2,787 2,787 2,787------------------------- ------------ ------------ ----------- 80,783 77,515 72,645------------------------ ------------ ------------ ----------- Opening amount 72,645 50,137 50,137New bank loans 8,000 27,000 208,217Repayment of bank loans - - (186,217)Repayment of overdraft - (10) (10)Other non cash changes - amortisation 138 138 268of arrangement feesLoans acquired with subsidiary - 250 250undertakings ------------ ------------ ------------------------------------Closing amount 80,783 77,515 72,645------------------------- ------------ ------------ ----------- Provisions Unaudited Unaudited Audited 26 weeks 26 weeks 52 weeks ended ended ended 29 December 30 December 30 June 2007 2006 2007 £'000 £'000 £'000 Non-current 2,118 4,081 3,425Current 1,910 800 1,200--------------------------- ---------- ------------ ----------- 4,028 4,881 4,625-------------------------- ---------- ------------ ----------- Opening amount 4,625 4,880 4,880Arising on acquisition of Old Orleans - 540 700LimitedNew provisions charged to the income - 70 2,440statementProvisions released to the income - - (2,085)statementUtilised (597) (609) (1,310)--------------------------- ---------- ------------ -----------Closing amount 4,028 4,881 4,625--------------------------- ---------- ------------ ----------- Cash generated from operations Unaudited Unaudited Audited 26 weeks 26 weeks 52 weeks ended ended ended 29 December 30 December 30 June 2007 2006 2007 £'000 £'000 £'000 Continuing operationsNet profit 825 2,230 6,792Adjustment for:Tax 400 1,418 (644)Depreciation 5,515 5,589 10,465Brand and franchise amortisation 158 - 237Loss on disposal of property, plant - 197 206and equipmentOther exceptional items - 343 1,730Interest income (21) (39) (120)Gains arising on interest rate (41) (277) (401)swapsInterest expense 3,067 2,812 5,859Share-based payments 134 170 294Lease premiums 71 72 143--------------------------- ---------- ------------ ----------- 10,108 12,515 24,561Changes in working capital(Increase) in inventories (596) (784) (119)(Increase) in trade and other (1,055) (3,804) (548)receivables(Decrease)/ increase in trade and (450) 1,237 3,483other payables ---------- ------------ --------------------------------------Cash generated from continued 8,007 9,164 27,377operations before exceptionals Cashflows resulting from (376) (546) (1,645)exceptionals ---------- ------------ -------------------------------------- Cash generated from continuing 7,631 8,618 25,732operations ---------- ------------ -------------------------------------- Discontinued operationsNet loss (226) (174) (1,910)Taxation (33) (29) (128)Impairment provision - - 1,368Loss on disposal of property, plant and 146 106 242equipmentOnerous lease provisions - new - 70 2,440Onerous lease provisions - releases - - (2,085)--------------------------- ---------- ------------ ----------- (113) (27) (73)Changes in working capital(Increase)/ decrease in inventories (10) (3) 1(Increase)/ decrease in trade and other (61) 20 41receivablesIncrease in trade and other payables 8 12 2--------------------------- ---------- ------------ -----------Cash generated from discontinued (176) 2 (29)operations before exceptionals Cashflows resulting from exceptionals (620) (551) (1,264)--------------------------- ---------- ------------ -----------Cash flow from discontinued operations (796) (549) (1,293)--------------------------- ---------- ------------ ----------- Cash generated from operations 6,835 8,069 24,439--------------------------- ---------- ------------ ----------- Reconciliation of net cash flow to movement in net debt Unaudited Unaudited Audited 26 weeks 26 weeks 52 weeks ended ended ended 29 December 30 December 1 July 2007 2006 2006 £'000 £'000 £'000 Increase in cash in the period 2,275 4,066 4,473 ---------- ------------ ----------- Cash inflow from increase in loans (8,000) (27,000) (22,000)--------------------------- ---------- ------------ ----------- Increase in net debt resulting from (5,725) (22,934) (17,527)cashflowsLoans acquired with subsidiary - (250) (250)undertakingsFinance leases acquired with - (146) (134)subsidiary undertakingsRepayment of finance leases during 36 - 32the periodOther non cash changes (138) (138) (268)Net debt at beginning of period (74,284) (56,137) (56,137)--------------------------- ---------- ------------ ----------- Net debt at end of period (80,111) (79,605) (74,284)Unamortised bank loan facility (467) (735) (605)arrangement fees ---------- ------------ -------------------------------------- (80,578) (80,340) (74,889) --------------------------- ---------- ------------ ----------- Related party transactions Key management personnel, other than executive and non-executive directors,comprises heads of department and operational area managers. Their aggregateremuneration amounted to: Unaudited Unaudited Audited 26 weeks 26 weeks 52 weeks ended ended ended 29 December 30 December 1 July 2007 2006 2006 £'000 £'000 £'000 Salaries and other short-term 663 644 1,289benefitsPensions 34 33 66Share-based payments 28 29 57-------------------------------------------------------------------------------- 725 706 1,412-------------------------------------------------------------------------------- Interim report It is intended to post the interim report to shareholders by no later than 22February 2008. Copies will be available from this date at the Company's headoffice: Rowley House, South Herts Office Campus, Elstree Way, Borehamwood,Herts, WD6 1JH. Statement of directors' responsibilities The directors confirm that this condensed set of financial statements has beenprepared in accordance with IAS 34 as adopted by the European Union, and thatthe interim management report herein includes a fair review of the informationrequired by DTR 4.2.7 and DTR 4.2.8. The directors of Regent Inns plc Group are listed in the Regent Inns plc GroupReport and Accounts for 30 June 2007. By order of the Board Bob Ivell 4 February 2008 Executive Chairman John Leslie 4 February 2008 Chief Financial Officer Independent review report to Regent Inns plc Introduction We have been engaged by the company to review the condensed set of financialstatements for the 26 weeks ended 29 December 2007, which comprises theconsolidated income statement, the consolidated balance sheet, statement ofchanges in equity, the consolidated cash flow statement and the related notes.We have read the other information contained in the interim report andconsidered whether it contains any apparent misstatements or materialinconsistencies with the information in the condensed set of financialstatements. Directors' responsibilities The half-yearly financial report is the responsibility of, and has been approvedby, the directors. The directors are responsible for preparing the half-yearlyfinancial report in accordance with the Disclosure and Transparency Rules of theUnited Kingdom's Financial Services Authority. As disclosed in note 2, the annual financial statements of the group areprepared in accordance with IFRSs as adopted by the European Union. Thecondensed set of financial statements included in this half-yearly financialreport has been prepared in accordance with International Accounting Standard34, "Interim Financial Reporting", as adopted by the European Union. Our responsibility Our responsibility is to express to the Company a conclusion on the condensedset of financial statements in the half-yearly financial report based on ourreview. This report, including the conclusion, has been prepared for and onlyfor the Company for the purpose of the Disclosure and Transparency Rules of theFinancial Services Authority and for no other purpose. We do not, in producingthis report, accept or assume responsibility for any other purpose or to anyother person to whom this report is shown or into whose hands it may come savewhere expressly agreed by our prior consent in writing. Scope of review We conducted our review in accordance with International Standard on ReviewEngagements (UK and Ireland) 2410, 'Review of Interim Financial InformationPerformed by the Independent Auditor of the Entity' issued by the AuditingPractices Board for use in the United Kingdom. A review of interim financialinformation consists of making enquiries, primarily of persons responsible forfinancial and accounting matters, and applying analytical and other reviewprocedures. A review is substantially less in scope than an audit conducted inaccordance with International Standards on Auditing (UK and Ireland) andconsequently does not enable us to obtain assurance that we would become awareof all significant matters that might be identified in an audit. Accordingly, wedo not express an audit opinion. Conclusion Based on our review, nothing has come to our attention that causes us to believethat the condensed set of financial statements in the half-yearly financialreport for the 26 weeks ended 29 December 2007 is not prepared, in all materialrespects, in accordance with International Accounting Standard 34 as adopted bythe European Union and the Disclosure and Transparency Rules of the UnitedKingdom's Financial Services Authority. PricewaterhouseCoopers LLP Chartered Accountants London 4 February 2008 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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