THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF THE MARKET ABUSE REGULATION (EU No. 596/2014) ("MAR"). THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN

25 February 2021

VARIOUS EATERIES PLC

("Various Eateries" or "the Company"

and with its subsidiaries "the Group")

Final Results

52 week period ended 27 September 2020

Ideally Positioned to Capitalise on Post-Lockdown Opportunities 

Various Eateries PLC, the owner, developer and operator of restaurant and hotel sites in the United Kingdom, announces its results for the 52 weeks ended 27 September 2020.

Highlights

·    Raised £25m in successful AIM listing in the final week of the period to take advantage of the state of the hospitality market

o  Increased availability of attractive sites, reduced competition, availability of talent and changes in consumer behaviour provide the ideal backdrop to the Company's growth strategy

o  Proven management track record in developing and rolling out successful restaurant brands

·    Completed significant reshaping with the Group now ideally positioned for post Covid expansion

o  Acquired the freehold and completed the re-fit of a new site in Cobham, opened post year end

o  Revised and refined the menu offering across the Coppa Club estate, further improving quality, expanding the price range and focusing on the all-day club offer

o  Italian brasserie brand, Tavolino, with its first site opened in July, poised to take advantage of availability of prime high street sites across the UK

o  Brought two hotel sister operations into the Group in order to enhance the clubhouse element of the Coppa Club brand and improve profitability through sales and cost synergies

o  Industry veteran, Andy Bassadone, joined the Board as Executive Chairman and invested in the Group

o  Management team further strengthened with senior appointments including CEO Yishay Malkov and, post-period end, Property Director Raj Manek (a non-board position)

Financials

·    Robust trading pre-Covid to the middle of February

o  Positive like-for-like revenue generated from Coppa estate

·    Better than anticipated trading when the Group re-opened, from July to September

o  Like-for-like revenue generated from Coppa estate was up 0.8% despite all the restrictions that were in place

·    Particularly good performance post re-opening at sites outside of London over the same period

o  Like-for-like revenue generated from Coppa estate outside of London up 24%

o  Three sites achieved their record trading weeks in the period

Due to the timing of the reorganisation undertaken ahead of the Company's listing, these results do not include any trading from the newly acquired hotel entities. The results were also impacted by a number of unusual items including the disruptive effects of COVID-19 and the costs of the listing/restructure.

·    Total Group revenue for the year down 36% to £16.5m (FY19: £25.6m)

·    EBITDA loss before exceptional costs for the year of £1.7m with total loss after exceptional costs and impairments of £14.4m

·    Net assets of £27.2m as at 27 September 2020

Post-period

·    Coppa Club Cobham opened in December

·    Trading impacted by further Covid-19 restrictions with all the Group's sites currently closed

·    Business interruption insurance interim payment of £2.5m received with negotiations regarding claims ongoing

·    Ideally positioned for a return to growth on re-opening, with a swift implementation of the strategy to begin once restrictions lift

Andy Bassadone, Executive Chairman of Various Eateries, said:

"With a pandemic, a substantial restructuring and our successful fund-raising and listing on AIM, 2020 was a remarkable year for Various Eateries that puts us in an excellent position in 2021. The opportunities as we move out of the Covid-19 era are enormous and with strong liquidity, contemporary formats, a compelling growth strategy and a management team with a proven track record of delivery, we are confident in our ability to capitalise on them.

While lockdowns restricted our ability to trade in the year, sales in the periods we were able to open were above our expectations and bode well for the future. Operationally we were also able to make significant progress, with the opening of our first Tavolino and the new Coppa Club in Cobham of particular note. Both through closures and new openings, our teams have responded brilliantly and I would like to thank them all for their hard work, patience and understanding in what has been a challenging time for them and their families.

It has been difficult to watch as the virus continues to devastate our industry, but it has panned out as we expected, validating our approach and making us even more determined to make a contribution to the recovery. As soon as we are given the green light by Government, we plan to expand the business, to employ more people and to give customers high-quality experiences of hospitality, perfectly suited to a post lockdown world. With large sites, extensive outdoor space and all-day offer, Coppa Club is perfectly suited to the increase in remote working and Tavolino is poised to take advantage of the availability of prime high street sites across the UK. There will inevitably be volatility as we emerge from the pandemic, but we are expecting a strong bounce back in the sector once restrictions are lifted and look forward to driving growth as soon as circumstances permit."

A video introduction to Various Eateries and overview of the results is available here: http://bit.ly/VARE_FY20_results_overview

Annual General Meeting

The Company confirms that it intends to dispatch its Annual Report and Accounts; and notice of Annual General Meeting to shareholders, and post the documents on the Company's website, next week. A further announcement will be made at that time.

Enquiries

About Various Eateries

Various Eateries owns, develops and operates restaurant and hotel sites in the United Kingdom. The Group's stated mission is "great people delivering unique experiences through continuous innovation".

The Group is led by a highly experienced senior team including Andy Bassadone (Executive Chairman), Hugh Osmond (Founder), Yishay Malkov (CEO), Oliver Williams (CFO) and Matt Fanthorpe (Chef Director, a non-board position).

The Group operates two core brands across eleven locations:

For more information visit www.variouseateries.co.uk

CHAIRMAN & CHIEF EXECUTIVE'S STATEMENT

In the run up to our Initial Public Offering (IPO) on the AiM Market of the London Stock Exchange, which took place on 25 September 2020, we spoke to investors of the far-reaching consequences we expected Covid-19 to have on the hospitality sector, and the vast opportunities it would create for a well-funded group with the right management team, modern formats built for the post-Covid-19 environment, and a growth strategy fit for purpose.

While the exact timing and extent of restrictions has been difficult to predict, overall the pandemic and its effects on the hospitality industry continue to pan out much as we expected. Just 70% of Britain's licensed premises were trading by the end of October 2020¹. Over 650,000 hospitality jobs were lost in 2020², and with more than a million people in the food services and accommodation industry furloughed as of 31 December 2020³, this figure is likely to grow dramatically in 2021. UK Hospitality has highlighted that four in ten businesses in the sector have stated that they would fail by mid-2021, with only one in five having adequate capital to survive beyond February 2021 under present levels of support⁴.

As long-standing members of this industry, these statistics make difficult reading, however they do validate our approach and only make us more committed to our plans to rebuild; to acquire new sites, create jobs for as many people as possible, and to establish a new breed of venue that customers can enjoy in comfort and in safety.

In the period to 27 September 2020 ("FY20"), we went through a comprehensive process of overhauling the business in preparation for this moment. We built an incredible team - one of the most experienced in our industry - rationalised and improved our estate leaving us with only high-quality sites ready for growth and developed new brands appropriate for the evolving needs of modern consumers.

With all of the transformative work undertaken in the year, together with our new listed status and the associated raise of £25mcompleted in September, we are confident we have the experience and resources to achieve our ambitions.

OUR STRATEGY

Our strategy is based on the Board's belief that the current environment presents an unprecedented opportunity for us, as a well-funded operator with strong and fresh brands and an experienced management team, to create a major leisure group post the Covid-19 lockdown. Initially this will be based on our two core brands of Coppa Club and Tavolino.

Coppa Club is a multi-use, all-day concept that combines restaurant, terrace, café, lounge, bar and remote working spaces under one roof. Tavolino aims to address a gap in the market for high-quality Italian food at mid-market prices.

Both Coppa and Tavolino are immediately ready to scale up given the economic challenges facing the sector. This is particularly as a consequence of Covid-19, which has led to a significant reduction in competition, premium site availability the likes of which the industry has never seen, and an increased availability of great, hard-working people.

The impact of Covid-19, combined with the experience of our management team, represents an unprecedented opportunity to build a major hospitality group, post-Covid-19. Accordingly, using the funds raised in the recent placing, we intend to invest in the expansion of the Coppa Club and Tavolino brands by targeting distressed sites in prime locations and also intend to identify potential, complementary, bolt-on acquisitions of other restaurant brands to accelerate growth across the Group.

TRADING & COVID-19 IMPACT

While the two new Coppa Club sites which were opened in the 52 weeks to 29 September 2019 ("FY19") delivered additional revenues in FY20, due to the reshaping of the business (including the planned closure and disposal of six sites in FY19), the severe restrictions placed on trading in response to Covid-19, and a period where our restaurant in Tower Bridge was closed for refurbishment to become the first Tavolino, overall revenue for FY20 was down 36% to £16.4m from £25.6m.

However, in periods outside of lockdown, trading was strong, especially in our new openings. The summer trade in particular, post July reopening from lockdown, saw some encouraging results for the future whilst the overall liquidity of the business remains strong.

A timeline of the various restrictions and the associated impact on trading is set out in the Financial Review.

DEVELOPING OUR ESTATE

During the reporting period we completed the reshaping of our estate with the disposal of the remaining four discontinued sites following the 11 made in FY19, as well as the acquisition of the next Coppa Club in Cobham. Prior to IPO, we also acquired the Rare Bird hotel and events businesses at Coppa Club Sonning and Streatley. We brought these two sister operations into the Group in order to enhance the clubhouse element of the Coppa Club brand and improve profitability through sales and cost synergies.  

FY2020 saw the launch of the new Tavolino brand, with the first site opening in Central London in July. Despite the significant reduction in footfall caused by Covid-19, the launch was a success and customer feedback was strong, boding well for the future. MICHELIN recently said of the site: "Pasta handmade on the premises daily and classic Italian dishes crafted using produce imported from small Italian suppliers are the draw here. These are matched by stunning views over the Thames towards Tower Bridge and the Tower of London - making a table on the terrace a must in summer".

Post-period end, we opened our seventh Coppa Club site in Cobham, Surrey. The new site spans two floors and adopts the larger Club & Brasserie format. It includes a restaurant, bar, lounge and rooftop terrace complete with the brand's signature igloos. In line with the existing estate, it provides a 'clubhouse' that consumers can identify as their own, without annual membership fees but providing all the associated facilities. The flexible format means consumers can use sites for a range of activities from eating and drinking to socialising, working or relaxing, making it fit for changing consumer tastes in the 21st century

As at 27 September 2020, the Group has 11 sites, all in prime locations and without restrictive lease agreements. The sites themselves are spacious and most have significant outdoor spaces. Coppa's 'igloo' concept has proven exceptionally popular, with all igloos booked out solidly throughout the July to September 2020 re-opening period.

IMPROVING OUR OFFERING

During the period, we focused on making all our restaurants the very best they can be, enhancing our market-leading product, service and environment wherever possible. The philosophy of the Group is built around an obsession over quality, consistency and high standards. To that end, we continue to review our own performance in a systematic and disciplined way using tools such as the newly introduced customer feedback platform and will continue to do so.

One product of this ongoing process was the introduction of a revised and refined menu across the Coppa Club estate on reopening in July, which had been trialled briefly in March. The new menu brought a further improvement in quality, expanded the price range and focused on the all-day club offer. Not only was this well-received, it drove an improvement to margin.

In line with what modern consumers expect and demand, Various Eateries is focused on building strong, authentic menus using premium ingredients. One of our core differentiators is that the Chef Director and his team have a senior role within the Group. They have developed bespoke, quality products that are scalable and can be efficiently, consistently and profitably rolled out across all new sites.

OUR PEOPLE

During the period industry veteran, Andy Bassadone joined the Board as Executive Chairman and invested in the Group. The management team was then further strengthened with senior appointments including CEO Yishay Malkov and, post-period end, Property Director Raj Manek (a non-Board position).

Supporting our people throughout the impacts of Covid-19 has been incredibly important. Regular communication with our furloughed staff through our intranet has been a key priority, as has the introduction of several initiatives aimed at encouraging engagement and protecting mental wellbeing such as fitness clubs and interactive tutorials where team members volunteered to host video calls to teach colleagues a new skill. Our people are the lifeblood of the businesses and on behalf of the Board we would like to thank them for their efforts and patience through what has been a very difficult time for them and their families.

MARKET DEVELOPMENTS

Covid-19 has had a devastating impact on our industry and will leave scars for many years to come. However, it is clear is that the demand for enjoyable leisure and hospitality experiences has not waned. We believe there will be a strong bounce back once restrictions are lifted and have already seen signs of it ourselves when we were able to trade in the summer of 2020. Similarly, with pent up demand for holidaying likely to lead to an increase in 'staycations', and a lengthy backlog of weddings and other events, we expect to see trade in our hotel businesses accelerate post-Covid-19.

It has been estimated that 50% of the UK workforce favour working remotely for 1-2 days per week post-lockdown, and consumers now attach much greater importance to safety when making choices. Coppa Club in particular is well-placed to take advantage of these and other changes in consumer behaviour which have been accelerated by Covid-19. The sites are typically spacious, with large outdoor areas, and can be used throughout the day for everything from working to social gatherings and of course meals from breakfast through to dinner. This is a key reason why we believe we will be successful in the long-term.

CURRENT TRADING AND OUTLOOK

The same trading patterns we saw between July and September continued through the weeks we were open in October, with positive like-for-like performance at our sites outside of London particularly encouraging. In the period since, we have been focused on continuing to support our people while working hard behind the scenes to prepare the Group to capitalise on the wealth of opportunities that will be available once restrictions are eased.

As recently communicated, while the business has been closed, management has been exploring a number of desirable sites for expansion across the UK. Given the lack of concrete guidance as to when lockdown and other restrictions will be lifted, the Company had so far chosen to hold off signing up to any new leases, but with the roadmap now laid out expects to be able to do so in the near future on terms that reflect the considerable and continuing fall in retail property values.

The operating environment is likely to remain volatile for some time, but with a diverse mix of restaurants and hotels designed specifically to cater to the changes in the consumer landscape, a clear strategy and a proven management team, we are excited by what the future holds.

Andy Bassadone

Executive Chairman

Yishay Malkov

Chief Executive Officer

¹ November edition of CGA and AlixPartners' Market Recovery Monitor

² According to analysis by software provider Fourth

³ According to HMRC coronavirus statistics

⁴ Stated as part of its evidence to the Treasury Select Committee Inquiry

FINANCIAL REVIEW

FINANCIAL PERFORMANCE

The financial results for FY20 have been materially impacted by the following unusual factors:

·    The comprehensive restructuring and refinancing of the Group ahead of the Initial Public Offering (IPO) in September 2020

·    The costs of the IPO

·    Impairment charges driven by market conditions

·    The impact of Covid-19 resulting in zero revenue in lockdown periods and disruptions at other times

The Group's hotel and event operations at Sonning and Streatley were acquired during the final week of the financial year and had no impact on the FY20 results.

Overall Group revenue was down by 36% (2020 £16.5m, 2019 £25.6m), resulting in a Trading EBITDA loss of £0.8m (2019 £2.3m profit) and a Loss before tax of £14.4m (2019 £12.0m). The principles of merger accounting have been followed and so the results and comparatives are those of the underlying group. The summarised results are:

Summary of financial performance for the 52 weeks ended 27 September 2020

Pre-Covid

Despite the existing industry-wide challenges, trade was relatively strong up to the beginning of February 2020, with the Coppa Club estate trading positive LFLs. However, with the arrival of Covid-19 in the UK, sales began to decline and on 20 March, the country went into a full lockdown and all sites were forced to close.

During the first national lockdown

From the end of May (until the site fully reopened in July), Coppa Club Streatley was reopened to run a takeaway service. This proved a popular initiative, generating significant sales and having a positive impact on the community, with the grounds of the adjacent hotel providing local people with an expansive, safe and picturesque environment in which to enjoy the good weather.

Post-lockdown performance

The trade of the estate post-lockdown, whilst varying from site to site, was far stronger than we had anticipated and ahead of the market.

From 4 July, when lockdown was officially lifted, the Group began a phased reopening of the estate, with 80% of its sites open and trading by the end of July.

All the Group's London sites were negatively impacted by the significantly reduced footfall as most of the UK transitioned to home working and staying local. Our sites outside London, however, were major beneficiaries of this trend.

Like-for-like sales growth

Whilst these results include VAT benefit, there were also limits on social distancing and mixing households, the introduction of the 10pm curfew, the 'Rule of 6' in September and reduced opening hours in the mornings. Like-for-like revenue generated from the Coppa Club estate was up 0.8% despite all the restrictions that were in place

Encouragingly, three Coppa Clubs achieved record sales weeks over the course of the summer, whilst the change in menu, as well as increasing the product quality, lead to an improvement to margin.

Late July also saw the launch of our new Tavolino brand at Tower Bridge. Early indications were positive despite the lack of tourism and local office traffic, giving encouragement 

for future trading.

COVID-19 MITIGATING ACTIONS AND FINANCIAL POSITION

During the pandemic, the Group has undertaken significant actions to mitigate the impact to its financial position, which were continued post year end into the current lockdown.  Actions included:

·             Immediately ceasing all non-essential spend

·             Transferring all site employees and a majority of head office employees on to the Coronavirus Job Retention Scheme All those not furloughed including at management and executive team level agreed to temporary salary reductions

·             Ongoing discussions with all suppliers and partners to extend

·             Initiated discussions with all landlords to agree a combination of rent waivers, deferrals and future variations/Covid Cesser clauses to amended leases

FINANCING COSTS

The preference share dividend was £nil in FY20 (2019 £3.9m) is a result of the debt for equity financial reorganistion during  FY19.

This reorganistation also resulted in a reduction in the period-end debt position (from £21.1m in FY19 to £12.4m in FY20) resulting in a reduction in interest payable of 40% to £1.3m.

IMPAIRMENTS

A detailed review of each individual site, has resulted in an impairment charge of £5.4m, split £3.6m against Goodwill, £0.1m against Leasehold improvements & PPE and £1.6m against Right-of-use assets. Detail of the methodology is included in notes 9 and 10.

LOSS ON DISPOSAL OF ASSETS & LEASES

In FY20, the Group disposed of the remaining non-trading Strada leases and associated assets.

IPO & RESTRUCTUING COSTS

These costs were incurred in the prior restructuring and execution of the Group's IPO. Further costs of £1.9m have been charged directly to reserves as they relate to the raising of equity.

DIVIDEND

The Directors do not recommend the payment of a dividend believing it more beneficial to use cash resources to invest in the Group in line with our strategy.

CASHFLOW & BALANCE SHEET

As communicated above, the Group undertook significant actions to mitigate the impact of the pandemic on its financial position.

During the period, the Group invested £5.1m in capital expenditure in support of future growth.

In September, the Group undertook a financial restructuring and following a successful IPO on the AiM market, raised net proceeds of £23.2m. With an interim insurance payment of £2.5m also received post period end, the liquidity of the company remains strong to continue to follow the expansion strategy.

KEY PERFORMANCE INDICATORS ("KPIs")

The Board reviews numerous indicators of performance on a monthly basis. The 2 historically used are Revenue £16.5m (2019: £25.6m) and Trading EBITDA (£0.8m) (2019: £2.3m) with both severely impacted by the conditions faced by the Group in the period. With the debt restructure and successful flotation on the AiM Market during the period, the net asset position of the Group at the period end was £27.2m (2019: net liabilities (£6.4m)). Going forward, as the Group's strategy evolves, further KPIs will be used to measure the progress including New site openings and Like-for-like sales growth.

Oli Williams

CFO

Various Eateries PLC

Consolidated Statement of Comprehensive Income

for the 52 weeks ended 27 September 2020

The above results were derived from continuing operations.

There are no items of comprehensive income other than the loss for the period and therefore, no separate statement of comprehensive income is presented.

Various Eateries PLC

Consolidated Statement of Financial Position