Comptoir : FY Results announcement 2018

9 April 2018

Comptoir Group plc

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

Full Year audited results for the financial year ended 31 December 2018

Financial Highlights

•Group revenue increased 16.1% to £34.3m (2017 - £29.6m).

•Gross profit increased 16.0% to £24.7m (2017 - £21.3m).

•IFRS loss before tax of £0.21m (2017 - £0.46m profit).

•Adjusted EBITDA* of £2.1m (2017 - £1.1m).

•Net cash and cash equivalents at the period end of £4.6m (2017: £5.4m).

•Loss per share of 0.26p (2017 - 0.39p positive earnings per share).

•Three new restaurants, two 'owned' and one franchised opened in the year (2017 - four 'owned' restaurant openings). One 'pop up' site closed at the end of a short-term lease.

•31 restaurants (27 owned and 4 franchise) trading as at 31 December 2018 (2017 - 29 restaurants; 26 owned and 3 franchise).

Chaker Hanna, Chief Executive Officer, commented:

"Trading for the year to date has continued to be in line with Board expectations, and we anticipate this momentum will continue into the second quarter of 2019.

Like for like sales growth has continued each month as newer restaurants reach anticipated maturity levels and the Company is continuing to take a cautious approach to selecting new site openings, enabling focus on the existing estate and further development of the brand whilst ensuring the most efficient operating model is maintained.

The Directors believe the Group's current Comptoir Libanais restaurant estate continues to have significant potential for organic growth and will continue to explore further franchise opportunities, alongside the already agreed terms reported at the half-year results to open three additional franchised sites with HMS Host in the second half of 2019; in Ashford (Kent) and our second and third international franchised operations in Dubai and Abu Dhabi Airports."

*Adjusted EBITDA is calculated excluding the impact of a £0.03m share-based payment charge (2017 - £0.16m credit); depreciation, amortisation and impairment of assets of £1.8m (2017 - £1.5m); £nil profit on the sale of freehold property (2017 - £1.3m); and £0.4m restaurant pre and post opening costs (2017 - £0.5m).

Enquiries:
Comptoir Group plc
Chaker Hanna, CEO	Tel: [phone]
Mark Carrick, CFO	Tel: [phone]

Canaccord Genuity (NOMAD and Broker)	Tel: [phone]
Bobbie Hilliam
Georgina McCooke

Chairman's Statement

For the year ended 31 December 2018

Overview

The Board is pleased to announce that despite the challenging trading conditions, the financial outcome for 2018 was in line with expectations and the Group has demonstrated its resilience to deliver during the uncertain retail environment.

Revenue for 2018 showed strong growth on last year, profit was in line with expectations and the Company ended the year with a healthy cash balance. This was achieved despite cost pressures within the industry.

The Board does not recommend the payment of any dividend at this time, as it is anticipated that all available funds will be required for investment in new restaurants or the existing estate for the foreseeable future.

Growth in operations

The Group has continued to deliver on its plan for expansion, opening 3 new restaurants in the year ended 31 December 2018 and closing just one site, which came to the end of its short lease. The Group now has 31 restaurants, including four franchise sites.

In line with the continued challenging trading conditions, the Board continues its prudent approach to new openings and only currently has plans to open one more owned restaurant and three new franchise sites in 2019. This will enable continual investment and focus on the existing sites and further development of the Group's brands.

People

We continue to appreciate that our people are key to the success of our business. We have further strengthened the Board with the appointment of Mark Carrick as Chief Financial Officer and our highly experienced and motivated Executive Team have enabled execution of a sustained focus and delivery on performance during the year.

To develop and protect our business further we maintain strong corporate governance standards through the Board, which meets on a regular basis and it has already made substantial progress in fulfilling its corporate governance aims.

We continue to rely on the commitment and dedication of our fantastic support and operational teams, in our restaurants around the country, whose ultimate aim is to consistently deliver a fantastic experience for all our customers in an environment with a genuine feel of family hospitality.

On that note I would like to personally thank all of our teams and colleagues across the Company; they are a remarkable group of people and we are privileged to witness their efforts and enjoyment in working for Comptoir.

Looking ahead

The Group intends to focus heavily on ensuring that all sites are operating effectively, with a particular focus on the newer restaurants.

We continue to see the cautiousness of consumers and coupled with the uncertainties surrounding the UK's exit from the European Union. The Directors remain confident in the restaurant brands of the Group and its relevance within the eating-out market as consumers seek a differentiated food and service experience.

Richard Kleiner

Chairman

8 April 2019

Chief Executive's review

For the year ended 31 December 2018

I am pleased to present the Group's results for the year ended 31 December 2018, together with an update on the Group's progress in respect of its growth strategy. We have continued our expansion plan and opened two new owned restaurants as well as adding an additional franchise site to the Group's portfolio.

During the year revenue has grown by 16% to £34.3m (2017 - £29.6m), with adjusted EBITDA (excluding one-off costs incurred in opening new restaurants and other highlighted items) increasing by 83% to £2.1m (2017 - £1.1m). The significant increase in adjusted EBITDA demonstrates the strong performance of our established restaurants.

The adjusted EBITDA takes into consideration increases in administrative costs, which were incurred following the opening of new restaurants during 2017 and 2018. While the Directors are pleased with the progress of the new restaurants, these sites are still establishing themselves with time required to reach maturity. In view of the number of new restaurants the group has opened in recent years that are still in their growth stages, as well as the challenging economic conditions that continued throughout 2018, we are pleased with our results and are positive on our future performance.

The Consolidated Statement of Comprehensive Income for the year shows a pre-tax loss of £0.21m (2017 - £0.46m profit). After adding back non-trading items, including opening costs totalling £0.4m (2017 - £0.5m), the adjusted EBITDA for the group totalled £2.1m (2017 - £1.1m).

Our strong balance sheet is currently de-levered specifically to protect against any downside risk on future covenants and give us scope for assurance and flexibility to sensibly use free cash for selective new site acquisitions or re-investment in the current estate.

Review of operations

We continued to feel the cost pressures in the supply chain throughout the year, including the ongoing effect of the National Living Wage and Apprenticeship Levy. Despite this, costs were controlled carefully by management meaning that restaurants perform well financially once they have reached maturity of trading, as demonstrated by the strength of the Group's adjusted results.

Economic conditions have remained challenging in 2018 and confidence levels have remained subdued due to continued uncertainty around Brexit and the economic outlook as a whole. The general retail sector has witnessed a continued decline in high street footfall which has directly impacted the dining-out sector, however, we are still able to report like for like sales growth each month throughout the year. Further pressures include continued rising costs (particularly labour), input food costs and property related charges.

Despite these pressures, we have continued to convert our top line growth into EBITDA in line with our full year expectations as a result of the focus on operating efficiencies and the increasing yield from the maturing site acquisitions made in 2017 and early 2018.

The investment in our people has been further enhanced in 2018 with development programmes now being made available to our employees through a partnership with Evolve Training. This is supported by funding from the Apprenticeship Levy contributions.

Estate development

During the year, we opened two new Comptoir Libanais restaurants; Birmingham located in Grand Central (March 2018) and London Bridge (November 2018) located in a prime redevelopment of this key central mainline train station, adjacent to an entrance into the station concourse. Both of these new site locations benefit from high city footfall. We are also pleased to report an addition to our franchise sites with a new site opening in Cheshire Oaks (November 2018), operated by HMS Host.

In 2018 we took the opportunity to invest in refurbishing some of our existing matured restaurants to give a fresh look and innovation with new designs. This included refurbishment of Yalla Yalla Soho, South Kensington and the extension of the trading area in our Yalla Yalla Winsley Street site into an adjoining space, with a resulting significant increase in available covers at the restaurant.

During 2019 we will continue to selectively invest on a return focused basis, in our sites, with six sites earmarked for some capital investment over the year. These sites are Levant, Kenza, Chelsea, Stratford, Kingston and Wigmore Street. In addition to this, following the closure of our Comptoir site in Westfield, Shepherd's Bush in January 2019 due to the extensive redevelopment of the centre, we are excited to announce that we will be opening a brand new re-positioned Comptoir site on completion of the centre's development works in May 2019.

In line with our approach in 2018, we continue to develop our property pipeline with some caution. One further owned site is currently planned to open in 2019. As reported at the half-year, we continue to work closely with our franchise partners and have already agreed terms to open three additional franchised sites with HMS Host in the second half of 2019; in Ashford (Kent) and our second and third international franchised operations in Dubai and Abu Dhabi Airports.

Cashflows and financing

Cash generated from operations was £2.1m (2017 - £1.5m), demonstrating the continued management focus and effectiveness of tightened working capital management initiatives.

Capital expenditure for the year, which was principally incurred on the fitting-out of the two new restaurants in Birmingham and London Bridge, as well as selective investment in refurbishment in a number of sites, totalled £2.3m (2017 - £2.8m).

Loan and finance lease repayments continued as planned throughout the year, resulting in total cash outflows of £0.6m (2017 - £0.6m). The Group realised an overall cash outflow of £0.8m (2017 - £4.6m cash inflow); however, 2017 included the cash inflow from an equity placing raising £4.0m (before costs). At the end of the year, the Group had cash and cash equivalents of £4.6m (2017 - £5.4m).

The Group is in a strong position to fund the additional further owned restaurant opening in 2019 and to continue to further develop the Group's brand and identity.

Outlook

The Group has had an encouraging start to 2019 and we hope to continue benefiting from this momentum during the first half of 2019, with like for like sales growth continuing in each month of the first quarter of 2019.

We are in a time of unprecedented political and general uncertainty across the UK economy. Whilst we cannot be immune to the impact that this uncertainty may have on the economy as a whole, the Group has proven its resilience and is in a strong financial and cash position, taking a cautious approach to selecting new site openings, enabling focus on the existing estate and further development of the brand whilst ensuring the most efficient operating model is maintained.

The Directors believe the Group's current Comptoir Libanais restaurant estate continues to have significant potential for organic growth and will continue to explore further franchise opportunities.

I strongly believe our business is well positioned in the restaurant sector and can continue to provide our customers with a unique experience, offering excellent quality, well-priced, healthy food, with welcoming family hospitality, differentiated to many other restaurant operations.

Chaker Hanna

Chief Executive Officer

8 April 2019