Half Year Results

Template
Results announcement
(for Equity Security issuer/Equity and Debt Security issuer)
Updated as at 17 October 2019

12369133_1


Results for announcement to the market
Name of issuer Cooks Global Foods Limited
Reporting Period 6 months to 30 September 2020
Previous Reporting Period 6 months to 30 September 2019
Currency NZD
Amount (000s) Percentage change
Revenue from continuing
operations
$1,641 -21.2%
Total Revenue $1,919 -50.7%
Net profit/(loss) from
continuing operations
$(1,041) 27.3%
Total net profit/(loss) $(1,207) 18.9%
Interim/Final Dividend
Amount per Quoted Equity
Security
$0.00
Imputed amount per Quoted
Equity Security
$0.00
Record Date Not Applicable
Dividend Payment Date Not Applicable
Current period Prior comparable period
Net tangible assets per
Quoted Equity Security
(0.55) cents (1.35) cents
A brief explanation of any of
the figures above necessary
to enable the figures to be
understood
Please see attached Half Year Report

Authority for this announcement
Name of person

authorised
to make this announcement
Keith Jackson

Contact person for this
announcement
Keith Jackson

Contact phone number +6421702509
Contact email address
keith.jackson@cookglobalfoods.com

Date of release through MAP

30/11/2020


Unaudited financial statements accompany this announcement.

---

1








COOKS GLOBAL FOODS LIMITED
INTERIM REPORT
For the 6 months to 30 September 2020

2

Executive Chairman’s Report


The first half of FY21 financial year was dominated by the impact of Covid-19 that slowed the positive
momentum that the company had built up at the end of the FY20 year. Despite the Coivd-19 lockdowns
and the other related implications which reduced group sales by 50% from $3.8 million to $1.9 million
compared to the same period last year the net operating loss increased only slightly from $0.6 million to
$0.8 million and the overall loss from continuing operations reduced by $391k from ($1,432)k last year to
($1,041)k in FY21. The comprehensive loss reduced by $708k from ($1,743)k to ($1,035)k. This
performance reflects the restructuring changes in the business that are being realized along with the impact
of positive government support packages relating to Covid-19 plus the positive impact of the performance
of Triple Two Coffee in the UK that was acquired in June 2020.

Whilst difficult to quantify exactly, the store closures and a period of time where stores were only able to partially open
with takeout and delivery only saw lost store sales of an estimated $10 million for the 6 months in the core markets of
UK & Ireland. This translated directly to significantly reduced revenue from Royalties & product related rebates for the
period and indirectly to the delay in new franchisees being acquired and new stores being opened and that were
planned pre Covid-19. The company is confident that this growth trend will be recovered in FY22 and beyond as we
are predicting a return to pre-Covid-19 trading from Q2 in 2021 onwards.


During the first half of the financial year the company focused on strengthening the core businesses with
the sale of the Scarborough Fair business in New Zealand & Australia plus the acquisition of Triple Two in
the UK.


STATEMENT OF FINANCIAL POSITION

At the end of the financial period the company had a positive bank balance of $1.9 million.

Borrowings excluding IFRS16 adjustments for leases and contingent earn-out for acquiring Triple Two
Coffee increased to $7 million from $5.5 million from last financial year. The increase includes additional
loans from entities associated with Keith Jackson as well as certain convertible loan notes. Cooks continues
to pursue alternative funding options to better reflect the appropriate mix of equity and debt requirements
for the business.


OUTLOOK

The Directors are confident about the prospects for the business in the year ahead. Despite the impact of
Covid-19 on the sector in general we have been encouraged by the resilience shown by the business in
the post lockdown trading in UK & Ireland through the July – October period when outlets were allowed to
open in an almost normal manner.

Restructuring initiatives instituted last year have delivered real benefits in the first half of the FY21 financial
year and further benefits will be realized in the second half.


BUSINESS PERFORMANCE

THE UNITED KINGDOM

ESQUIRES BRAND

UK store numbers were 47 at the end of September up from 43 at the end of March 2020. Coffee store
sales for the six months were down 42% on the prior year with transactions down 55% and the average
transaction value up 28%. During the period most stores were closed for the April – June period and gradual
re-opening was permitted for takeout only and with a more general reopening with sit in options available
permitted from the first week in July.

3


At the end of September, the company had 10 stores open that were not open at the same time last year
reflecting the strong new store program that is in place although due to the Covid influence the timing of
opening for most of the new stores has been delayed by an average of 3-6 months.

Stores reopened at various times during July and for the months of August & September store sales were
18% up on the same period last year with transactions down 11% and the average transaction value up
32% on the prior year to $12.97 reflecting the recovery in people wishing to reconnect with family & friends
plus government programs such as Eat Out to Help Out (EOHO) that operated for Mondays- Wednesdays
in August along with the reduction in VAT from 20% to 5% for hospitality purchases. The EOHO was limited
to August but the VAT reduction will continue until the end of March 2021. Since the cessation of the EOHO
program the transaction value has remained at the higher level as the company has adjusted its food
offering to meet the changing consumer requirements.

TRIPLE TWO BRAND

Triple Two is a rapidly growing brand that joined the group on 19
th
June 2020. At the end of September
there were 12 stores operating and 2 more joined in October but were outside the reporting period. The
brand expects to have more than 20 stores open by the end of March 2020.

The brand promise is “Real Food, Awesome Coffee” & the Mission as set out on the company’s website
states:

“Our Mission Was Simple
1. To create a unique and highly appealing brand, with an interior to deliver justice to the branding.
2. To source a speciality quality coffee and make sure our baristas can execute it to the level required,
whilst still providing the high street prices.
3. To make food from our kitchens all day, every day, and deliver nothing other than the absolute best to
our customers, without compromise.”

The Triple Two brand philosophy and culture fits well alongside the Esquires positioning in the UK and
the combined entity with currently more than 60 outlets open places the company within the top 5 coffee
focused chains in the UK according to Allegra Research.


IRELAND

Store sales in Ireland for the six months were down 55% on last year with transactions down by 57% and
the average value per transaction up by 6%. During the period, most stores were closed for most of the
April to June period. Irish stores were permitted to open for sit down dining and in café seating from the
last week in June until mid October, and by late in July most stores were operating in a near normal
situation. For the months of August & September sales were down 19% on last year with transactions down
24% and the average value per transaction up 7%.

City centre stores in Dublin were significantly impacted by the combined effects of the absence of tourists
and the lack of workers in the CBD area and sales for the August / September period were 31% of last year
whereas for the cities outside Dublin the central city stores were 76% of last year. Retail Parks outside
Dublin were 100% of last year v 80% for the Dublin store. Mall stores were 78% of last year which is
encouraging as Mall seating was reduced from last year in the Malls with Malls being open for 6 days v the
normal seven and at reduced hours.

The Irish Government imposed lockdowns again from mid-October for at least a six-week period with re-
opening due to commence from 4
th
December.

4


GLOBAL
Sales in the Middle East, Pakistan, Indonesia & Canada reflected the trends in UK & Ireland and various
government lockdowns were applied across the estate. These have almost all been lifted from September
and trading is variable within a band of 80% - 110% of last year.

SUPPLY

The Scarborough Fair retail coffee & tea business was sold in July and details are included in the
discontinued segment. Crux Products business was flat due to issues with international shipping that have
delayed growth plans until there is more certainty around timetables and cost.

CORPORATE COSTS

Corporate cash costs reduced by 26% to $438k for the period, a saving of $150k. We expect this cost to
further reduce in the second half of the year as the restructuring benefits come to fruition. With the sale of
Scarborough Fair and the outsourcing of the finance function the existing corporate office had surplus
space and we were able to assign the lease for the remaining period thereby reducing further the fixed
costs.


SUMMARY
The company is encouraged by the performance in the first half of FY21 where in an environment where
stores were closed for long periods of time the recovery once we were able to re-open has been very
positive. Government support programs have assisted offset some of the impact but do not cover the
projected performance that had been budgeted for pre Covid-19.

The new corporate overhead cost structure will be fully implemented from the first half of FY22 and this will
further reduce the breakeven point significantly. The cost reductions along with the enhanced scale from
the Triple Two acquisition and growth in UK & Ireland will put the company in a solid position to deliver
positive results in FY22 assuming that the Covid-19 related trading patterns return to a more normal pattern
from Q2 2021.

5

APPENDIX

The following are Non-GAAP reporting metrics which are used in this update:

Network (Store) Sales

Total store sales are the aggregate of sales of all Esquires branded coffee stores, whether franchised or
owned, across the company’s global brand network. Cooks derives income from its franchised stores from
franchise related fees, primarily related to these sales levels as well as store sales for those stores directly
owned by the company. Total network store sales, therefore, have a correlation to the portion of revenue
earned by Cooks Global Foods relating to recurring franchise fees. However, they are not and should not
be confused with the revenue of Cooks Global Foods which is reported in its financial statements as the
two do not directly correlate.

Same Store Sales

Same store sales are the aggregate of all Esquires-branded coffee stores, whether franchised or owned
across the company’s global brand network that have been operational for at least a full two-year period
for the purposes of like-for-like comparison between current and prior periods. The metric measures the
improvement in existing store sales within the brand network, excluding new stores opened in the previous
24 months. Same store sales are not the same as revenue in the financial statements for Cooks Global
Foods group but can indicate stable revenue growth in the brand network.

Constant Currency Network Store Sales

All references to sales and transaction values in this report are constant currency. This means prior year
figures are converted at the same exchange rate as the current year to eliminate the effects of foreign
exchange rate fluctuations.

Transactions

Transactions relate to the total individual transactions, which occur within Esquires branded coffee stores,
whether franchised or owned. A transaction is defined as a single financial transaction for food, beverage
or product that is processed through the point-of-sale system within a coffee store.

Average Transaction Value

Average transaction values are derived by dividing total Esquires coffee store sales by total transactions
recorded over the period.

Total (Store) network

All stores whether owned (in full or as part of an associate, such as in the case of the China business) or
franchised, which operate under a brand owned by companies within the Cooks Global Foods Group.

Cooks Global Foods Limited
Unaudited Condensed Interim Statement of Comprehensive Income
For the six months ended 30 September 2020
6



30 September 30 September

2020 2019
Notes $'000 $'000
Continuing operations
Revenue 1,641 2,083
Other income - 2
Raw materials and consumables used (138) (74)
Depreciation and amortisation (80) (89)
Property related costs (220) (276)
Net foreign exchange (losses)/gains (29) 145
Employee costs (881) (1,206)
Other expenses (1,001) (1,075)
Operating profit/(loss) (708) (491)
Finance costs (333) (672)
Share of net loss of associate accounted for using the equity method - (269)
Loss before income tax (1,041) (1,432)
Income tax (expense)/credit - -
Loss for the year from continuing operations (1,041) (1,432)
Net loss for the year from discontinued operations (166) (57)
Net loss for the year (1,207) (1,489)
Loss attributable to:
- Shareholders of the parent (1,221) (1,484)
- non-controlling interests 14 (5)
(1,207) (1,489)
Other comprehensive income
Items that may be subsequently reclassified to profit or loss
Change in foreign currency translation reserve 172 (254)
Other comprehensive income after tax 172 (254)

Total comprehensive loss for the year (1,035) (1,743)

Attributable to:
- Shareholders of the parent (1,049) (1,738)
- non-controlling interests 14 (5)
(1,035) (1,743)
Total comprehensive loss for the year attributable to Shareholders of
the parent arises from:

- Continuing operations (869) (1,686)
- Discontinued operations (166) (57)
(1,035) (1,743)

Loss per share:
Basic and diluted loss per share (New Zealand Cents) from continuing and
discontinued operations: 2 (0.19) (0.30)
Basic and diluted loss per share (New Zealand Cents) from continuing
operations: 2 (0.16) (0.29)
Basic and diluted loss per share (New Zealand Cents) from discontinued
operations: 2 (0.03) (0.01)











The attached notes form part of, and are to be read in conjunction with these financial statements

Cooks Global Foods Limited
Unaudited Condensed Interim Statement of Change in Equity
For the six months ended 30 September 2020
7



Attributable to Equity holders of the Company

Share
Capital
Foreign
currency
translation
reserve
Share
based
payment
reserve
Accumulated
Losses Total
Non-
controlling
interest
Total
Equity
$'000 $'000 $'000 $'000 $'000 $'000 $'000


Balance at 1 April 2019 42,517 249 2,163 (48,550) (3,621) (78) (3,699)
Comprehensive loss for the year
Loss for the year

-

-

-
(5,208) (5,208) 25 (5,183)
Other comprehensive income

Items that may be subsequently reclassified
to profit or loss:

Change in foreign currency translation reserve

-
(99)

-

-
(99)

-
(99)
Change in share based payment reserve

-

-

238

-
238

-
238
Total comprehensive income/(loss) for the
year
- (99) 238 (5,208) (5,069) 25 (5,044)

Transactions with owners of the Company
Ordinary shares to be issued 3,032 - - - 3,032 - 3,032
Total contributions by owners of the
Company
3,032 - - - 3,032 - 3,032

Balance at 31 March 2020 45,549 150 2,401 (53,758) (5,658) (53) (5,711)

Balance at 1 April 2020 45,549 150 2,401 (53,758) (5,658) (53) (5,711)

Comprehensive loss for the year
Loss for the year

-

-

-
(1,221) (1,221) 14 (1,207)
Other comprehensive income
Items that may be subsequently reclassified
to profit or loss:

Change in foreign currency translation reserve

-
172

-

-
172

-
172
Total comprehensive income/(loss) for the
year

-
172

-
(1,221) (1,049) 14 (1,035)

Transactions with owners of the Company
Issue of ordinary shares 6,671 - - - 6,671 - 6,671
Total contributions by owners of the
Company
6,671 - - - 6,671 - 6,671

Balance at 30 September 2020 52,220 322 2,401 (54,979) (36) (39) (75)










The attached notes form part of, and are to be read in conjunction with these financial statements

Cooks Global Foods Limited
Unaudited Condensed Interim Statement of Financial Position
For the six months ended 30 September 2020
8



30 September 31 March

2020 2020
Notes $'000 $'000

Current Assets
Cash and cash equivalents 1,862 255
Trade and other receivables 4,421 951
Inventories 25 53
Lease receivables 1,726 1,670
Other current assets 317 608
Assets classified as held-for-sale 359 422
Current Assets 8,710 3,959

Non-Current Assets
Goodwill 17,297 -
Intangible assets 2,835 2,840
Property, plant and equipment 510 145
Right-of-use assets 2,103 2,468
Lease receivables 16,572 16,653
Other non-current financial assets 746 15
Non-current assets 40,063 22,121

Total Assets 48,773 26,080

Liabilities
Current Liabilities
Trade and other payables 8,355 3,996
Deferred Revenue 103 211
Lease liabilities 2,133 2,112
Borrowings and other liabilities 3,336 3,431
Current liabilities 13,927 9,750

Non-Current Liabilities
Deferred Revenue 1,158 1,192
Lease liabilities 18,388 18,758
Borrowings and other liabilities 15,375 2,091
Non-current liabilities 34,921 22,041

Total Liabilities 48,848 31,791

Net Assets/(Liabilities) (75) (5,711)

Equity
Share capital 4 52,220 45,549
Accumulated losses (54,979) (53,758)
Foreign currency translation reserve 322 150
Share based equity reserve 2,401 2,401
Equity attributable to owners of the parent (36) (5,658)
Non-controlling interests (39) (53)
Total equity (75) (5,711)




The attached notes form part of, and are to be read in conjunction with these financial statements.

Cooks Global Foods Limited
Unaudited Condensed Interim Statement of Cash Flows
For the six months ended 30 September 2020

9



30-Sep 31-Mar

2020 2020

Notes $'000 $'000


Operating activities


Cash was provided from:
Receipts from customers 4,252 12,824
Cash was applied to:
Interest cost (707) (1,414)
Payments to suppliers & employees (2,977) (11,217)

Net cash provided from/(applied to) operating activities 568 193


Investing activities

Cash was provided from:
Disposal of discontinued operation, net of cash disposed of 158 -
Acquisition of subsidiary, net of cash acquired 643 -
Cash was applied to:
Purchase of property, plant and equipment (307) (80)
Acquisition of intangible assets - (8)

Net cash provided from/(applied to) investing activities 494 (88)

Financing activities

Cash was provided from:
Proceeds from borrowings 953 1,712
Cash was applied to:
Principal elements of lease payments (345) (1,855)
Repayment of borrowings (74) -

Net cash provided from/(applied to) financing activities 534 (143)

Net increase/(decrease) in cash and cash equivalents held 1,596 (38)
Cash & cash equivalents at beginning of the year 255 302
Effect of exchange rate changes on foreign currency balances (11) (9)
Cash & cash equivalents at end of the year 1,862 255

Composition of cash and cash equivalents:
Bank balances 1,862 255
1,862 255












The attached notes form part of, and are to be read in conjunction with these financial statements.

Cooks Global Foods Limited
Unaudited Condensed Interim Statement of Cash Flows
For the six months ended 30 September 2020

10

The following is a reconciliation between loss after taxation for the period shown in the statement of
comprehensive income and net cash flows from operating activities.



30-Sep 31-Mar

2020 2020

$'000 $'000


Loss after tax
(1,207) (5,183)


Add non-cash items:
Depreciation and amortisation 80 760
Share of losses of associate - 168
Impairment of investment in associate - 2,520
Add/(Less) movements in assets/liabilities:
Inventories 28 166
Trade and other receivables (2,130) (655)
Lease receivables (56) 1,427
Other short-term assets 354 153
Trade payables 3,681 (7)
Other liabilities (74) 750
Contract liabilities (108) 94
Net cash flow applied to operating activities 568 193


































The attached notes form part of, and are to be read in conjunction with these financial statements.

Cooks Global Foods Limited
Notes to and forming part of the Unaudited Interim Financial Statements
For the six months ended 30 September 2020
11


Management currently identifies the Group’s products and service lines in various geographical locations as its
operating segments.

The franchise coffee store business, operating under the Esquires brand, covers geographic segments in the UK,
Ireland and Global (covering the NZ Franchise trading entity and all regions owned by third party Master Franchisees).
Principal income streams for the franchise business are royalties, coffee product and other retail sales, design and
other franchise fees. The supply segment represents the supply of tea/coffee/beverages (through the Scarborough
Fair business) and facilitates trade between China and New Zealand and other countries (using its Crux Products
business).

Segment information for the reporting period is as follows:

Continuing operations
30 September 2020

Global
franchising
& design
UK
franchising
Middle
East
franchising
& retail
Europe
franchising
& retail Supply Corporate Total
Global operational splits $'000 $'000 $'000 $'000 $'000 $'000 $'000

Revenue 68 1,160 (6) 350 22 47 1,641
Other income - - - - - - -
Raw materials and
consumables used - (138) - - - - (138)
Depreciation and amortisation (5) (31) - (3) - (41) (80)
Property related costs - (196) - (13) - (11) (220)
Net foreign exchange
(losses)/gains (29) - - - - - (29)
Employee costs (76) (460) - (168) (8) (169) (881)
Other expenses (91) (433) - (219) - (258) (1,002)
Operating (loss)/profit (133) (98) (6) (53) 14 (432) (709)
Finance costs - (4) - (1) - (328) (333)
Share of net loss of associate
accounted for using the equity
method - - - - - - -
Loss before income tax (133) (102) (6) (54) 14 (760) (1,041)
Income tax (expense)/credit - - - - - - -
Loss for the year from
continuing operations (133) (102) (6) (54) 14 (760) (1,041)

Non-current assets
Intangible assets 42 845 - 467 - 1,481 2,835
Property, plant and equipment 13 453 - 25 - 19 510



Discontinued operations
30 September 2020

UK
retail
USA
franchising &
retail Supply Total
Global operational splits $'000 $'000 $'000 $'000

Revenue 157 - 121 278
Other income - - 95 95
Raw materials and consumables used (44) - (126) (170)
Depreciation and amortisation (215) - - (215)
Property related costs 4 - - 4
Net foreign exchange (losses)/gains - - 3 3
Employee costs (63) - (4) (67)
Other expenses (46) 4 6 (36)
Operating (loss)/profit (207) 4 95 (108)
Finance costs (57) - (1) (58)
Share of net loss of associate accounted for using
the equity method - - - -
Loss before income tax (264) 4 94 (166)
Income tax (expense)/credit - - - -
Loss for the year from discontinued operations (264) 4 94 (166)

Non-current assets
Intangible assets - - - -
Assets held for Sale 379 - 43 422

Cooks Global Foods Limited
Notes to and forming part of the Unaudited Interim Financial Statements
For the six months ended 30 September 2020
12




Continuing operations
30 September 2019

Global
franchising
& design
UK
franchising
Middle East
franchising
& retail
Europe
franchising
& retail
Supply Corporate
Total
Global operational
splits $'000 $'000 $'000 $'000 $'000 $'000 $'000

Revenue 79 918 16 966 104 - 2,083
Other income - - - - - 2 2
Raw materials and
consumables used (1) (3) - (3) (67) - (74)
Depreciation and
amortisation (12) (34) - (3) - (40) (89)
Property related costs (209) 8 - 222 - (297) (276)
Net foreign exchange
(losses)/gains 140 (45) - (149) - 199 145
Employee costs (449) 192 (520) 1,255 (7) (1,677) (1,206)
Other expenses (1,206) 207 91 1,209 241 (1,617) (1,075)
Operating (loss)/profit (1,658) 1,242 (412) 3,497 270 (3,430) (491)


Finance costs (233) 8 (233) 496 (46) (663) (672)
Share of net loss of
associate accounted for
using the equity method (269) - - - - (269)
Loss before income
tax (2,160) 1,250 (646) 3,993 224 (4,093) (1,432)
Income tax
(expense)/credit - - - - - - -
Loss for the year from
continuing operations (2,160) 1,250 (646) 3,993 224 (4,093) (1,432)

Non-current assets
Intangible assets 62 873 - 482 - 1,505 2,922
Property, plant and
equipment 17 472 - 25 2 420 936



Discontinued operations
30 September 2019
UK retail
USA
franchising &
retail Supply Total
Global operational splits $'000 $'000 $'000 $'000

Revenue 1,169 - 639 1,808
Other income - - - -
Raw materials and consumables used (302) - (606) (908)
Depreciation and amortisation (228) - (2) (230)
Property related costs 60 - (63) (3)
Net foreign exchange (losses)/gains - - 42 42
Employee costs 192 (213) (349) (371)
Other expenses 162 (23) (584) (445)
Operating (loss)/profit 1,052 (235) (923) (106)
Finance costs 144 - (94) 49
Share of net loss of associate accounted
for using the equity method - - - -
Loss before income tax 1,196 (235) (1,018) (57)
Income tax (expense)/credit
- - - -
Loss for the year from discontinued
operations 1,196 (235) (1,018) (57)

Non-current assets
Intangible assets - - - -
Assets held for Sale 2,486 - 9 2,495

Cooks Global Foods Limited
Notes to and forming part of the Unaudited Interim Financial Statements
For the six months ended 30 September 2020
13


1. General information

Cooks Global Foods Limited (“Company” or “Parent”), together with its subsidiaries (the “Group”)
operate in the food and beverage industry.

The Company is a limited liability company incorporated and domiciled in New Zealand and is listed on
the NZX Main Market board of the New Zealand stock exchange.

Statutory base
The Company is registered under the Companies Act 1993 and is a FMC reporting entity under part 7
of the Financial Markets Conduct Act 2013.

Reporting framework
The unaudited interim financial statements have been prepared in accordance with New Zealand
Generally Accepted Accounting Practice (NZ GAAP). They comply with New Zealand equivalents to
International Financial Reporting Standards (“IFRS”) and other applicable New Zealand Reporting
Standards as appropriate for profit-oriented entities. The financial statements comply with IFRS. These
policies have been consistently applied to all periods presented, unless otherwise noted.

These financial statements for the six months ended 30 September 2020 have been prepared in
accordance with NZ IAS 34, Interim Financial Reporting and should be read in conjunction with the
financial statements published in the Annual Report for the year ended 31 March 2020. They also
comply with the International Accounting Standard 34 interim Financial Reporting (IAS 34).


2. Changes in significant accounting policies

Except as described below, the accounting policies applied by the Group in these consolidated interim
financial statements are the same as those applied by the Group in its consolidated financial statements
for the year ended 31 March 2020. The Group has not applied any standards, amendments and
interpretations that are not yet effective.


3. Loss per share

Basic loss per share is calculated by dividing the loss attributable to ordinary shareholders of the
Company by the weighted average number of ordinary shares outstanding for the period.

Diluted loss per share is determined by dividing the loss attributable to ordinary shareholders and the
weighted average number of shares outstanding for the effects of any dilutive potential ordinary shares.

Net tangible assets per share is determined by dividing the net asset value of the Group, adjusted by
the intangible assets, and the number of shares issued at the end of the period.

The company issued 101,853,883 ordinary shares to acquire Triple Two Coffee at an issue price of
NZ$0.0655 per share on 19 June 2020.

No shares were cancelled during the period.

The company potentially can issue additional 11,301,951 shares at NZ$0.0655 subject to Triple Two
Coffee's EBITDA for the financial year ended 31 December 2020. This is the Second Completion
Payment forming the initial consideration for acquiring Triple Two Coffee. The company will pay out the
Second Completion Payment of NZ$740,278 in cash if the EBITDA for the financial year ended 31
December 2020 is NZ$850,575 or above. If the EBITDA is less than the above target, the Second
Completion Payment shall be payable by shares stated above.

Cooks Global Foods Limited
Notes to and forming part of the Unaudited Interim Financial Statements
For the six months ended 30 September 2020
14


As the condition subject to the EBITDA has not been met at the period ended 30 September 2020, the
company didn't include the contingently issuable shares in the calculations of the Basis EPS nor Diluted
EPS.


30-Sep-20 30-Sep-19

Weighted average ordinary shares issued 628,393,469 489,509,248
Basic and diluted loss per share (New
Zealand Cents) from continuing and
discontinued operations:
(0.19) (0.30)
Basic and diluted loss per share (New
Zealand Cents) from continuing operations:
(0.16) (0.29)
Basic and diluted loss per share (New
Zealand Cents) from discontinued
operations:
(0.03) (0.01)
Net tangible assets per share (New Zealand Cents)
(0.55) (1.35)



4. Share Capital

The share capital of Cooks Global Foods Limited consists of issued ordinary shares, each share
representing one vote at the company’s shareholder meetings. The par value is nil (2020: nil). All shares
are equally eligible to receive dividends and the repayment of capital.

Movements of share capital 30-Sep-20 31-Mar-20
Number of Shares issued:
No. of
Shares
No. of
Shares
Ordinary shares opening balance 525,979,949 489,509,248
Ordinary shares issued 101,853,883 36,470,701
Total ordinary shares authorised at 31 March 627,833,832 525,979,949

Movements of share capital 30-Sep-20 31-Mar-19
Value of Shares issued: $'000 $'000
Ordinary shares opening balance 45,549 42,517
Ordinary shares issued less share issue expenses 6,671 3,032
Total ordinary shares authorised at period end 52,220 45,549


At 30 September 2020, $nil of the ordinary share capital is unpaid (31 March 2020: $nil).


5. Related party transactions

The Group’s related parties include the directors and senior management personnel of the
Group and any associated parties as described below.

Unless otherwise stated, none of the transactions incorporate special terms and conditions and no
guarantees were given or received.

Keith Jackson is a director of Cooks Investment Holdings Limited, TRS Investments Limited, Dairy Farm
Investments Limited, Dairy Farm Investments (Ruawhata) Limited, Jackson & Associates Limited,
Weihai Station Limited and a trustee of Nikau Trust.

Mike Hutcheson is a director of Image Centre Limited and Lighthouse Ventures Holdings Limited.

Cooks Global Foods Limited
Notes to and forming part of the Unaudited Interim Financial Statements
For the six months ended 30 September 2020
15


Peihuan Wang is a director of Jiajiayue Holding Group Limited and Weihai Station Limited.

Tony McVerry is a director of Esquires Coffee Houses Ireland Limited.


Transactions with related parties
30-Sep 31-Mar
2020 2020
$'000 $'000
Purchases of goods and services
Purchase of management services - 180

Interest paid to related parties 39 341

Other transactions
Subscriptions for new ordinary shares - 2,668
Funding loans advanced by related parties 520 1,792


Balances outstanding with related parties
30-Sep 31-Mar
2020 2020
$'000 $'000
Outstanding balances arising from purchases of
goods and services
Entities controlled by key management personnel 457 457

Loans to/from related parties
Loans to related party
Beginning of the year - -
End of period - -

Loans from related party
Beginning of the year 2,894 2,621
Loans advanced 520 1,792
Reclassification from finance loans - 871
Satisfaction of related party receivables - (2,668)
Net foreign exchange effects - (50)
Interest charged 111 383
Interest paid (39) (55)
End of period 3,486 2,894


Director transactions


30-Sep 31-Mar


2020 2020
$'000 $'000
Directors fees
40 80
Salaries, wages and contractor payments
425 986
465 1,066

Cooks Global Foods Limited
Notes to and forming part of the Unaudited Interim Financial Statements
For the six months ended 30 September 2020
16


6. Capital Commitments, Contingent Liabilities

There were no capital commitments as at 30 September 2020 (31 March 2020: $nil).

There were no changes in capital commitments, contingent liabilities and contingent assets that would
require disclosure for the six months ended 30 September 2020 (31 March 2020: $nil).


7. Going Concern

The Group reported a loss of $1,207,000 (2019: $1,489,000) and operating cash inflows of $568,000
(2019: cash outflows of -$718,000) for the six-month period to 30 September 2020.

As at 30 September 2020 the Group has reported Net Liabilities of $75,000 (2019: Net Liabilities of
$5,286,000) and current liabilities exceed current assets by an amount of $5,217,000 (2019:
$6,237,000).

The ability of the Group to pay its debts as they fall due and to realise their assets and extinguish their
liabilities in the normal course of business at the amounts stated in the consolidated financial statements
has been considered by the Directors in the adoption of the going concern assumption during the
preparation of these financial statements.

The Directors forecast that the Group can manage its cash flow requirements at levels appropriate to
meet its cash commitments for the foreseeable future being a period of at least 12 months from the date
of authorisation of these consolidated financial statements. In reaching this conclusion, the Directors
have considered the achievability of the plans and assumptions underlying those forecasts. The key
assumptions include the:

• Group’s ability to successfully conclude present discussions regarding the roll-over of existing
debt (NZ$2.4 million).
• Group’s ability to successfully conclude the sale of at least one of the regional development areas
currently being offered for sale in the UK at a value that will realise at least NZ$450,000.
• Sale of one European Master Franchise Agreement for at least $350,000.
• Group’s ability to raise debt or equity funds as part of an overall strategy to re-gear the balance
sheet as part of the overall restructuring plan that is in progress.
• The ability of related parties of Keith Jackson to continue to provide funding as required
• Market conditions which the Group operates in, including impacts of Covid-19.
After considering the uncertainties described above the Directors have reasonable expectation that the
Group has sufficient headroom in its cash resources and shareholder support to allow the Group to
continue to operate for the foreseeable future or alternatively it can manage its working capital
requirements to create additional required headroom.

Any significant departure from the above assumptions may cast significant doubt over the ability to
continue as a going concern for the foreseeable future.

Whilst the Directors acknowledge that there are capital raising, credit, exchange and liquidity risks in
the global economic market in which the Group operates, they are confident that additional capital or
funding will be sourced by the Group. In particular, the Directors have received a confirmation from
related parties of Keith Jackson, that they will continue to financially support the Group for the
foreseeable future. They note the Group has a track record of obtaining financial support from
cornerstone investors and related parties and, where necessary, negotiating the deferment of debt
repayments.

The Directors are also confident that operating cash flows will continue to improve as a result of the
restructuring activities that have been undertaken, most recently with the sale of the Scarborough Fair

Cooks Global Foods Limited
Notes to and forming part of the Unaudited Interim Financial Statements
For the six months ended 30 September 2020
17


business in NZ along with reductions in corporate office costs, the acquisition of Triple Two in the United
Kingdom, to improve profitability and reduce the extent of cash outflow.

The Directors continue to consider other opportunities to further improve the Group’s cash position
which include discussing collaborations with partners overseas, negotiations with potential strategic
equity partners, investigating new facility lines, ongoing discussions in the UK and Ireland relating to


potential acquisitions, rationalising the business wherever possible to concentrate on core business
activity and greater focus on improving existing core business activities.

After taking into account all available information, the Directors have concluded that there are
reasonable grounds to believe that the forecasts and plans are achievable, the Group will be able to
pay its debts as and when they become due and payable, there is sufficient headroom in available cash
resources, and the basis of preparation of the financial report on a going concern basis is appropriate.

Should the Group be unable to continue as a going concern it may be required to realise its assets and
discharge its liabilities other than in the normal course of business and at amounts different to those
stated in the consolidated financial statements. The consolidated financial statements do not include
any adjustments relating to the recoverability and classification of asset carrying amounts or the amount
of liabilities that might result should the Group be unable to continue as a going concern and meets its
debts as and when they fall due.


8. Gain on Disposal of Discontinue Operation

In July 2020, the Group sold Scarborough Fair tea and Grounded coffee brands to Toasted Coffee
Roasters, an Auckland based specialty coffee roaster that was established in 2001.Cooks is confident
that the alignment of the Scarborough Fair & Grounded brands with Toasted Coffee Roasters
philosophy and commitment will provide an exciting and successful new chapter for these high quality,
ethical brands with dedicated customers.

As disclosed in CGF’s preliminary results for the 12 months to 31 March 2020 with no café operations
in New Zealand that provided synergies for the FMCG business operated under the Scarborough Fair
tea and Grounded coffee brands it was determined that these were non-core.

The major focus of the Cooks business is on the operation of franchised cafés in UK, Ireland &
Europe and providing support to master franchise partners in the Middle East, Pakistan, Canada &
Indonesia.

Gain on disposal of discontinued operation was determined as follows:



NZD
‘000
Cash consideration received 158
Other consideration received -
Total consideration received 158

Cash disposed of -
Net cash inflow on disposal of discontinued operation 158

Net assets disposed (other than cash)
Stock in Trade 28
Intangibles - Capitalised expenses 35
63

Gain on disposal of discontinued operation 95

Cooks Global Foods Limited
Notes to and forming part of the Unaudited Interim Financial Statements
For the six months ended 30 September 2020
18


9. Business Combination during the period

TRIPLE TWO ACQUISITION

The Group acquired the fast growing Triple Two Café chain in June 2020. Triple Two Coffee franchises
13 cafes in the UK and has been one of the most highly recruited franchises in the UK since the start
of 2019. Triple Two currently operate across a number of regions in the UK, with the initial flagship
store opening in Swindon in August 2016. They now have several sites trading in major towns, cities
and shopping centres across the UK, such as London, Colchester, Oxford, Cheltenham, Cirencester
and Hove. Due to the unrivalled demand the brand has seen, there is currently a strong pipeline of
sites expected to open by the end of 2020.

Triple Two originated from seeing an opportunity in the market to create a brand where customers can
enjoy speciality quality coffee alongside freshly prepared grab and go style food in a relaxing, modern
and unique environment.

“The Triple Two model is to create a business that gives customers an experience where they can get
great coffee and fantastic food. We will also look to accelerate our focus in our 'cafe bar' style sites,
retail range, online coffee subscriptions and international expansion, with our first unit in Paris
anticipated to still open this year.”

The acquisition fits with building scale and critical mass in our core UK market area.

On 19
th
June 2020, CGF acquired 100% of the issued shares in Triple Two Coffee Holdings Limited,
Triple Two Coffee franchises 13 cafes in the UK, for consideration of 100% of the share capital in
exchange for 102 million CGF shares and £386,425. This cash payment is due in early 2021 and is
payable in shares if targeted EBITDA is not reached in 2020. There is an earn out provision whereby
the vendors can increase their consideration by improving on the performance in the base year which
was 2019. The acquisition is expected to increase the group’s market share and reduce cost through
economies of scale. The synergistic business will also provide profitability and add cashflow to the
Esquires Coffee UK Group.

The operating results and assets and liabilities of the acquired company has been consolidated to the
Group from 19
th
June 2020.

(i) Purchase consideration and fair value of net assets acquired

Details of the consideration transferred are:

Purchase consideration NZD ‘000
Cash payable 387
Shares issued 6,671

Contingent consideration 11,407
Total purchase consideration 18,465

100% of the share capital was acquired in exchange for CGF shares.

The price was being settled with an issue of 101,853,883 shares in Cooks at $0.0655 a share,
based on 7.25 times the underlying profit in 2019 of $1.029m which equates to the sum of
£3,477,825 (being 90% of 7.25 x the 2019 EBITDA).

The final price will be based on 7.25 times the best underlying profit achieved by Triple Two
over the four calendar years ending in 2022.

The provisionally determined fair values of the assets and liabilities of Triple Two Coffee
Holdings at the date of acquisition are as follows:

Cooks Global Foods Limited
Notes to and forming part of the Unaudited Interim Financial Statements
For the six months ended 30 September 2020
19

NZD’000
Cash and cash equivalents 643
Property, plant and equipment 354
Other assets 21
Receivables 768
Payables (457)
Other payables (223)
Borrowings 63
Net identifiable assets acquired 1,169
Add: goodwill and intangible assets 17,296
Net assets acquired 18,465

The fair value of intangible assets with the IP rights of the franchise system has yet to be
determined. None of the goodwill and intangible assets are expected to be deductible for tax
purposes.

The group has engaged a qualified valuer to perform a valuation of the intangible assets of
Triple Two which will be presented in the 2021 annual report.

(ii) Contingent consideration
There is an earn out provision whereby Triple Two can increase their consideration by
improving on the performance in the base year which was calendar year 2019 and in any year
from 2020 to 2022.

The estimated total consideration based on the current forecasted results will be NZD
$18.5m if the budgeted EBITDA from CY2020-2022 are achieved, with the consideration
estimated to be 40% shares and 60% cash.

(iii) Acquisition-related costs
Acquisition-related costs of $31,000 will be included in administrative expenses in the
statement of profit or loss in the reporting period ending 31 March 2021.

(iv) Information not disclosed as not yet available
At the time the financial statements were authorised for issue, CGF had not yet completed
the accounting for the acquisition of Triple Two Coffee Holdings Limited. It is also not yet
possible to provide detailed information about their latest financial results and any contingent
liabilities of the acquired entity.


10. Subsequent Events

There were no material events subsequent to the end of the six-month period ended 30 September
2020 that would require disclosure.

20

Company Directory


Company number: 2089337


Year of incorporation: 2008


Registered office: Level 1, 96 St Georges Bay Road
Parnell, Auckland, 1052


Nature of business: Food & beverage industry


Directors:
Graeme Keith Jackson
Michael George Rae Hutcheson
Peihuan Wang
Paul Valentine Mark Elliott
Qiang Kui



Solicitors: Duncan Cotterill
Wellington


Bankers: ANZ Bank, Auckland


Auditors: Williams Buck Audit (NZ) Limited



Share registry: Link Market Services Limited
Auckland