Cooks Global Foods – Preliminary Full Year Results

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NZX & Media Release 31st May 2021
PRELIMINARY FINANCIAL RESULTS FOR THE 12 MONTHS TO 31 MARCH 2021
Positive trends offset by Covid-19 impact

SUMMARY

• Covid-19 impact on trading was significant in all markets during the year and led
to delays in the store development and opening program.
• The acquisition of the fast-growing Triple Two Coffee business in June 2020 has
added scale to the core UK market and placed CGF as the #4 Coffee focused
chain in UK.
• Trading when outlets were fully open delivered higher revenue compared to prior
years and industry comparisons.
• Total group revenue from continuing activities decreased 26.8% to $3.1 million.
• Net loss before tax from continuing operations was $3.6 million which was at the
same level compared to the same period a year ago, reflecting the benefits of
prior restructuring and reduction of costs against the reduction in revenue caused
by Covid-19 lockdowns.
• Cash flow from operating activities was positive $1.2m compared to prior year of
$0.2m
• Operating loss before depreciation, amortisation & finance charges was $2.2 million
compared to prior year loss of $35k & the operating loss from continuing
operations after tax increases to $2.8 million from net loss of $0.2 million last
year.
• The revenue declines arising from Covid-19 lockdowns were partly offset by
government support packages, particularly in the UK and Ireland.
• While there have been timing delays with new store openings, there have been no
closures of existing stores or withdrawal from opening plans of any new stores
through the global network attributable to Covid-19.
• The delays in store openings and other operational factors have resulted in a re-
classification of revenue of $6.1m into Deferred Income.
Cooks Executive Chairman Keith Jackson said: Whilst the FY21 financial year has been
dominated by the Covid-19 pandemic CGF’s stores have been resilient in towns and
suburbs. Vehicle accessed locations outperformed larger city centre outlets that were

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affected by the combination of working from home (WFH) a lack of tourists. That
combination adversely impacted our stores in cities like Dublin, Windsor and Stratford
on Avon. Independent industry research from Allegra Research in the UK showed that
the Esquires UK brand outperformed the market in calendar year 2020 with sales
down 29% compared to the industry decline of 39%.

The first half of the year saw a comprehensive lockdown for the April to June
period in almost all markets in which we operate globally. This was followed by
various levels of opening from July – October period but then followed by a second
series of lockdowns.

Store sales for the period August – October period saw Esquires UK sales 16% up
on the prior year, reflecting that business’s more regional and suburban footprint. By
comparison in Ireland our store sales were down 14% of the prior year in this period
due to the significant impact of a lack of tourists and workers in the CBD in Dublin.

During the financial year the group opened six new stores in the UK and Ireland
and one each in Saudi Arabia & Pakistan. We closed seven outlets (UK 1, Ireland 2
and Middle East 4). We had 100 outlets at the end of March 2021.

We had an outstanding team response to the challenges of Covid-19 from Franchisees
and our UK and Irish teams.

BALANCE SHEET
Borrowings increased to $7.8 million from $5.5 million at the same time a year ago.
These include loans from entities associated with Executive Chairman Keith Jackson
as well as certain convertible loan notes. Cooks continues to pursue funding options
to better reflect the appropriate mix of equity and debt requirements for the business.
Lease receivables of $18.7m and right-of-use assets of $0.9m, lease liabilities of
$19.8m have been recognised this year under IFRS 16 Accounting Standard for Finance
Leases and $1.3m of Current and $4.8m on Non-Current Liabilities was classified as
Deferred Revenue.
Loans of $1.8m will be converted to equity under a commitment from parties related
to the Chairman, Keith Jackson and approved by the Board but subject to shareholder
approval at the 2021 AGM.

OPERATIONAL BUSINESS PERFORMANCE

THE UNITED KINGDOM
The United Kingdom entered lockdown from mid-March 2020 to early July and then
from mid October 2020 through to mid-2021 and these restrictions are being eased

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at present. Indoor dining in groups of six has been permitted since 17
th
May 2021
and outdoor dining was permitted from 12
th
April 2020 with only delivery and
contactless trading permitted prior to that. As a result, many of our franchised stores
were temporarily closed for considerable periods of time and others operated as
takeaway outlets only. Government support packages have meant that our franchisees
were able to maintain their businesses through this period.
This meant that limited income from franchise fees was received by CGF as these
relate directly to store sales. Despite store growth being paused due to Covid, the
group has continued to build for the future.
Esquires UK store numbers increased to 46 at the end of March. During the year 7
stores were opened and 2 were closed. Constant currency Esquires Coffee store sales
for the year were $12.3m which was 60% of the $20.6 million in the same period a
year prior. For the period August to October 2020 when all stores were open and
trading as per “normal” Esquires Coffee store sales were 16% ahead of the same
period for the prior year. This trend has been seen in recent weeks as the restrictions
have been relaxed with sales in the first week of stores being able to welcome
customers to sit indoors (in socially distanced groups with a maximum number of 6
people) being 14% higher than the same week in 2019.

TRIPLE TWO COFFEE
The Triple Two network that was acquired in June 2020, opened 2 new stores in
Manchester and Lakeside in Essex during the financial year and saw growth pre-Xmas
with new franchisees being signed up and store fit out work being undertaken for
stores to open once the restrictions in the UK were relaxed. This will translate to
royalty revenue when the stores are opened and royalty generation from trading.
Store opening activity has resumed in FY22 with five new outlets opened in April and
May 2021 with another four in the pipeline to be opened in 2021.
Triple Two Coffee’s operating result was impacted by an IFRS 15 adjustment to
recognise deferred income of $3.2m. This deferred income will be released into the
accounts as the relevant stores open in the future.

UK SUMMARY

With 60 stores operating at the end of March the group are the 4
th
largest coffee
focused café chain in the UK after Costa, Starbucks and the Caffe Nero group (based
on Allegra Research data). The growth pathway remains positive and as the UK
recovers from Covid-19 impacts we look forward to seeing the pre-Covid momentum
return and with the combined Esquires and Triple Two brands we believe that we
have a scalable business with critical mass and are well placed to deliver strong and
sustainable results.

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IRELAND & EUROPE
The Esquires network in Ireland added a new outlet in December 2020 in the Ilac
Shopping Centre in Dublin which replaced the nearby Savoy outlet which was closed
when the landlord decided to upgrade the Savoy Movie theatre complex. The same
franchisee established the Ilac store which opened with many of the staff transferring
to the new outlet. Outlet numbers at the end of the year were 13 and there is an
encouraging pipeline of new stores in development for the balance of 2021 subject
to the current program for the removal of Covid-19 restrictions being implemented.
Constant currency total store sales in Ireland were 41% of the FY20 year with the
major impact being in the central city locations, particularly Dublin. Retail Parks that
are in smaller and more rural locations were 59% of prior year whilst Shopping
Centres that were often closed due to the restrictions were 29% of prior year.

The region posted an operating loss of $79k compared against an operating profit
of $0.128 million in the same period a year ago.

European business development initiatives have been delayed due to the Covid-19
impact and the existing outlet in Porto in Portugal was significantly affected by Covid
lockdowns during the year.

GLOBAL
Cooks operating revenue in the segment was $0.15 million compared to last year
operating revenue of $1.4 million, with the fall relating to discontinued international
product sales to the Middle East. The global business posted an operating loss of
$0.26m compared to an operating profit of $0.6 million in the same period a year
ago. The reduction in revenue was offset by significantly lower staffing costs, legal
costs and consulting fees than incurred in the prior year. In particular, there was a
significant reduction in staffing related to the Design business, equating to a
comparative cost saving of $0.7 million.

SUPPLY
Revenue in the supply business decreased by $37k from the same period a year ago.
Crux Products recorded weaker sales, due largely to the timing of shipments and the
logistics challenges related to Covid factors that were experienced globally. Supply
operating profit was $18k compared to $0.124 million at the same time a year ago.

CORPORATE
Corporate costs were $0.8 million as compared to $1.2 million last year last year
due to overall reduced expenses, particularly in relation to legal and consulting fees.

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Finance and foreign exchange translation costs were $0.8m compared to $0.7m last
year.

During the year the overall corporate costs were reduced due to the simplification of
the business and the sale of non-core business units. The benefits that will flow from
the restructuring are expected to continue to build in future years.

China
CGF has held a minority interest in a Chinese joint venture for several years. That
joint venture has been developing cafes, self-serve coffee machines and a coffee
roastery in Mainland China.
The joint venture partners have been called on to provide additional capital to fund
growth in the joint venture. This has caused the Board of CGF to re-consider the
investment. CGF has spent the last 12-18 months withdrawing from non-core business
to focus on Esquires and Triple Two in our key European markets. Accordingly, rather
than allocating capital to the Chinese joint venture, CGF has decided to withdraw
from the joint venture and transfer its interest to the other joint venture partners for
nil consideration.
This has not had any impact on the financial statements of CGF for the current
financial year as the value of the joint venture interest was written off in FY20.
Debt re-financing
CGF entered new debt facilities of approximately $500,000 with Summit Capital
Limited and has now repaid all facilities with ANZ Bank.

SUMMARY
CGF had generated significant momentum in the second half of FY20 and this had
begun to show benefits in scale and profitability. The first stages of these benefits
were evidenced in the result for the FY20 year. Our permanent restructuring changes
completed during the last 12 months have significantly reduced the overhead costs
of the group and the group is positioned well for future profitability.
The Covid-19 pandemic has been unfortunate to say the least and at this time we
cannot accurately determine the full longer-term impact. We believe that the business
model is sound with the focus on clearly defined core business areas that we can
scale up and we are well placed to emerge from the outbreak with our ability to
respond to local customer preferences through the franchise network placing us well
for the recovery.

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ABOUT COOKS GLOBAL FOODS
Cooks Global Foods operates in world markets and is listed on the NZX market
operated by NZX Limited in New Zealand under the code CGF. It owns the intellectual
property and master franchising rights to Esquires Coffee Houses worldwide (excluding
New Zealand and Australia). Cooks currently operates or franchises Esquires Coffee
in the United Kingdom, Ireland, Portugal, Bahrain, Kuwait, Saudi Arabia, Jordan,
Pakistan & Indonesia. For more information visit: www.cooksglobalfoods.com

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Appendix 1 release
30 May 2021
Cooks Global Foods Limited
This document covers Cooks Global Food Limited's unaudited financial results for the year
ended 31 March 2021
A:(CGF) : Cooks Global Foods Limited
Reporting Period
12 months ended 31 March 2021
Previous Reporting Period
12 months ended 31 March 2020
Amount
($NZ'000)
Percentage
change
Revenue from continuing ordinary activities
$3,066-26.8%
Loss from continuing activities after tax attributable to security holders
-$3,650-1.5%
Loss from discontinued activities after tax attributable to
security holders
-$16114.7%
Net loss attributable to security holders
-$3,81126.8%
Interim Dividend
Amount per
security
Imputed
amount per
security
No interim dividend has been declared for this reporting period.
$0.0000$0.00000
CGF has no dividend reinvestment plan currently in operation.
Record Date
N/A
Dividend Payment DateN/A
Comments:
Refer to commentary in attached release.
B:Cooks Global Foods Limited
Preliminary announcement for the year ended 31 March 2021
Preliminary unaudited full year report on consolidated results (including the results for the previous corresponding
year) in accordance with Listing Rule 10.4.2.
This report has been prepared in a manner which complies with generally accepted accounting practice and
gives a true and fair view of the matters to which the report relates and is based on unaudited financial statements.
The accounting policies used in the preparation of these financial statements are consistent with those used
in the interim financial statements for the six months ended 30 September 2020 and in the audited financial
statements for the year ended 31 March 2020.
The Listed Issuer has a formally constituted Audit & Risk Committee of the Board of Directors.
UnauditedAudited.
C:Consolidated Statement of Financial PerformanceMar-21Up / DownMar-20
$NZ '000%$NZ '000
Revenue3,066-26.8%4,190
Cost of sales(925)-595.3%(133)
Gross profit2,141-47.2%4,057
Operating expenses and staff costs(4,328)-5.5%(4,104)
Impairment of intangible assets
--
Results for announcement to the market

Other income
0
-100.0%12
Operating profit/(loss) before depreciation and amortisation(2,187)
-6148.4%
(35)
Depreciation and amortisation(568)-203.9%(187)
Operating profit/(loss)(2,755)-1141.1%(222)
Share of net loss of associates accounted for using the equity method
-
100.0%
(168)
Impairment of investment of associates
-
100.0%
(2,520)
Finance costs(895)-30.3%(687)
Loss before income tax(3,650)-1.5%(3,597)
Income tax benefit/(expense)
-
100.0%7
Net loss for the year from continuing operations(3,650)
-1.7%
(3,590)
Net loss for the year from discontinued operations
(161)
89.9%
(1,593)
Net loss for the year(3,811)26.5%(5,183)
Earnings Per Share (Cents per share):(0.63)(1.06)
UnauditedAudited
D:Consolidated Statement of Financial PositionMar-21Up / DownMar-20
$NZ '000%$NZ '000
Assets
Cash and cash equivalents1,492255
Trade and other receivables5,328951
Inventories1953
Other current assets284608
Current tax assets
--
Assets classified as held-for-sale
25422
Property, plant and equipment 198145
Deferred tax assets
--
Investment in Associates
(0)-
Right-of-use assets
9912,468
Lease receivables18,66618,323
Other non-current assets
1515
Total tangible assets27,01816.3%23,240
Goodwill6,2380
Intangible assets12,202329.7%2,840
Total assets45,45874.3%26,080
Liabilities
Trade and other payables13,6125,399
Bank overdraft00
Lease liabilities19,80920,870
Borrowings and other liabilities7,8335,522
Deferred tax liabilities
--
Total liabilities41,25329.8%31,791
Net (liabilities)/assets4,204-173.6%(5,711)
Equity
Share capital52,12145,549
Accumulated losses(57,569)(53,758)
Foreign currency translation reserve(546)150
Share based equity reserve10,2512,401
Total equity attributable to equity holders of the Company4,257-175.2%(5,658)
Non-controlling interests(53)(53)
Total equity 4,204-173.6%(5,711)
CentsCents
Net tangible assets per share (2.27)(1.75)
UnauditedAudited
E:Statement of Changes in EquityMar-21Up / DownMar-20
$NZ '000%$NZ '000
Loss for the period(3,811)26.8%(5,208)

Net increase in issued share capital6,5723,032
Foreign currency translation reserve(696)(99)
Non-controlling interests
-
25
Movements in equity for the period2,064191.8%(2,250)
Equity at start of the period(5,711)(3,699)
Share based payment reserve7,850
238
Equity at end of the period4,204-173.6%(5,711)
UnauditedAudited
F:Consolidated Statement of Cash FlowsMar-21Up / DownMar-20
$NZ '000%$NZ '000
Loss for the period(3,811)26.5%(5,183)
Add/(Less):
Depreciation & amortisation568760
Impairment of intangibles
-2,520
Share of losses of associates
-
168
Net movements in working capital4,4581,928
Net cash flow from operating activities1,215-529.5%193
Net cash flow from investing activities (1,445)-1542.0%(88)
Net cash flow from financing activities 1,465-1124.5%(143)
Net (decrease)/increase in cash held1,237-2731.9%(47)
Opening bank balance255302
Closing bank balance1,492-485.2%255
Made up as follows:
Cash and cash equivalents1,492255
Bank overdraft00
1,492-485.1%255
G:Material Acquisition of Subsidiaries
(a) Name of associate entity
(b)Percentage of ownership held100.00%
(c)Contribution to consolidated loss for the period
-$1,739
(d)Date from which such contribution has been calculated31/03/2021
(e)Contribution to consolidated profit/(loss) for the
previous corresponding period
N/A
(f)Date from which such contribution has been calculated19/06/2020
(g)Date of disposalN/A
H:Material Disposal of Subsidiaries
(a) Name of associate entity
(b)Percentage of ownership held100.00%
(c)Contribution to consolidated profit for the period
$38
(d)Date from which such contribution has been calculated31/03/2021
(e)Contribution to consolidated profit/(loss) for the
previous corresponding period
N/A
(f)Date from which such contribution has been calculatedN/A
(g)Date of disposal24/07/2020
I:Material Investment in Associate
J:Issued and Quoted Securities at End of Current Period
Triple Two Coffee
Scarborough Fair

Category of Securities IssuedNumberQuoted
ORDINARY SHARES:
Total number of shares in issue627,833,832 627,833,832
Issued during the current period101,853,883 -
K:Comments by Directors
If no report in any section, state NIL. If insufficient space below, provide details in the form of notes to be attached to this report.
(a)Material factors affecting the revenues and expenses of the group for the current full year or half year
Refer to Commentary.
(b)Significant trends or events since the end of the current full year or half year
Refer to Commentary.
(c) Changes in accounting policies since last Annual Report and/or last Half Yearly to be disclosed: N/A

(d) Critical Accounting Policies - Management believes the following to be critical accounting policies. That is they are both important
to the portrayal of the Issuer's financial condition and results, as they require management to make judgments and estimates
about matters that they are inherently uncertain
Impairment of Assets
Amortisation of Intangibles
Discontinued Operations
NZ IFRS 16 "Leases"
a) As a lessee
b) As a lessor
NZ IFRS 15 "Revenue from Contracts with Customers"
When the Group acts as a lessor, it determines at lease inception whether each lease is a finance lease or an operating lease.
To classify each lease, the Group makes an overall assessment of whether the lease transfers substantially all of the risks and
rewards incidental to ownership of the underlying asset, or the right-of-use asset in the case of a sublease. If this is the case, then
the lease is a finance lease; if not, then it is an operating lease. As part of this assessment, the Group considers certain indicators
such as whether the lease is for the major part of the economic life of the asset.
Where the lease is classified as an operating lease, the Group recognises the lease payments from the operating lease as income on
a straight-line basis.
Where the lease is classified as a finance lease, the Group recognises the assets held under a finance lease in its statement of
financial position and present them as a lease receivable at an amount equal to the net investment in the lease. The net investment
in the lease is initially measured at the present value of the lease payments that are not paid at the commencement date,
discounted using the interest rate implicit in the lease, or in the case of a sublease, if the interest rate implicit in the sublease cannot
be readily determined, the discount rate used for the head lease (adjusted for any initial direct costs associated with the sublease).
The lease receivable is subsequently increased by the interest income on the lease receivable and decreased by lease payment
received. It is remeasured when there is a lease modification that is not accounted for as a separate lease.
The Group recognises a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially
measured at cost, and subsequently at cost less any accumulated depreciation and impairment losses and adjusted for certain
remeasurements of the lease liability.
The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date,
discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Group’s incremental
borrowing rate. Generally, the Group uses its incremental borrowing rate as the discount rate.
The lease liability is subsequently increased by the interest cost on the lease liability and decreased by lease payment made. It is
remeasured when there is:
Revenue arises mainly from the sale of food and beverage products from our artisan style coffee stores that the Group owns directly
and from franchise and royalty arrangements that it has in place with franchise holders.
Under NZ IFRS 15 Revenue from Contracts with Customers, revenue is recognised either at a point in time or over time, or when (or
as) the Group satisfies performance obligations by transferring the promised goods or services to its customers.
The transaction price for a contract excludes any amounts collected on behalf of third parties.
The Group recognises contract liabilities for consideration received in respect of unsatisfied performance obligations and reports
these amounts as other liabilities in the statement of financial position.
Royalty income from Franchise or Master Franchise Agreements (MFAs)
The Group recognises royalty revenue derived from its Franchises and MFAs at a point in time, based on sales by Franchisees that
are reported back to Company on a monthly basis for sales that occurred in that month.
Incentives from Suppliers
The Group recognises incentives from suppliers derived from its Franchises at a point in time, based on purchases by Franchisees
that are reported back to Company on a monthly basis for purchases that occurred in that month.
The Group has applied judgement to determine the lease term for some lease contracts in which it is a lessee that include renewal
or termination options. The assessment of whether the Group is reasonably certain to exercise such options impact the lease term,
which significantly affects the amount of lease liabilities and right-of-use assets recognised.
- a change in future lease payments arising from a change in an index or rate;
- a change in the estimate of the amount expected to be payable under a residual value guarantee;
- changes in assessment of whether a purchase or extension option is reasonably certain to be exercised or a termination
option is reasonably certain not to be exercised; or
- any other change in the future lease payments or the lease term due to a lease modification that’s not accounted for as a
separate lease.

(e) Management's discussion and analysis of financial condition, result and/or operations (optional) - this section should contain
forward looking statements that should outline where these involve risk and uncertainty
Refer to Commentary.
31/05/2021
(signed by) Authorised Officer of Listed Issuer(date)
Franchise fees
The Group recognises revenue derived from its Country & Regional franchise operations on a straight-line basis over a period of time
that the franchise agreement is in place, which is generally 10 years. This is the period of time over which the performance obligation
is satisfied. Payment is received upfront upon signing the franchise contract.
The transaction price includes a variable price consideration for the possible transfer of franchise rights. This is unknown until and if
the transaction is completed. Given the high uncertainty of this transfer, the transaction price for franchise contract is not adjusted
for these transferred franchise rights. Revenue from the sale off individual café franchises is recognised over time.
The Group recognises Franchise Fees derives from the franchise agreement entered by Triple Two Coffee at the point in time when
the franchised store is open for trading with the exception for Territory Fee. This is on the basis that Triple Two Coffee has satisfied
all its performance obligations specified in its agreements for the Franchise Fees. Payment is received upfront upon signing the
franchise contract.
The Group recognises the Territory Fee over a period of time that the franchise agreement is in place, which is generally 10 years.
This is the period of time over which the performance obligation is satisfied. Payment is received upfront upon signing the franchise
contract.
Sale of Beverages
The Group is in the business of providing artisan style coffee solutions to its customers and franchisees. Revenue from contracts
with customers is recognised when control of the goods is transferred to the customer or franchisee at an amount that reflects the
consideration to which the Group expects to be entitled in exchange for those goods. The Group has concluded that it is the principal
in its revenue arrangements, because it controls the goods or services before transferring them to the customer.
Management has determined the performance obligation to deliver the food & proprietary products is completed when control of
goods passes to customer, revenue is recognised at this time.
Other revenue
Other revenue includes services to independent franchisees or other third parties received by the Group. Other revenues are
recognised when reliable estimates of the amounts due to the Group are deemed to be highly probable.

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Results announcement


13132020_1


Results for announcement to the market
Name of issuer Cooks Global Foods Limited
Reporting Period 12 months to 31 March 2021
Previous Reporting Period 12 months to 31 March 2020
Currency NZD
Amount (000s) Percentage change
Revenue from continuing
operations
$3,066 -26.8%
Total Revenue $3,788 -46.87%
Net profit/(loss) from
continuing operations
-$3,650 -1.5%
Total net profit/(loss) -$3,811 26.8%
Interim/Final Dividend
Amount per Quoted Equity
Security
The company does not propose to pay a dividend at this time.
Imputed amount per Quoted
Equity Security
Not Applicable
Record Date Not Applicable
Dividend Payment Date Not Applicable
Current period Prior comparable period
Net tangible assets per
Quoted Equity Security
-2.27 cents -1.75 cents
A brief explanation of any of
the figures above necessary
to enable the figures to be
understood
This announcement is extracted from CGF’s unaudited financial
statements for the 12 months ended 31 March 2021. A copy of
these unaudited financial statements is attached to this
announcement.
Authority for this announcement
Name of person

authorised
to make this announcement
Keith Jackson
Contact person for this
announcement
Keith Jackson
Contact phone number 021 702 509
Contact email address keith.jackson@cooksglobalfoods.com
Date of release through MAP

31 May 2021

Unaudited financial statements accompany this announcement.