Results for the year ended 31st March 2024
[Document subtitle]
1
Executive Chairman’s Report 2
Directors’ Report 9
Independent Auditors’ Report 10
Consolidated Statement of Profit or Loss and Other Comprehensive Income 13
Consolidated Statement of Changes in Equity 15
Consolidated Statement of Financial Position 16
Consolidated Statement of Cash Flows 18
Notes to the Consolidated Financial Statements 19
Statutory Information and Corporate Governance 65
Corporate Governance Statement 711
Directory 83
Table of Contents
2
Results for the year ended 31 March 2024
Executive Chairman’s Report
An ethical café group with great cafes owned and run by local people.
Highlights
- Total franchisee store sales in UK & Ireland up 18% at NZ$58.2m (FY23: NZ$49.5m).
- UK store sales were up 21% at NZ$38.3m (FY23: NZ$31.6m), double the industry
average of 9%.
- Ireland store sales up 11% at NZ$19.9m, (FY23: NZ$17.9m) compared to the industry
growth of 1%.
- 75 Group sites in the UK and Ireland as at 31 March 2024, up from 64 as at 1 April 2023.
- Net store numbers growth in UK of 18% and 15% in Ireland versus industry growth of
4% in UK and 1% in Ireland.
- Group revenue, which is highly correlated to store sales, up 20% at NZ$4.7m, NZ$3.9m.
- EBITDA of NZ$0.336m before impairment of receivables.
- Overall profit from Continuing operations was NZ$0.866m after consideration of the
foreign exchange translation reserve.
- The focus on suburbs and market towns has sheltered Esquires branded stores from
the permanent changes in consumer behaviour post Covid, such as the working from
home lifestyle change.
- The strategic direction plus the focus on organic coffee products and an enhanced food
offering with local sourcing where possible, delivered by local owners of the franchised
stores in – ‘The local chain’ has proved successful for the brand.
- Growth in the UK has been driven through strong performances by the Regional
Developers in the Southeast, London, East England & East Midlands. The appointment
of two new Regional Developers during FY24 for the North of England and the
Southwest and South Wales will accelerate the growth in those regions.
Chairman’s Report
3
- Appointment of Aiden Keegan as Group CEO. Aiden brings more than 20 years’
experience with the company in both core markets of UK & Ireland to the role.
- Esquires Coffee Houses Ireland were awarded the Irish Enterprise Award for 2024 as
the ‘Best Modern Organic Coffee Shop Enterprise’.
- Esquires Coffee at Caerphilly was awarded the ‘Best Sustainable Café Chain’ in Gwent at
the Welsh Enterprise Awards in 2023.
- Target store numbers for UK & Ireland by FY34 is 305.
Strong sales growth across our existing estate of coffee shops provides a solid base as we
continue our expansion programme of new store openings. We have an exciting growth
pathway clearly defined and have Aiden Keegan appointed to drive the future development of
the business. Aiden is uniquely qualified for the role having spent 14 years as Operations
Manager of the Irish business and almost six years since October 2018 as CEO of Esquires
Coffee UK.
The figures reported below are for continuing business and the prior period has been restated
to provide the appropriate comparative data.
Operational Business Performance
United Kingdom
Esquires Coffee UK store numbers increased to 60 on 31 March 2024, from 51 as at 31 March
2023, with 13 new Esquires stores opened and 4 closed.
Store sales grew 21% with like for like sales up 6%. New outlets that were open for the full
years FY23 and FY24 contributed 21.6% of total sales in FY24.
As at the end of June 2024 there are 65 stores operating in the UK, with new stores opened in
Colliers Wood, Pinner and Ruislip in London, Newport in Wales, and Sudbury in Suffolk, since the
beginning of the financial year.
Two new Regional Developers were appointed in the UK in FY24 with the first covering the
Southwest of England and South Wales, and the other covering the North of England, including
the North of Wales, Northwest, Yorkshire Humber, and the Northeast.
The Regional Developer model that has been operating in the Southeast of England since 2018
and in London, East England and the East Midlands since 2021, has proved very successful and
is now being rolled out to the remainder of the UK. Regional Developers for Scotland and
Northern Ireland are currently being sought.
4
Ireland
Store sales increased by 11%, totalling NZ$19.9m (FY23 NZ$17.9m). Like for like store sales were
up 6.8% versus FY23.
Outlet numbers at the end of the year were 15, a growth of 15%, with an encouraging pipeline
of new stores in development for the balance of 2024 and beyond. Store numbers in Ireland
have been restated from prior years to reflect actual locations even if the site itself has multiple
points of sales. There are currently two sites with multiple sales points, Mullingar & Carrick on
Shannon.
Sales in FY24 were affected by the impact of the fire in the Longford store that meant the store
operated from temporary premises for most of the year. The franchisee and staff did a superb
job, and sales were maintained at approximately 45% of normal levels. In addition, the Airside
store at Swords in Dublin was closed for 17 weeks for a refurbishment programme
As at the 25
th
June 2024 there are 15 stores operating with a new store opened in Galway in April
2024 and the Mary St, Dublin store closing since the beginning of April.
Global
Cooks operating revenue in the global segment was in line with the previous financial year as
the international franchised markets continue to recover. New outlets were added in Pakistan
and Portugal, with the Middle East markets closing two stores.
Balance Sheet
Total equity in the Company was NZ$(4.0)m reflecting primarily the non-cash loss on disposal
relating to the voluntary liquidation of the Triple Two business, in particular the loss from the
write off of the Triple Two goodwill and intangible assets.
Triple Two
In September 2023, the Triple Two subsidiary was placed into voluntary liquidation.
Triple Two had numerous sites that were non-viable in a post Covid market environment as
they were more central business district focused relative to the suburban and smaller town
focus of Esquires stores. Information became available showing potential significant liabilities
for the Company and this information showed that in addition to sites that were no longer
viable that the ongoing revenue streams were well below expected levels. After seeking advice
as to the options, it was determined that the only viable option was to place the subsidiary into
voluntary liquidation.
5
The Triple Two investment was fully written off in the September FY24 half year accounts. This
non-cash write-down has resulted in the company reporting NZ$4.0m of negative equity in the
full year accounts.
The Board believes that there is no further impact of the Triple Two liquidation going forward.
People
The Company announced the appointment of Aiden Keegan as Group CEO in March with effect
from 1
st
April 2024. Aiden has had 20 years’ experience with the Esquires brand, spending 14
years in the operations team in Ireland and since October 2018 has been at the helm of the
Company’s largest subsidiary, Esquires Coffee UK.
After almost 25 years with the Company that he founded our Irish Managing Director, Tony
McVerry advised of his intention to retire at the end of June 2024. He will be replaced by
Brendan Duigenan. Brendan has been five years with Esquires in Ireland and has previously
held senior roles in both AMT and Starbucks in Ireland.
As part of the planned relocation of the Board to the UK, Mike Hutcheson will retire from the
Board in June 2024. Mike is a unique marketing talent who has given excellent service and
advice to the Company over the last 10 years. The company will appoint new Directors based in
the UK to further bolster the profile in the core market area.
These moves along with Aiden’s elevation shows the strong focus that the Company is
adopting on the core markets of UK and Ireland.
Environmental, Sustainability & Governance (ESG)
We are dedicated to continuous innovation to maintain our competitive edge and uphold our
reputation as the premier destination for coffee lovers. Our commitment to providing an
exceptional coffee house experience goes hand in hand with our focus on sustainability and
environmental responsibility.
Building a Sustainable Brand
We prioritised fairness, integrity, and sustainability. At Cooks, innovation and exceptional
service are key, alongside our environmental responsibility.
Vision for the Future
We aim to lead the market with responsibly sourced coffee, fresh food, locally produced where
practical, and eco-friendly practices.
Our efforts in action include:
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• Eco-Friendly Production: Ensuring our coffee is organic and produced in harmony with
the forest without the use of harmful chemicals.
• Sustainable Coffee Sourcing: Partnering with the world’s first Carbon Neutral Gold
Standard roastery.
• Eco-friendly Disposables: Offering recyclable cutlery, takeaway boxes, straws,
serviettes, and compostable takeaway cups.
• Food Waste Reduction: Proud of our ongoing partnership with Too Good To Go to
reduce waste and emissions.
o Surprise Bags: Offer surplus food at great prices, preventing waste.
o Impact: Saved 25,000 meals, equivalent to preventing CO2 emissions from
charging 15 million smartphones
Market Leadership with Responsibility
We address climate change by:
• Designing eco-friendly stores.
• Partnering with like-minded suppliers.
• Reducing our carbon footprint through energy-efficient practices.
Financial Performance and ESG Initiatives
Our focus on quality and sustainability supports our growth.
Key initiatives include:
• Fairtrade and organic coffee.
• Carbon-neutral roasteries.
• Food waste reduction and sustainable innovations.
Sustainability Pledge
While we know there is still a lot more to do, we're constantly exploring and contributing to
ways to protect and invest in our planet.
We commit to:
• Achieving Net Zero by 2040.
• Aligning with the Paris Agreement.
• Adopting Science-Based Targets for emissions reduction.
• Promoting human rights and preventing modern slavery.
We pledge to intensify our efforts to promote sustainability in our operations, reduce waste,
and support environmental conservation. We work closely with suppliers to align on Scope 1,2
and 3 reduction plans and share progress on environmental goals.
7
By prioritising environmental sustainability, social responsibility, and ethical governance, we
aim to set a commendable standard for our peers and create a brighter, more sustainable
future for all.
Outlook
The FY25 financial year has begun strongly with five new stores opened in the UK and one in
Ireland in the first 10 weeks. A trading update was issued on 17
th
June 2024 for the period that
stated:
“Esquires has experienced strong growth across both the UK and Ireland markets, with notable
increases in sales and successful new store openings.
UK and Ireland Combined Performance:
• Overall Esquires store sales for the period increased by 23.7%.
• For the past seven weeks, Esquires branded stores in UK & Ireland achieved
aggregate sales exceeding £600,000 each week and recorded over 80,000
transactions weekly. This level of performance had only been surpassed twice
previously, including the Christmas week of last year.
UK Market:
• Esquires Store Sales increased by 30.1%.
• Like-for-like sales grew by 5.5%.
• New stores opened since April 2023 contributed significantly, accounting for 34.6%
of total sales in this period.
• Five new stores were opened in the UK in Colliers Wood, Newport, Sudbury, Pinner,
and Ruislip during April & May 2024.
Ireland Market:
• Esquires Store Sales increased by 11.7%.
• Like-for-like sales rose by 8.0%.
• New stores opened since April 2023 contributed 17.1% of total sales for the period.
• One new store was opened in Ireland: Galway – Wellpark in April 2024.
Esquires UK & Ireland store sales represented 89.3% of the company’s franchised store sales from
the global store network and the revenue for the year to 31
st
March 2024 accounted for 98.4% of the
Company’s revenue. As such, store sales and revenue figures quoted herein materially represent,
and can be used as an indication of, the store sales revenue of the Company.
The expansion strategy, combined with strong like-for-like sales growth, demonstrates the
Company’s resilience and ability to attract and retain customers in both established and new
8
locations, as well as Cook Coffee’s Esquires Organic Coffee Company’s strong market position and
the effectiveness of its customer engagement strategies.”
Summary
The Board is encouraged by the strong growth for the Esquires brand which continues to
exceed reported industry growth in both core markets and would like to acknowledge the
dedicated performances of all the parties involved in the Group’s activities delivering excellent
service to our customers every day.
Target stores for the end of March 2025 are 98 with 80 in the UK and 18 in Ireland, a growth of
31% over the 75 operational at the end of March 2024. The Company is expecting to continue
to grow at this rate of stores being added per annum to have more than 300 stores operational
in UK and Ireland by FY34.
The Group’s Esquires brand has a strong pipeline of opportunities as it continues its
commitment to building an ethical café group with great cafes owned and run by local people.
We look forward to making further progress and to an improved financial performance in the
current financial year with the experienced Aiden Keegan at the helm.
In the core markets of UK & Ireland an estimated 200,000 customers are now being served
each week by our great team led by our franchisees long with their staff, supported by
Regional Developers in the UK and the company’s great teams in both markets.
G.K. Jackson
9
The directors of Cooks Coffee Company Limited present to shareholders the Annual Report
and consolidated financial statements for Cooks Coffee Company Limited and its controlled
entities (together the “Group”) for the year ended 31 March 2024.
The directors are responsible for presenting consolidated financial statements in accordance
with New Zealand law and generally accepted accounting practice, which give a true and fair
view of the financial position of the Group as at 31 March 2024 and their financial performance
and cash flows for the year ended on that date.
The directors consider that the consolidated financial statements of the Group have been
prepared using appropriate accounting policies, consistently applied and supported by
reasonable judgements and estimates and that all relevant financial reporting and accounting
standards have been followed.
The directors believe that proper accounting records have been kept which enable, with
reasonable accuracy, the determination of the financial position of the Group and facilitate
compliance of the consolidated financial statements with the Financial Markets Conduct Act
2013.
The directors consider they have taken adequate steps to safeguard the assets of the Group
and to prevent and detect fraud and other irregularities.
The directors note that other than the voluntary liquidation of the Triple Two subsidiary, there
were no material changes in the nature of the business undertaken by the Company in the
past year.
Directors’ Report
Directors’ Report
10
Independent Auditors’ Report
Independent auditor’s report to the shareholders of Cooks Coffee
Company Limited
Report on the audit of the consolidated financial statements
Our opinion on the consolidated financial statements
In our opinion, the accompanying consolidated financial statements of Cooks Coffee Company Limited
(the Company) and its subsidiaries (the Group), present fairly, in all material respects:
— the consolidated financial position of the Group as at 31 March 2024, and
— its consolidated financial performance and its consolidated cash flows for the year then ended
in accordance with New Zealand equivalents to International Financial Reporting Standards (NZ IFRS)
and International Financial Reporting Standards.
What was audited?
We have audited the consolidated financial statements of the Group, which comprise:
— the consolidated statement of financial position as at 31 March 2024,
— the consolidated statement of profit or loss and other comprehensive income for the year then ended,
— the consolidated statement of changes in equity for the year then ended,
— the consolidated statement of cash flows for the year then ended, and
— notes to the consolidated financial statements, including material accounting policy information.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (New Zealand) (ISAs (NZ)).
Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of
the consolidated financial statements section of our report.
We are independent of the Group in accordance with Professional and Ethical Standard 1 International Code
of Ethics for Assurance Practitioners (including International Independence Standards) (New Zealand) issued
by the New Zealand Auditing and Assurance Standards Board, and we have fulfilled our other ethical
responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained
is sufficient and appropriate to provide a basis for our opinion.
Other than in our capacity as auditor we have no relationship with, or interests in, the Company or any of its
subsidiaries.
11
Material uncertainty related to going concern
We draw attention to Note 4 in the consolidated financial statements, which indicates that the Group incurred
a net loss from continuing operations $356,000 for the year ended 31 March 2024 and, as of that date, the
Group’s current liabilities exceeded its current assets by $2,966,000. As stated in Note 4, these events or
conditions, along with other matters as set forth in Note 4, indicate that a material uncertainty exists that may
cast significant doubt on the Group’s ability to continue as a going concern. Our opinion is not modified in
respect of this matter.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit
of the consolidated financial statements of the current period. These matters were addressed in the context of
our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do
not provide a separate opinion on these matters. In addition to the matter described in the Material uncertainty
related to going concern section, we have determined the matters described below to be the key audit matters
to be communicated in our report.
1. Restatement Area of focus
(refer also to notes 5, 7 & 15)
The Group has re-stated the comparative
figures presented for the year ended 31
March 2023 in relation to discontinued
operations of the Triple Two subsidiary and
the correction of Deferred revenue. The
earliest opening balances at 1 April 2022
were also restated.
Because of the significance to the financial
statements of these events and the
judgements and assumptions which need to
be applied in re-presenting the financial
information is the reason why we have given
specific audit focus and attention to this area.
How our audit addressed the key audit
matter
Our audit procedures included:
— Testing for compliance in the accounting
treatment of the Triple Two disposal with
the requirements of NZ IFRS 10
Consolidated financial statements and
NZ IFRS 5 Non-current assets held for
sale and discontinued operations
— Undertaking detailed testing of the
calculations prepared by management
and tracing to underlying agreements
and transactions for Deferred revenue
— Assessed that appropriate disclosure has
been included in the financial statements
2. Intangible
assets
Area of focus
(refer also to note 17)
The Group has $2.8m of intangible assets for
Global IP rights related to the franchise
system.
Because of the significance to the financial
statements of these balances and the
judgements and assumptions which need to
be applied in determining the recoverable
amounts of the cash generating units to
which these intangibles are allocated is the
reason why we have given specific audit
focus and attention to this area.
How our audit addressed the key audit
matter
Our audit procedures included:
— Analysed the key assumptions included
in the Group’s impairment assessment
by comparison with historical data and
trends
— Completed sensitivity analysis on key
assumptions including the discount rate
applied and revenue growth rates
— Assessed that appropriate disclosure
has been included in the financial
statements
12
Other information
The directors are responsible for the other information. The other information comprises the Chairman’s
report, the Directors report, and Statutory information and corporate governance for the year ended 31 March
2024, but does not include the consolidated financial statements and our auditor’s report thereon. Our opinion
on the consolidated financial statements does not cover the other information and we do not express any form
of audit opinion or assurance conclusion thereon.
In connection with our audit of the consolidated financial statements, our responsibility is to read the other
information and, in doing so, consider whether the other information is materially inconsistent with the
consolidated financial statements or our knowledge obtained in the audit or otherwise appears to be materially
misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing to report in this regard.
Directors’ responsibilities for the consolidated financial statements
The directors are responsible on behalf of the Group for the preparation and fair presentation of the
consolidated financial statements in accordance with NZ IFRS, and for such internal control as the directors
determine is necessary to enable the preparation of consolidated financial statements that are free from
material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, the directors are responsible on behalf of the Group for
assessing the Group’s ability to continue as a going concern, disclosing, as applicable, matters
related to going concern and using the going concern basis of accounting unless the directors either
intend to liquidate the Group or to cease operations or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the consolidated financial
statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a
whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit
conducted in accordance with ISAs (NZ) will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate,
they could reasonably be expected to influence the economic decisions of users taken on the basis of these
consolidated financial statements.
A further description of our responsibilities for the audit of the consolidated financial statements is located at
the External Reporting Board’s website: Audit Report 1 » XRB This description forms part of our auditor’s
report. The engagement director on the audit resulting in this independent auditor’s report is Daren Wright.
Restriction on distribution and use
This independent auditor’s report is made solely to the shareholders, as a body. Our audit work has been
undertaken so that we might state to the shareholders those matters which we are required to state to them in
the independent auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not
accept or assume responsibility to anyone other than the shareholders, as a body, for our audit work, this
independent auditor’s report, or for the opinions we have formed.
William Buck Audit (NZ) Limited
Auckland
1 July 2024
13
Consolidated Statement of Profit or Loss and Other
Comprehensive Income
For the year ended 31 March 2024
31 March 31 March
2024 2023
Restated
Notes $'000 $'000
Continuing operations
Revenue 6 4,703 3,920
Grant and other income 6.1 230 283
Release of liabilities 6.2 - 337
Franchisee rebates and consumables (125) (122)
Depreciation and amortisation 18 (24) (6)
Impairment loss on receivables 13 (133) (142)
Net foreign exchange (losses)/gains (29) (110)
Employee costs 8 (1,979) (1,577)
Other expenses 9 (2,464) (2,184)
Operating profit/(loss) 179 399
Interest Income 23 1,347 1,127
Finance costs 10 (1,882) (1,750)
Profit/(Loss) before income tax (356) (224)
Income tax (expense)/credit 11 - 113
Profit/(Loss) for the year from continuing operations (356) (111)
Net loss for the year from discontinued
operations
15.1 (6,003) (3,352)
Net Profit/(Loss) for the year attributable to
shareholders
(6,359) (3,463)
Other comprehensive income
Items that may be subsequently reclassified to profit or
loss
Change in foreign currency translation reserve 1,097 883
Other comprehensive income after tax 1,097 883
Total comprehensive Profit/(Loss) for the
year attributable to shareholders
(5,262) (2,580)
Total comprehensive Profit/(Loss) for the
year attributable to Shareholders of the
parent arises from:
- Continuing operations 866 772
- Discontinued operations
(6,128) (3,352)
(5,262) (2,580)
14
Loss per share:
Basic and diluted loss per share (New Zealand
Cents) from continuing and discontinued
operations:
22.2 (10.84) (6.24)
Basic and diluted loss per share (New Zealand
Cents) from continuing operations:
22.2 (0.61) (0.20)
Basic and diluted loss per share (New Zealand
Cents) from discontinued operations:
22.2 (10.23) (6.04)
This statement should be read in conjunction with the notes to the consolidated financial statements.
15
Consolidated Statement of Changes in Equity
For the year ended 31 March 2024
Attributable to Equity holders of the Company
Share
Capital
Foreign
currency
translation
reserve
Share
based
payment
reserve
Accumulated
Losses
Total
Equity
Notes $'000 $'000 $'000 $'000 $'000
Balance at 1 April 2022 - Previously reported 56,897 88 2,401 (56,988) 2,398
FY22 Prior Year Restatement - - - (505) (505)
Balance at 1 April 2022 - Restated 56,897 88 2,401 (57,493) 1,893
Comprehensive loss for the year
Profit/(Loss) for the year - Restated - - - (3,463) (3,463)
Other comprehensive income
Items that may be subsequently reclassified
to profit or loss:
Change in foreign currency translation reserve - 883 - - 883
Total comprehensive income/(loss) for the
year
- 883 - (3,463) (2,580)
Transactions with owners of the Company
Issue of ordinary shares 22.1 1,448 - - - 1,448
Total contributions by owners of the
Company
1,448 - - - 1,448
Balance at 31 March 2023 – Restated 58,345 971 2,401 (60,956) 761
Comprehensive loss for the year
Profit/(Loss) for the year - - - (6,359) (6,359)
Other comprehensive income
Items that may be subsequently reclassified
to profit or loss:
Release of foreign currency translation reserve
relating to Triple Two
- (140) - - (140)
Change in foreign currency translation reserve - 1,237 - - 1,237
Total comprehensive income/(loss) for the
year
- 1,097 - (6,359) (5,262)
Transactions with owners of the Company
Issue of ordinary shares 22.1 500 - - - 500
Change in share based payment reserve 22.3 - - (2,401) 2,401 -
Total contributions by owners of the
Company
500 - (2,401) 2,401 500
Balance at 31 March 2024 58,845 2,068 - (64,914) (4,001)
This statement should be read in conjunction with the notes to the consolidated financial statements.
16
Consolidated Statement of Financial Position
As at 31 March 2024
31 March 31 March 1 April
2024 2023 2022
Restated Restated
Notes $'000 $'000 $'000
Current Assets
Cash and cash equivalents 12 1,174 445 1,156
Trade and other receivables 13 1,718 1,323 1,244
Lease receivables 23.1 2,892 2,155 2,755
Other current assets 13 1,049 1,550 606
Current Assets 6,833 5,473 5,761
Non-Current Assets
Property, plant and equipment 18 92 142 150
Right-of-use assets 23.1 - 1,604 1,642
Lease receivables 23.1 20,163 17,427 16,488
Goodwill 7 - 3,072 5,457
Intangible assets 17 2,831 6,881 7,262
Other non-current financial assets 15 15 16
Non-current assets 23,101 29,141 31,015
Total Assets 29,934 34,614 36,776
Liabilities
Current Liabilities
Trade and other payables 19 4,521 4,440 4,518
Deferred revenue 20 580 1,507 2,335
Lease liabilities 23.1 2,892 2,382 2,920
Borrowings 21 1,806 2,108 2,892
Other Liabilities 21 - 560 565
Current liabilities 9,799 10,997 13,230
Non-Current Liabilities
Deferred Revenue 20 2,696 1,505 763
Lease liabilities 23.1 20,163 18,932 18,226
Deferred tax liabilities 11 - 1,036 1,143
Borrowings 21 1,277 1,383 1,521
Non-current liabilities 24,136 22,856 21,653
Total Liabilities 33,935 33,853 34,883
Net Assets/(Liabilities) (4,001) 761 1,893
17
Equity
Share capital 22.1 58,845 58,345 56,897
Accumulated losses (64,914) (60,956) (57,493)
Foreign currency translation reserve 2,068 971 88
Share based equity reserve 22.3 - 2,401 2,401
Total equity (4,001) 761 1,893
The consolidated financial statements were approved for issue for and on behalf of the Board as at 1 July
2024. This statement should be read in conjunction with the notes to the consolidated financial statements.
18
Consolidated Statement of Cash Flows
For the year ended 31 March 2024
31-Mar 31-Mar
2024 2023
Notes $'000 $'000
Operating activities
Cash was provided from:
Receipts from customers 6,784 3,992
Cash was applied to:
Interest cost (527) (526)
Payments to suppliers & employees (4,572) (3,847)
Discontinued operations (612) (103)
Net cash provided from/(applied to)
operating activities 25 1,073 (484)
Investing activities
Cash was provided from:
Disposal of property, plant and equipment 12 -
Cash was applied to:
Purchase of property, plant and equipment (5) (53)
Acquisition of intangible assets - -
Discontinued operations (2) (3)
Net cash provided from/(applied to)
investing activities 5 (56)
Financing activities
Cash was provided from:
Proceeds from borrowings 810 100
Proceeds from share issue 107 587
Cash was applied to:
Principal elements of lease payments (24) (175)
Repayment of borrowings (1,047) (575)
Discontinued operations (195) (108)
Net cash provided from/(applied to)
financing activities (349) (171)
Net increase/(decrease) in cash and cash
equivalents held 729 (711)
Cash & cash equivalents at beginning of the
year 445 1,156
Effect of exchange rate changes on foreign
currency balances
-
-
Cash & cash equivalents at end of the year 12 1,174 445
Composition of cash and cash equivalents:
Bank balances 12 1,174 445
This statement should be read in conjunction with the notes to the consolidated financial statements.
19
Notes to the Consolidated Financial Statements
1. Nature of operations
Cooks Coffee Company Limited (“CCC” or the “Company) and its controlled entities (the
“Group”) principal activity is the food and beverage industry with the primary focus being on
operating a network of cafes internationally via franchised operations.
2. General information and statement of compliance
Cooks Coffee Company Limited is the Group’s ultimate parent company, is incorporated and
domiciled in New Zealand and is listed on the Main board of the New Zealand stock exchange
and is listed on the Aquis Stock Exchange in the United Kingdom.
The address of its registered office is 96 St Georges Bay Road, Parnell, Auckland, 1052, New
Zealand.
Cooks Coffee Company Limited is a company registered under the Companies Act 1993 and
is an FMC reporting entity under Part 7 of the Financial Markets Conduct Act 2013. The
consolidated financial statements of the Group have been prepared in accordance with the
requirements of Part 7 of the Financial Markets Conduct Act 2013 and the NZX Market Listing
Rules.
The consolidated financial statements comprise the Company, its controlled entities and its
associates (together the “Group”). See Note 16.
For the purposes of complying with NZ GAAP, the Group is a Tier 1 for-profit entity. The
Company’s consolidated financial statements comply with New Zealand Equivalents to
International Financial Reporting Standards (NZ IFRS). They comply with the International
Financial Reporting Standards (IFRS) as issued by the International Accounting Standards
Board (IASB) and IFRIC interpretations.
The information in the consolidated financial statements is presented in New Zealand dollars
which is the functional currency of the ultimate parent company. Amounts in the
consolidated financial statements have been rounded off to the nearest thousand, or in
certain cases, the nearest dollar unless otherwise stated.
The consolidated financial statements for the year ended 31 March 2024 (“FY24”) were
approved and authorised for issue by the Board of Directors on 1 July 2024.
20
3. Material accounting policy information
3.1. Going concern
The directors have prepared the consolidated financial statements on the going concern
basis. In doing so significant judgement has been applied. For further details of these
assumptions and associated material uncertainties refer to Note 4.
3.2. Overall considerations
The principal accounting policies applied in the preparation of these financial statements are
set out in the accompanying notes where an accounting policy choice is provided by NZ IFRS,
is new or has changed, is specific to the Group’s operations or relates to material transactions,
events or conditions.
These policies have been consistently applied to all the years presented, unless otherwise
stated.
The consolidated financial statements have been prepared using the historic cost basis with
the exception of certain financial assets and liabilities which are carried at fair value through
the profit or loss. The measurement bases are more fully described in the accounting policies
below.
3.3. Changes in accounting policies
The accounting policies applied are consistent with those of the audited annual financial
statements for CCC for the year ended 31 March 2023 (“FY23”).
3.4. Basis of consolidation
The Group consolidated financial statements consolidate those of the parent company and
all its controlled entities as of 31 March 2024. The Group controls an entity if it is exposed, or
has rights, to variable returns from its involvement with the entity and has the ability to affect
those returns through its power over the entity.
All transactions and balances between Group companies are eliminated on consolidation,
including unrealised gains and losses on transactions between Group companies. Where
unrealised losses on intra-group asset sales are reversed on consolidation, the underlying
asset is also tested for impairment from a Group perspective. Amounts reported in the
consolidated financial statements of controlled entities have been adjusted where necessary
to ensure consistency with the accounting policies adopted by the Group.
21
Profit or loss and other comprehensive income of controlled entities acquired or disposed of
during the year are recognised from the effective date of acquisition, or up to the effective
date of disposal, as applicable.
3.5. Foreign currency translation
Foreign currency transactions and balances
Foreign currency transactions are translated into the functional currency of the respective
Group entity, using the exchange rates prevailing at the dates of the transactions (spot
exchange rate). Foreign exchange gains and losses resulting from the settlement of such
transactions and from the remeasurement of monetary items at year end exchange rates
are recognised in profit or loss.
Non-monetary items are not retranslated at year-end and are measured at historical cost
(translated using the exchange rates at the date of the transaction).
Foreign operations
In the Group consolidated financial statements, all assets, liabilities and transactions of
Group entities with a functional currency other than the NZD are translated into NZD upon
consolidation. The functional currencies of the entities in the Group have remained
unchanged during the reporting period.
On consolidation, assets and liabilities have been translated into NZD at the closing rate at
the reporting date. Goodwill and fair value adjustments arising on the acquisition of a foreign
entity have been treated as assets and liabilities of the foreign entity and translated into NZD
at the closing rate. Income and expenses have been translated into NZD at the average rate
(the use of average rates is appropriate only if rates do not fluctuate significantly) over the
reporting period. Exchange differences are charged/credited to other comprehensive
income and recognised in the currency translation reserve in equity. On disposal of a foreign
operation the cumulative translation differences recognised in equity are reclassified to
profit or loss and recognised as part of the gain or loss on disposal.
3.6. Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount of GST, except where the
amount of GST incurred is not recoverable from the IRD. In these circumstances, the GST is
recognised as part of the cost of acquisition of the asset or as part of an item of the expense.
Receivables and payables in the Statement of Financial Position are shown inclusive of GST.
Cash flows are presented in the statement of cash flows on a gross basis and, except for the
GST components of investing and financing activities, are disclosed as operating cash flows.
22
3.7. Revenue
Revenue arises mainly from the franchise rights and royalty arrangements that the Group
has in place with franchise holders. The Group also earns revenue from franchisees in the
establishment of their stores.
Under NZ IFRS 15, revenue from Contracts with Customers 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 deferred revenue 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.
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.
Supplier incentives
Supplier incentives are recognised in the period to which they relate. Where these have been
received in advance of the period to which they relate, they are classified as deferred revenue
and released in the relevant period.
Significant financing components
Using the practical expedient in NZ IFRS 15, the Group does not adjust the promised amount
of consideration for the effects of a significant financing component if it expects, at contract
inception, the period between the transfer of the promised good or service to the customer
and when the customer pays for that good or service will be one year or less.
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.
Grant Income & government subsidy
23
The accounting policy adopted is to recognise the grant income in the period to which the
underlying furloughed staff costs relate. The amount of the grant income (i.e., subsidy) is
based on the difference between the actual hours a staff member worked compared to their
contracted hours for a certain period. Therefore, within the period of the claim, it is deemed
that the conditions have been met to make a claim for that payroll accounting period.
3.8. Income taxes
Tax expense recognised in the statement of profit or loss comprises the sum of deferred tax
and current tax not recognised in other comprehensive income, or directly in equity.
Current income tax assets and/or liabilities comprise those obligations to or claims from Tax
authorities relating to the current or prior reporting periods, that are unpaid at the reporting
date. Current tax is payable on taxable profit, which differs from profit or loss in the
consolidated financial statements. Calculation of current tax is based on tax rates and tax
laws that have been enacted or substantively enacted by the end of the reporting period.
Deferred income taxes are calculated using the liability method on temporary differences
between the carrying amounts of assets and liabilities and their tax bases. However, deferred
tax is not provided on the initial recognition of an asset or liability unless the related
transaction is a business combination or affects tax or accounting profit. Deferred tax on
temporary differences associated with investments in controlled entities is not provided if
reversal of these temporary differences can be controlled by the Group and it is probable
that reversal will not occur in the foreseeable future.
Deferred tax assets and liabilities are calculated, without discounting, at tax rates that are
expected to apply to their respective period of realisation, provided they are enacted or
substantively enacted by the end of the reporting period.
Deferred tax assets are recognised to the extent that it is probable that they will be able to
be utilised against future taxable income, based on the Group’s forecast of future operating
results which is adjusted for significant non-taxable income and expenses and specific limits
to the use of any unused tax loss or credit. Deferred tax liabilities are always provided for in
full.
Deferred tax assets and liabilities are offset only when the Group has a right and intention
to set off current tax assets and liabilities from the same taxation authority.
Changes in deferred tax assets or liabilities are recognised as a component of tax income or
expense in the statement of profit or loss, except where they relate to items that are
24
recognised in other comprehensive income or directly in equity, in which case the related
deferred tax is also recognised in other comprehensive income or equity, respectively.
3.9. Employment benefits
Defined contribution plans
The Group pays fixed contributions into independent entities in relation to several state plans
and insurance arrangements for individual employees. The Group has no legal or
constructive obligations to pay contributions in addition to its fixed contributions, which are
recognised as an expense in the period that relevant employee services are received.
Short-term employee benefits
Short-term employee benefits, including annual leave entitlement, are current liabilities
included in employee benefits, measured at the undiscounted amount that the Group
expects to pay as a result of the unused entitlement.
3.10. Impairment testing of other intangible assets, property, plant and
equipment
For impairment assessment purposes, assets are grouped at the lowest levels for which there
are largely independent cash inflows (cash-generating units). As a result, some assets are
tested individually for impairment, and some are tested at cash-generating unit level. All
other individual assets or cash-generating units are tested for impairment whenever events
or changes in circumstances indicate that the carrying amount may not be recoverable.
An impairment loss is recognised for the amount by which the asset’s or cash-generating
unit's carrying amount exceeds its recoverable amount, which is the higher of fair value less
costs to sell and value-in-use. Any reversal of an impairment loss will be limited to what the
carrying amount would have been, net of depreciation or amortisation, if no impairment had
taken place. To determine the value-in-use, management estimates expected future cash
flows from each cash-generating unit and determines a suitable interest rate in order to
calculate the present value of those cash flows. The data used for impairment testing
procedures are directly linked to the Group’s latest approved budget, adjusted as necessary
to exclude the effects of future reorganisations and asset enhancements. Discount factors
are determined individually for each cash-generating unit and reflect management’s
assessment of respective risk profiles, such as market and asset-specific risks factors.
Impairment losses for cash-generating units is charged pro rata to the other assets in the
cash-generating unit. All assets are subsequently reassessed for indications that an
impairment loss previously recognised may no longer exist. An impairment charge is
reversed if the cash-generating unit’s recoverable amount exceeds its carrying amount.
25
3.11. Financial instruments
A financial instrument is recognised when the Group becomes a party to the contractual
provisions of the instrument. Financial assets are derecognised when the Group’s contractual
rights to the cash flows from the financial assets expire or when the Group transfers the
financial asset to another party without retaining control or substantially all risks and
rewards of the asset. Ordinary purchases and sales of financial assets are accounted for at
trade date, i.e. the date that the Group commits itself to purchase or sell the asset. Financial
liabilities are derecognised when the Group’s obligations specified in the contract expire or
are discharged or cancelled.
Financial assets
Following NZ IFRS 9 treatment, the Group classifies its financial assets as those to be
measured at amortised cost (loans, trade receivables and lease receivables), and those to be
measured at fair value either through OCI or through profit or loss.
Financial assets that are stated at amortised cost are reviewed individually at balance date.
In relation to the impairment of financial assets, NZ IFRS 9 requires an expected credit loss
model (“ECL”). The expected credit loss model requires the Group to account for expected
credit losses and changes in those expected credit losses at each reporting date to reflect
changes in credit risk since initial recognition of the financial assets i.e. a credit event does
not have to have occurred before credit losses are recognised. The Group has adopted the
simplified method for its ECL calculations. Refer to Note 30.2 Credit Risk.
Non-derivative financial instruments
Non-derivative financial instruments comprise trade receivables, other debtors, cash and
cash equivalents and loans and borrowings, which are initially recognised at fair value plus
transaction costs and subsequently measured at amortised cost.
Creditors and accruals are initially recognised at fair value and subsequently measured at
amortised cost.
Interest income and expense
Interest income and expenses are reported on an accrual basis using the effective interest
method.
26
3.12. Intangible assets
Recognition of intangible assets
Acquired intangible assets
Trademarks, global IP rights and rights acquired in a business combination that qualify for
separate recognition are initially recognised as intangible assets at their fair values.
Subsequent measurement
Intangible assets not of an indefinite life are accounted for using the cost model whereby
capitalised costs are amortised on a straight-line basis over their estimated useful lives, as
these assets are considered finite. Residual values and useful lives are reviewed at each
reporting date. In addition, they are subject to impairment testing as described in Note 17.
As of 31 March 2024, the remaining useful life for Trademarks is 3 years.
Intangible assets (Global IP rights) of an indefinite life are tested for impairment annually by
comparing their carrying amount with their recoverable amount. An estimate of an assets
recoverable amount made in a preceding period may be used in the impairment test for that
asset in the current period provided certain criteria are met.
When an intangible asset is disposed of, the gain or loss on disposal is determined as the
difference between the proceeds and the carrying amount of the asset and is recognised in
profit or loss within other income or other expenses.
3.13. Non-current assets (or disposal groups) held for sale and discontinued
operations
Non-current assets classified as held for sale and the assets of a disposal group classified as
held for sale are presented separately from the other assets in the balance sheet. The
liabilities of a disposal group classified as held for sale are presented separately from other
liabilities in the balance sheet.
A discontinued operation is a component of the entity that has been disposed of or is
classified as held for sale and that represents a separate major line of business or
geographical area of operations, is part of a single co-ordinated plan to dispose of such a line
of business or area of operations, or is a subsidiary acquired exclusively with a view to resale.
The results of Group operations are presented separately in the statement of profit or loss.
FY23 has been restated to show the Triple Two entities as discontinued, see note 5 for details.
27
3.14. Equity, reserves and dividend payments
Share capital represents the consideration received for shares that have been issued. Any
transaction costs associated with the issuing of shares are deducted from share capital, net
of any related income tax benefits.
Other components of equity include the following:
• Foreign currency translation reserve – comprises foreign currency translation
differences arising on the translation of consolidated financial statements of the
Group's foreign entities into NZD (see Note 3.6),
• Share based payment reserve,
• Accumulated losses include all current and prior period results.
Dividend distributions payable to equity shareholders are included in other liabilities when
the dividends have been approved in a general meeting prior to the reporting date.
All transactions with owners of the parent are recorded separately within equity.
3.15. Significant management judgement in applying accounting policies
and estimation uncertainty
When preparing the consolidated financial statements, management undertakes a number
of judgements, estimates and assumptions about the recognition and measurement of
assets, liabilities, income and expenses as follows:
Intangible assets
Intangible assets are recognised on business combinations if they are separable from the
acquired entity or give rise to other contractual/legal rights under NZ IFRS 3. The amounts of
intangibles are estimated by using appropriate valuation techniques. The useful economic
life of externally acquired intangible assets are initially recognised at cost and subsequently
amortised on a straight-line basis over their useful economic lives.
Going concern
The considered view of the Board of Directors of the Company is that, after making enquiries,
we have a reasonable expectation that Cooks Coffee Company Limited (the Company) and
Group have access to adequate resources to continue operations for the foreseeable future.
For this reason, the Board of Directors considers the adoption of the going concern
assumption in preparing the consolidated financial statements for the FY24 to be
appropriate. (See Note 4).
28
Leases
Extension and termination options
Extension and termination options are included in a number of leases across the Group.
These terms are used to maximise operational flexibility in terms of managing contracts. The
majority of extension and termination options held are exercisable only by the Group and
not by the respective lessor.
Critical judgements in determining the lease term
In determining the lease term, management considers all facts and circumstances that create
an economic incentive to exercise an extension option, or not exercise a termination option.
Extension options (or periods after termination options) are only included in the lease term
if the lease is reasonably certain to be extended (or not terminated).
The assessment is reviewed if a significant event or a significant change in circumstances
occurs which affects this assessment and that is within the control of the lessee.
Incremental borrowing rates
Lease liabilities are measured by discounting the lease payments using the interest rate
implicit in the lease. If that rate cannot be readily determined, which is generally the case for
leases in the Group, the lessee’s incremental borrowing rate is used, being the rate that the
individual lessee would have to pay to borrow the funds necessary to obtain an asset of
similar value to the right-of-use asset in a similar economic environment with similar terms,
security and conditions.
To determine the incremental borrowing rate, the Group:
• Uses a build-up approach that starts with a risk-free interest rate, adjusted for the
credit risk spread of the lessee. The credit risk spread is determined by reference to
recent third-party financing received by the individual lessee, or indicative quotes
obtained from the lessee’s primary lender.
• Make adjustments specific to the lease, e.g. term, security, country and currency.
Impairment testing of intangible assets
In assessing impairment, management estimates the recoverable amount of each asset or
cash-generating unit based on various valuation models as deemed appropriate. Estimation
uncertainty relates to assumptions and judgements used as disclosed in Note 17.
29
Carrying value of receivables
The allowance for expected credit losses assessment requires a degree of estimation and
judgement. It is based on the lifetime expected credit loss, grouped based on days overdue
and makes assumptions to allocate an overall expected credit loss rate for each group. In
making this judgement, the Group evaluates amongst other factors whether there is
objective evidence of significant financial difficulty of individual customers or customer
groups, whether there has been breach of contract such as default in payment terms,
whether it has become probable that the customer or other party will enter into bankruptcy
or other financial reorganisation, the disappearance of an active market for that customer
because of financial difficulties, and national or local economic conditions that could impact
on the customer (see Notes 13 and 30.2). Apart from historical collection rates, the Group
also evaluates forward-looking information that is available. The allowance for expected
credit losses, as disclosed in Note 30.2, is calculated based on the information available at
the time of preparation. The actual credit losses in future years may be higher or lower.
4. Going concern
The Group reported a loss for continuing operations of $356,000 and operating net cash
inflows/(outflows) from continuing operations of $1,685,000 for FY24.
As at 31 March 2024, the Group has reported Net Liabilities of $4,001,000 and current
liabilities exceed current assets by $2,966,000. Included in current liabilities is $580,000 of
Deferred Revenue.
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 and to continue trading 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:
• Opening multiple new stores in the United Kingdom & Ireland in FY25, with 6 sites
already opened in the first quarter.
• The group is currently marketing the Regional Development rights for Scotland and
Northern Ireland and expects to sell both regions in FY25.
30
• Regional Franchisees have contractual commitments to open a certain volume of new
stores each year. The combination of these minimum performance obligations is 20
new stores per annum.
• Based on the company’s current performances the average store sales in the UK are
GBP£400,000 and the income that the Group derives per store in the first full year of
trading is £20,000.
• The board notes that recent independent research reports show that the UK café
industry grew at 3.6% in store numbers and 9.2% in sales value in 2023 whilst Esquires
Coffee UK grew at more than double the industry growth rate in both measures. In
Ireland the reported increase in the coffee focused café industry was 1.6% by store
numbers. The UK market is expected to grow by 2.7% for the period to 2029 whilst in
Ireland this growth is expected to be 2.6% CAGR.
• Budget for the FY25 projects a positive cash inflow of $1,215,000.
• An allowance for the payment of institutional debt.
• The Group’s ability to successfully conclude present discussions regarding the roll-
over of existing debt as well as continued capital raises in both New Zealand and the
United Kingdom.
• The Group’s ability to raise equity funds to re-gear the balance sheet as part of an
overall restructuring plan.
• The ability of related parties of Keith Jackson to continue to provide funding as
required, and market conditions which the Group operates in.
Additional information to note include:
• The success of the Regional Developer for the Southeast UK, London, East England &
East Midlands region in establishing eleven (11) new outlets in FY24 compared to the
annual Minimum Performance Obligation (“MPO”) of ten (10) new outlets for the
regions.
• The sale of the Southwest Region including South Wales and Northern Regions
including North Wales, Northwest England, Yorkshire/ Humber and Northeast
England in the UK in late 2023 with the related contracted MPO’s for both regions to
achieve 10 new stores p.a. over the next 10-year period.
• In Ireland the model is direct between the company and the franchisee and the
average store sales are higher based on a larger average footprint. The average new
store numbers are planned to be 3 per annum over the next ten (10) years. The
average income that the company derives per store in the first full year of trading is
€50,000.
• Improvement in economic activity in the United Kingdom and Ireland and the
continued lift in store revenue levels. The Board notes that as per the recent trading
31
update on 17
th
June that the like for like store sales for the first 10 weeks of FY25 rose
5.5% in the UK and 8.0% in Ireland.
• The Group has a Cash position of $1,174,000 as at 31 March 2024.
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.
A material uncertainty exists which may cast significant doubt on the Group’s ability to
continue as a going concern for the foreseeable future and therefore that it may be unable
to realise it’s assets and discharge it’s liabilities in the normal course of business.
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
received a Letter of Support from related parties of Keith Jackson, that they will continue to
financially support the Group for the foreseeable future to enable it to continue trading. 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 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 considering 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
32
the Group be unable to continue as a going concern and meets its debts as and when they
fall due.
5. Restatement of FY23
FY23 Consolidated Statement of Profit or Loss and Other Comprehensive Income has been
restated to show the Triple Two entities as discontinued operations and also correct the
deferred revenue recognition.
5.1. Discontinued operations
The Triple Two entities were effectively disposed of on 29
th
September 2023 when control
passed to the administrators. As such, it has been presented as discontinued operations in
FY24 in the Consolidated Statement of Profit or Loss and Other Comprehensive Income and
is not consolidated in the Consolidated Statement of Financial Position.
FY23 has been restated to show the Triple Two entities as discontinued in the Consolidated
Statement of Profit or Loss and Other Comprehensive income. See note 15.1 for details of
the performance of discontinued operations and note 7 for details of the loss on disposal of
Triple Two.
5.2. Deferred Revenue
In FY23 and FY22, the deferred revenue, reserves and revenue were misstated as the income
from regional developers was recognised on receipt of cash rather than over the term of the
relevant agreement. The amounts were deemed to be material and if not corrected, would
affect how the financial statements were read. The financial statements were therefore
restated to show the correct values for deferred revenue, reserves and revenue.
31 March 31 March 31 March 31 March
2023 2023 2023 2023
Restated Triple Two
Restatement
Increase/ (Decrease)
Deferred Revenue
Restatement
Increase/ (Decrease)
Previously
Reported
Notes $'000 $'000 $'000 $'000
Continuing operations
Revenue 6 3,920 (2,546) (147) 6,613
Operating profit/(loss)
399 646 (147) (100)
33
Loss per share:
Basic and diluted loss per share (New Zealand
Cents) from continuing and discontinued
operations:
(6.24) (5.97)
Basic and diluted loss per share (New Zealand
Cents) from continuing operations:
(0.20) (5.80)
Basic and diluted loss per share (New Zealand
Cents) from discontinued operations:
(6.04) (0.17)
31 March FY23 31 March 1 April FY22 1 April
2023 2023 2022 2022
Restated Amounts
restated
Previously
Reported
Restated Amounts
restated
Previously
Reported
$'000 $'000 $'000 $'000 $'000 $'000
Current Assets
Other current assets 1,550 739 811 18 - 18
Non-Current Liabilities
Deferred Revenue 1,505 1,391 114 763 506 257
Equity
Accumulated losses (60,956) (652) (60,304) (57,494) (506) (56,988)
6. Revenue
The Group’s revenue is analysed as follows for each major category:
Continuing Operations
Discontinued Operations
31-Mar 31-Mar 31-Mar 31-Mar 31-Mar 31-Mar
2024 2023 2023 2024 2023 2023
Restated Previously
Reported
Restated Previously
Reported
$'000 $'000 $'000 $'000 $'000 $'000
Recurring store franchise fees
(royalties etc)
3,065 2,618 2,798 64 180 -
Supplier Incentives 1,178 957 958 - - -
New store construction & fitout
income
5 19 1,533 618 1,514 -
Franchise fees 450 322 1,307 99 838 -
Sale of food & beverage 5 4 17 522 477 464
Group revenue 4,703 3,920 6,613 1,303 3,009 464
34
Recurring store franchise fees
The Group receives royalties from franchisees to cover central and marketing services
delivered under the franchise agreements issued which are calculated as a % of store sales,
usually on a weekly basis.
Supplier Incentives
Incentives from suppliers are recognised in the period to which they relate.
Where there are incentives received in advance of the period to which they relate, these are
classified as deferred revenue and released in the relevant period.
New store construction & fit-out income
For new stores where the Group manages and pays for the fit-out of the store, these costs
are recharged along with design fees, project management fees and others relating to the fit
out projects.
Franchise fees
Included in franchise fees is the amortisation of deferred revenue related to the sale of
country and regional franchises and revenue from the sale of store franchises. During FY24,
the Group’s franchisees opened net 11 new stores (FY23: 16).
Sale of food & beverage
Purchases of food and beverages on behalf of franchisees are recharged along with
marketing materials and sundry consumables.
6.1. Grant & other income
There was no Grant income in FY24 (FY23 $283,000). Other income of $230,000 in FY24
mainly relates to franchisee recharges for equipment and licenses.
6.2. Release of liabilities
The Group has analysed trade payables with a view of debt that is no longer payable and has
released prior period expenses in FY23. In addition, other borrowings have been reviewed in
detail, and amounts that are no longer payable due to non-performance counterparties, have
been released to the profit and loss during FY23. No liabilities were released in FY24.
35
31-Mar 31-Mar
2024 2023
$'000 $'000
Release of liabilities
Trade and other payables - 102
Other liabilities - 235
7. Loss on disposal of Triple Two
The Triple Two entities were effectively disposed of on 29
th
September 2023 when control
passed to the administrators.
Triple Two assets and liabilities were therefore not included in the Consolidated Statement
of Financial Position but the loss on disposal was included in the net loss for the year from
discontinued operations in the Consolidated Statement of Profit or Loss and Other
Comprehensive Income along with the losses incurred by the Triple Two entities up to and
including 29
th
September 2023.
The loss on disposal was calculated as follows:
29-Sep
2023
$000
Proceeds from sale of Triple Two -
Net liabilities at disposal (see below) 2,896
Goodwill disposed of (3,072)
Intangible Assets disposed of (4,050)
Deferred tax liability disposed of (1,036)
Net loss on disposal (5,262)
Right of use assets 1,451
Lease Receivables 1,029
Trade and other receivables 352
Other assets 102
Trade and other payables (1,149)
Lease Liabilities (2,553)
Deferred Income (832)
Deferred tax liability (1,036)
Other liabilities (260)
Net liabilities at disposal (2,896)
36
8. Employee costs
Expenses recognised for employee costs are analysed below:
Continuing
Operations
Discontinued
Operations
31-
Mar
31-Mar 31-Mar 31-Mar
2024 2023 2024 2023
$'000 $'000 $'000 $'000
Wages, salaries 1,484 1,322 595 1,089
Defined contribution funds 269 60 (9) 8
Other staff costs 226 195 22 38
Employee remuneration 1,979 1,577 608 1,135
9. Other expenses
Expenses recognised as other costs are analysed below:
Continuing
Operations
Discontinued
Operations
31-Mar 31-Mar 31-Mar 31-Mar
2024 2023 2024 2023
Restated Restated
$'000 $'000 $'000 $'000
Administration and other costs 653 711 272 48
Directors’ fees 181 144 - -
Selling, marketing and
distribution costs
462 490 24 51
Management fees 240 240 - -
Professional and consulting
services
600 241 480 179
Travel costs 328 358 59 189
Other expenses 2,464 2,184 835 467
37
10. Finance costs
Finance costs for the reporting periods consist of the following:
Continuing Operations
Discontinued Operations
31-Mar 31-Mar 31-Mar 31-Mar
2024 2023 2024 2023
Restated Restated
$'000 $'000 $'000 $'000
Finance charges 15 16 5 4
Interest expense on
leases
1,347 1,157 - 151
Interest on loans 520 577 7 9
Finance costs 1,882 1,750 12 164
11. Income Tax and Deferred Tax
The major components of tax expense and the reconciliation of the expected tax expense
/credit based on the domestic effective tax rate of Cooks Coffee Company Limited at 28%
and the reported tax expense/credit in profit or loss are as follows:
31-Mar 31-Mar 31-Mar
2024 2023 2023
Restated
Previously
Reported
$'000 $'000 $'000
Profit/(Loss) before tax from continuing operations (356) (224) (3,333)
Loss before tax from discontinuing operations (6,003) (3,352) (96)
(6,359) (3,576) (3,429)
Domestic tax rate for Cooks Coffee Company
Limited
28% 28% 28%
Expected tax expense (income) on continuing
operations
(100) (63) (960)
Adjustment for tax-rate differences in foreign
jurisdictions (40) 5 5
Adjustment for non-deductible expenses:
Relating to amortisation of intangible assets - 775
Other non-deductible expenses 10 5 245
Actual tax expense (income) (130) (53) 65
38
Tax expense (income) comprises:
Current tax expense (income) (130) (53) 65
Deferred tax expense (income):
- Origination and reversal of temporary differences - - -
- Temporary difference relating to amortisation of
intellectual property on acquisition
- - 112
- Tax losses adjustment to prior period 53 81 (134)
- Tax Losses not recognised 77 (141) 158
- Unrecognised Tax Losses - - (314)
Income tax expense (income) - (113) (113)
Income tax expense (income) is attributable to:
Loss from continuing operations - - (113)
Loss from discontinued operations - (113) -
- (113) (113)
At 31 March 2024, the Group has deferred tax liabilities of $nil (FY23: $1,036,000) relating to
the Triple Two Franchise System in the UK.
12. Cash and cash equivalents
Cash and cash equivalents consist of the following:
31-Mar 31-Mar
2024 2023
$'000 $'000
Cash at bank and in hand denominated in:
NZD 45 8
EUR 108 73
GBP 1,021 364
Cash and cash equivalents 1,174 445
There are no restrictions on the cash and cash equivalents.
The Group had no overdraft banking facilities as at 31 March 2024 (FY23: $NIL).
13. Trade and other receivables and other current assets
Trade and other receivables are initially recognised at the fair value of the amounts to be
received, plus transaction costs (if any).
The Group has recognised expected credit losses in the Statement of Profit or Loss and Other
Comprehensive Income by applying the simplified impairment approach, whereby upon
initial measurement of the trade receivables, the Group considers all credit losses that are
39
expected to occur during the lifetime of the receivable. The Group has reviewed the historical
ageing analysis of gross trade receivables and considered forward looking macro-economic
factors, by geographic region, to determine the expected credit loss rate. This rate is applied
to outstanding gross trade receivables as at 31 March 2024 to calculate the allowance for
expected credit losses.
Trade and other receivables consist of the following:
31-Mar 31-Mar
2024 2023
$'000 $'000
Trade and other receivables
Trade receivables 1,794 1,549
Less: allowance for expected credit losses (76) (226)
Net trade and other receivables 1,718 1,323
Movements in provision
Opening Balance (226) (378)
Bad Debts write-off - -
Release/(Additional allowance) for expected credit
losses
150 152
Closing Balance (76) (226)
31-Mar 31-Mar
2024 2023
$'000 $'000
Impairment loss on receivables comprises of:
Release/(Additional allowance) for expected credit
losses
150 152
Bad debts written off (283) (600)
Impairment loss on receivables (133) (448)
Debtors are reviewed each quarter and an assessment made of recoverability of all balances
90 days or older. Consideration is taken of any corresponding creditor balances, discussions
to date with the debtor, payment plans agreed and being honoured. Based on this review, a
provision for doubtful debts from 15% to 50% of the outstanding debt may be applied. At
subsequent quarterly debtor reviews further provisioning will be applied depending on an
assessment of the likelihood of the debtor to clear the balance.
40
As at 31 March the ageing of trade receivables is as follows:
31-Mar 31-Mar
2024 2023
$'000 $'000
Trade receivables
Current 411 283
31 to 60 days 183 151
61 to 90 days 158 220
> 90 days 1,042 895
Trade receivables 1,794 1,549
(a) Other current assets consist of the following:
31-Mar 31-Mar
2024 2023
$'000 $'000
Prepayments 123 208
Deferred Costs 122 186
Other short-term assets 804 1,156
Other current assets 1,049 1,550
Other short-term assets consist mainly of accrued income for the regional developer
agreements.
14. Deferred Costs
In FY24, this relates solely to shares issued to a regional developer deferred over the life of
the relevant agreement.
15. Assets and liabilities classified as held-for-sale and discontinued
operations
There are no remaining sites operated by the Group in the UK as the last one was exited in
March 2024.
41
15.1. Financial performance and cash flow information of discontinued
operations
The financial performance and cash flow information presented are for the year ended FY24
and FY23.
31-Mar 31-Mar
2024 2023
$'000 $'000
Results of discontinued operation
Revenue 1,303 3,009
Other income 29 12
Raw materials and consumables used (334) (1,002)
Depreciation and amortisation (8) (847)
Impairment loss on receivables (109) (306)
Employee costs (608) (1,135)
Other expenses (837) (467)
Operating loss (564) (736)
Finance costs - -
Interest on bank and other borrowings (13) (119)
Impairment goodwill - (2,497)
Loss on write off of intercompany balances with
Triple two
(164)
-
Loss on disposal of subsidiary (5,262) -
Loss before income tax (6,003) (3,352)
Income tax (expense)/credit - -
Loss for the year from discontinued operation (6,003) (3,352)
Cash flows used in discontinued operation
Net cash used in operating activities (612) (103)
Net cash used in investing activities (2) (3)
Net cash used in financing activities (195) (108)
Net cash flows for the year (809) (214)
16. Interests in other entities
Interests in material subsidiaries
Country % Holding Principal activity
2024 2023
Bishops Café Limited England 100 100 Food and beverage
Esquires Coffee UK Limited England 100 100 Food and beverage
Esquires Real Estate (UK) Limited England 100 100 Store Lease Holding
Esquires Coffee Houses Ireland
Limited
Ireland 100 100 Food and beverage
Esquires Coffee Houses Europe
Limited
Ireland 100 100
Master Franchisor - Holding
Master Franchise Agreement
42
17. Intangible Assets
Management assessed the recoverable amounts of the Group’s Global IP Rights asset using
‘value in use’ calculations to assess for any impairment.
Global IP rights were tested for impairment using discounted cash flow projections based on
management approved forecasts for a 5-year period.
The Global IP rights relate to the Esquires franchise system which is applied to all territories,
and therefore the cash generating unit (“CGU”) considered when assessing the ‘value in use’
of this asset includes all activity of the group that generates royalty income.
The key assumptions in the models for cash flow projections are those driving the sales
forecast. These have been set based on management’s previous experience of store
openings and the franchisee markets in the UK and Ireland; multiple years of historical sales
data for individual stores both in terms of revenue streams and geographical location and
regional developer data on store openings per year.
Main assumptions in the UK sales forecast include:
• FY25 – 18 new stores @ average annualised store sales (adjusted for the projected
opening date) of £350,000 p.a. Note that for the first 12 weeks of FY25 the new stores
opened are averaging annualised sales of £426,640.
• FY26 – 21 new stores @ average annualised store sales (adjusted for the projected
opening date) of £400,000 p.a.
• FY27 – 21 new stores @ average annualised store sales (adjusted for the projected
opening date) of £400,000 p.a.
• The 3-year period is phased to equate to 60 new stores which is based on the
contractual obligations of the 3 existing Regional Developers. This does not include
any allowance for Scotland or Northern Ireland Regional Developers that are currently
being advertised for.
• All royalty rates for new stores based on 3.0% to the company and rebates are based
on 1.8%
The sales forecast for Ireland was based on:
• Projections based on 3 new stores p.a. each year at an average sales per store of
€700,000 p.a. Store openings spread throughout the year.
• Royalty rates for new stores based on 7.0% to the company and rebates are based on
2.4%
Other key assumptions in the models for cash flow projections were:
43
• FY24 being a full year of “normal trading” in core markets and the benefits of the new
store acquisition program.
• Long term growth rate of 2.0% per annum from FY28 onwards;
• Exchange rate of 0.474 (NZD/GBP);
• Pre-tax discount rate of 13.2% per annum increased by 1% to 14.2% to recognise
intangible asset dependency.
Trademarks, Global IP Rights and Franchise Rights:
The Group acquired trademarks, Global Intellectual Property rights (“Global IP Rights”) and
Franchise Rights through business acquisitions.
Trademarks
Global IP
Rights
Franchise
Rights Total
$'000 $'000 $'000 $'000
Cost
Balance at 1 April 2022 93 3,245 5,041 8,379
Additions - - - -
Balance at 31 March 2023 93 3,245 5,041 8,379
Additions - - - -
Disposal of subsidiary - - (5,041) (5,041)
Balance at 31 March 2024 93 3,245 - 3,338
Accumulated amortisation
Balance at 1 April 2022 (73) (434) (610) (1,117)
Amortisation charge for the
year - - (381) (381)
Balance at 31 March 2023 (73) (434) (991) (1,498)
Amortisation charge for the
year - - - -
Disposal of subsidiary - - 991 991
Balance at 31 March 2024 (73) (434) - (507)
Carrying amounts
At 31 March 2023 20 2,811 4,050 6,881
At 31 March 2024 20 2,811 - 2,831
Based on the ‘value in use’ calculations, the recoverable amount ($2.8m) for Global IP
rights was assessed by management to be above its existing carrying value with no
impairment required. Management’s assessment is that a change in a key assumption
would not impact the carrying value to exceed the recoverable amount.
44
18. Property, plant and equipment
Furniture
& Fittings
Plant &
Equipment
Computer
Equipment
Motor
Vehicles Total
$'000 $'000 $'000 $'000 $'000
Cost
Balance at 1 April 2022 35 204 210 56 505
Additions 12 19 23 2 56
Disposals (34) (99) (31) (44) (208)
Balance at 31 March 2023 13 124 202 14 353
Balance at 1 April 2023 13 124 202 14 353
Additions 1 1 3 - 5
Disposals (5) (67) (39) (14) (125)
Balance at 31 March 2024 9 58 166 - 233
Accumulated depreciation
Balance at 1 April 2022 (28) (189) (126) (12) (355)
Depreciation (1) (18) (26) (4) (49)
Disposals 27 114 42 10 193
Balance at 31 March 2023 (2) (93) (110) (6) (211)
Balance at 1 April 2023 (2) (93) (110) (6) (211)
Depreciation (1) (9) (20) (1) (31)
Disposals - 55 39 7 101
Balance at 31 March 2024 (3) (47) (91) - (141)
Carrying amounts
At 31 March 2023 11 31 92 8 142
At 31 March 2024 6 11 75 - 92
19. Trade and other payables
Trade and other payables recognised are all short-term and consist of the following:
31-Mar 31-Mar
2024 2023
Trade and other payables $'000 $'000
- Trade payables 3,014 3,138
- Related party payables 649 441
- Other payables 858 861
Trade and other payables 4,521 4,440
45
Trade payables
Within Terms 701 895
Overdue 2,313 2,243
Trade payables
3,014 3,138
The carrying value of trade and other payables classified as financial liabilities measured at
amortised cost approximates fair value. Refer to Note 30.1 on foreign currency risk.
20. Deferred revenue
Below is the breakdown of the current and non-current deferred revenue as presented in
the Balance Sheet.
UK &
Ireland
Franchising
Global
Franchising
& Design
Total
$'000 $'000 $'000
Opening balance as of 1 April 2022
as previously reported
2,422 170 2592
Restatement of deferred revenue 506 - 506
Closing balance as of 1 April 2022
(Restated)
2,928 170 3,098
Additions/(Decreases) during the year 1,480 - 1,480
Recognised as:
Franchise fees during the year (1,307) (130) (1,437)
New store construction & fitout
income
during the year
(1,014) - (1,014)
Restatement of deferred revenue 885 - 885
Closing balance as of 31 March
2023 (Restated)
2,972 40 3,012
- Current 1,497 10 1,507
- Non Current 1,475 30 1,505
46
UK &
Ireland
Franchising
Global
Franchising
& Design
Total
$'000 $'000 $'000
Opening balance as of 1 April 2023
as restated
2,972 40 3,012
Additions/(Decreases) during the year 2,186 - 2,186
Recognised as:
Franchise fees during the year (369) - (369)
Disposal of subsidiary (1,553) - (1,553)
Closing balance as of 31 March
2024
3,236 40 3,276
- Current 570 10 580
- Non Current 2,666 30 2,696
With the disposal of Triple Two Coffee, the deferred revenue is now made up of regional
developer fees being recognised over the term of the agreement and loyalty bonuses from
suppliers, also being recognised over the term of the agreement.
The restatement relates to regional developer fees that were recognised as income in error
in prior years.
21. Borrowings and other liabilities
Current
Non-
Current
Current
Non-
Current
31-Mar 31-Mar 31-Mar 31-Mar
2024 2024 2023 2023
$'000 $'000 $'000 $'000
Borrowings
Finance Loans 921 210 1,242 350
Related Party Loans* 885 1,067 866 1,033
1,806 1,277 2,108 1,383
Other liabilities
Payable for acquisition of Triple Two
Coffee
- - 560 -
- - 560 -
Borrowings and other liabilities 1,806 1,277 2,668 1,383
* Further information relating to related party loans and other related party liabilities are set
out in Note 26.
47
Fair value
The fair value of current borrowings approximates to the carrying amount and the impact of
discounting is not significant.
22. Equity
22.1. Share Capital
The share capital of Cooks Coffee Company Limited consists of issued ordinary shares. All
shares are equally eligible to receive dividends and the repayment of capital. The shares have
no par value.
Movements of share capital 31-Mar-24 31-Mar-23
Number of Shares issued:
No. of
Shares
No. of
Shares
Ordinary shares opening balance 60,726,349 53,059,495
Ordinary shares issued 2,706,262 7,666,854
Ordinary shares cancelled (3,388,837) -
Ordinary shares buyback (41,326) -
Ordinary shares consolidation - -
Total ordinary shares authorised at 31 March 60,002,448 60,726,349
Movements of share capital 31-Mar-24 31-Mar-23
Value of Shares issued: $'000 $'000
Ordinary shares opening balance 58,345 56,897
Ordinary shares buyback (5) -
Ordinary shares issued less share issue expenses 505 1,448
Total ordinary shares authorised at period end 58,845 58,345
During the year ended FY24, the company issued 2,706,262 new shares, bought back
41,326 shares and cancelled 3,388,837 shares (2023 cancelled shares: nil) bringing the total
issued shares to 60,002,448 (FY23: 60,726,349). The company now has 58,795,448 quoted
shares and 1,207,000 non-voting shares on issues.
22.2. Loss per share
The calculation of basic and diluted loss per share for the year ended FY24 was based on the
weighted average number of ordinary shares on issue. The calculation of diluted earnings
per share for the year ended FY24 was based on the weighted average number of ordinary
shares.
48
31-Mar-24 31-Mar-23
Weighted average ordinary shares issued 58,526,330 55,526,579
Basic and diluted loss per share (New Zealand
Cents) from continuing and discontinued
operations:
(10.84) (6.24)
Basic and diluted loss per share (New Zealand
Cents) from continuing operations:
(0.61) (0.20)
Basic and diluted loss per share (New Zealand
Cents) from discontinued operations:
(10.23) (6.04)
Net tangible assets per share (New Zealand Cents) (11.39) (13.43)
Total loss attributable to shareholders (6,359) (3,463)
Loss from continuing operations (356) (111)
Loss from discontinued operations (6,003) (3,352)
The weighted average numbers of shares are calculated below:
Weighted average number of shares 31-Mar-24 31-Mar-23
Number of Shares issued:
No. of
Shares
No. of
Shares
Ordinary shares opening balance 60,726,349 53,059,495
Ordinary shares issued 422,569 2,467,084
Ordinary shares cancelled (2,611,071) -
Ordinary shares bought back on-market and
cancelled (11,517) -
Total ordinary shares authorised at 31 March 58,526,330 55,526,579
22.3. Share based payment reserve
Movement in Share based payment reserve
31-Mar 31-Mar
2024 2023
$'000 $'000
Esquires Coffee Ireland Limited share-based
payment
Opening balance 2,401 2,401
Earn-out agreement cancelled and reserve written
back to retained earnings
(2,401) -
Closing balance - 2,401
49
• No earn-out payment (to be settled by the issue of Cooks shares) has been made as
at 31 March 2024 and the earn-out agreement was cancelled during the year with the
share based payment reserve being written back to retained earnings.
22.4. Shares held by ESOP / Treasury shares
3,888,837 shares held on trust were cancelled in the year (3,388,837 at 31 March 2023) with
a further 165,225 issued.
23. Leases
The Group leases stores and office premises from various third-party landlords and
subsequently re-leases them to the franchisees under separate lease contracts. This lease
arrangement is limited to the franchises in the UK and Ireland only. Lease contracts are
typically made for fixed periods of 5 to 10 years but may have extension options. Lease terms
are negotiated on an individual basis and contain a wide range of different terms and
conditions. The lease agreements do not impose any covenants, but leased assets may not
be used as security for borrowing purposes. The Group has concluded that it retains control
of the leased properties which have been sub-leased to franchisees.
Right-of-Use Assets
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.
Costs included in the measurement of the right-of-use asset comprise the following:
• the amount of the initial measurement of lease liability;
• any lease payments made at or before the commencement date, less any lease
incentives received;
• any initial direct costs incurred by the lessee; and
• an estimate of the restoration costs to be incurred by the lessee, recognised and
measured applying NZ IAS 37 Provisions, Contingent Liabilities and Contingent Assets.
Depreciation is charged so as to write off the cost of assets, over the lease term using the
straight-line method.
50
Lease Liabilities
The lease liability is initially measured at the present value of the future lease payments over
the lease term 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 lessee's incremental
borrowing rate, being the rate that the lessee would have to pay to borrow over a similar
term, and with a similar security, the funds necessary to obtain an asset of a similar value to
the right-of-use asset in a similar economic environment.
Generally, the Group uses the lessee's incremental borrowing rate as the discount rate.
Lease payments included in the measurement of the lease liability comprise the following:
• fixed payments (including in-substance fixed payments), less any lease incentives
receivable;
• variable lease payments that are based on an index or a discount rate;
• amounts expected to be payable by the lessee under residual value guarantees;
• the exercise price of a purchase option if the lessee is reasonably certain to exercise
that option; and
• payments of penalties for terminating the lease, if the lease term reflects the lessee
exercising that option.
The lease liability is subsequently increased by the interest cost on the lease liability and
decreased by lease payments made. It is remeasured when there is a change in future lease
payments arising from:
• A change in an index or a discount rate;
• A change in the estimate of the amount expected to be payable under a residual value
guarantee;
• Changes in the 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
• A lease modification that is not accounted for as a separate lease.
The Group has applied judgement to determine the lease term for some lease contracts in
which it is a lessee that include renewal options. The assessment of whether the Group is
reasonably certain to exercise such options impacts the lease term, which significantly affects
the amount of lease liabilities and right-of-use assets recognised.
51
Finance Lease Receivables
Where the sublease 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 finance
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).
Lease payments included in the measurement of net investment comprise the following:
• fixed payments (including in-substance fixed payments), less any lease incentives
payable;
• variable lease payments that are based on an index or a rate;
• any residual value guarantees provided to the lessor;
• the exercise price of a purchase option if the lessee is reasonably certain to exercise
that option; and
• payments of penalties for terminating the lease, if the lease term reflects the lessee
exercising that option.
The finance lease receivable is subsequently increased by the interest income on the finance
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.
23.1. Amounts recognised in the Statement of Financial Position
The Statement of Financial Position shows the following amounts relating to leases:
Right-of-use assets
31-Mar 31-Mar
2024 2023
$'000 $'000
Property
Cost 3,196 2,811
Less: Accumulated depreciation (1,592) (1,169)
Net book value as at 1 April 1,604 1,642
52
Additions - 656
Remeasurement of lease liability - 7
Movement in FX - 59
Depreciation expense - (423)
Disposal (1,604) (337)
Net book value as at 31 March - 1,604
Cost - 3,196
Less: Accumulated depreciation - (1,592)
Net book value as at 31 March - 1,604
There are no right-of-use assets (FY23: one) relating to corporate-operated stores in the UK.
Lease liabilities
31-Mar 31-Mar
2024 2023
$'000 $'000
Current 2,892 2,382
Non-current 20,163 18,932
Total lease liabilities 23,055 21,314
Finance lease receivables
31-Mar 31-Mar
2024 2023
$'000 $'000
Current 2,892 2,155
Non-current 20,163 17,427
Total finance lease receivables 23,055 19,582
The average effective Incremental Borrowing Rate in FY24 is 5.7% per annum (FY23: 5.7% per
annum).
53
23.2. Amounts recognised in the Consolidated Statement of Profit or Loss
and Other Comprehensive Income
The Consolidated Statement of Profit or Loss and Other Comprehensive Income shows the
following amounts relating to leases:
31-Mar 31-Mar
2024 2023
$'000 $'000
As a lessee:
Interest expense on lease liabilities 1,347 1,126
Depreciation expense on right-of-use assets
(included in depreciation and amortisation)
- 423
Interest income from subleases classified as finance
leases
1,347 1,127
The total cash outflow for leases to franchisee landlords in FY24 was $nil (FY23 was $372,000).
23.3. Maturity analysis of lease payments
Lease liabilities as the lessee:
31-Mar 31-Mar
2024 2023
$'000 $'000
Less than one year 2,892 2,382
One to five years 12,429 9,371
More than five years 7,734 9,561
Total lease liabilities 23,055 21,314
Finance lease arrangements as the lessor:
31-Mar 31-Mar
2024 2023
$'000 $'000
Year 1 4,296 3,346
Year 2 4,573 3,193
Year 3 4,517 3,226
Year 4 4,235 3,023
Year 5 3,599 2,520
Onwards 9,788 11,344
Lease payments 31,008 26,652
54
Gross investment in the lease 31,008 26,652
Less: unearned finance income (7,953) (7,070)
Present value of minimum lease payments
receivable
23,055 19,582
Net investment in the lease 23,055 19,582
24. Fees paid to auditor
The Auditor of the Group for 31 March 2024 is William Buck Audit (NZ) Ltd. The auditor for
UK firms is Rouse Partners LLP.
31-Mar 31-Mar
2024 2023
$'000 $'000
Audit of financial statements
- Statutory Audit 81 120
- Overseas firms 37 118
Total fees paid to auditor 118 238
25. Reconciliation of cash flows from operating activities
31-Mar 31-Mar
2024 2023
$'000 $'000
Profit/(Loss) after tax (356) (111)
Add non-cash items:
Depreciation 24 6
Amortisation of intangible assets
-
Impairment loss on receivables 133 142
Net foreign exchange gains/(losses) 29 110
Revaluation of contingent consideration payable - -
Impairment of goodwill - -
Release of liabilities - (337)
Add/(Less) movements in assets/liabilities: 1,855 (191)
Net cash flow applied to operating activities from
continuing operations 1,685 (381)
55
26. 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, Jackson &
Associates Limited and Weihai Station Limited and a trustee of Nikau Trust.
• Mike Hutcheson is a director of Image Centre Limited and Lighthouse Ventures
Holdings Limited.
• Paul Elliott is a director of Elliott Capital Advisors Limited.
• Michael Ambrose is a director of Ashville Consultancy Limited.
• Peihuan Wang is a director of Jiajiayue Holding Group Limited and Weihai Station
Limited.
• Elena Garside is a director of Garside & Garside Ltd.
• Tony McVerry is a director of Esquires Coffee Houses Ireland Limited.
• Aiden Keegan is a director of Esquires Coffee UK Limited.
Number of shares held by directors and other related parties:
31st
March
2024
31st
March
2023
Keith Jackson (including related parties) 13,316,049
13,066,049
Jiajiayue Holding Group (including
related parties) 10,591,374
10,591,374
Yunan Health & Tourism Holdings 6,714,643
6,714,643
Crown Kj Nominees 4,086,769 4,086,769
CCC Employee Trust 165,225 3,388,837
Michael Ambrose 1,050,000
700,000
Paul Elliott 552,129
226,296
Michael Hutcheson (including related
parties) 88,020
118,389
Aiden Keegan 114,166
14,166
Maretha Mc Verry 38,246
38,246
56
26.1. Transactions with related parties
The following transactions occurred with related parties during the year:
31-Mar 31-Mar
2024 2023
$'000 $'000
Purchases of goods and services
Purchase of management services 240 240
Interest paid to related parties 282 314
Other transactions
Related party receivables - 255
Subscriptions for new ordinary shares 181 500
Funding loans advanced by related parties 210 39
The above values are exclusive of GST or VAT if any.
During the year, the following related parties converted outstanding receivable owing into
equity:
- Jackson & Associates Limited, converted $50,000 into 250,000 ordinary shares.
- Paul Elliot, converted $61,333 into 325,833 ordinary shares.
- Michael Ambrose, converted $70,000 into 350,000 ordinary shares.
26.2. Balances outstanding with related parties
31-Mar 31-Mar
2024 2023
$'000 $'000
Outstanding balances arising from purchases of
goods and services
Entities controlled by key management personnel 649 441
Loans from related parties
Balance beginning of the year 1,842 1,875
Loans advanced 210 39
Loans repaid (60) -
Net foreign exchange effects 8 (1)
Interest charged 234 243
Interest paid (282) (314)
Balance end of period 1,952 1,842
57
Other liabilities to related parties
Balance beginning of the year 560 562
Contingent liability disposed of (560)
Net foreign exchange effects - (2)
Balance end of period - 560
Other receivables from related parties
Issued capital not yet received - 255
The above values are inclusive of GST or VAT if any.
Related party loans and liabilities either have no interest or carry interest rates ranging from
10% - 15% pa. They have terms of either being on-call or subordinated debt and with an
option of conversion to equity if mutually agreed. There is no security for these related party
loans and liabilities, though one of the related parties has provided personal property as
security to one of the third-party loans owed by the company.
26.3. Transactions with directors and senior management personnel
Key management of the Group are the executive members of Cooks Coffee Company
Limited’s Board of Directors and senior management. Directors and senior management
personnel payments (exclusive of GST if any) made during the year includes the following
expenses:
31-Mar 31-Mar
2024 2023
$'000 $'000
Short-term employee benefits 1,079 1,154
Share based payments
- 29
1,079 1,183
27. Segment reporting
The Group’s reportable segments are business units deriving Royalties and Product Sales to
Franchisees in geographical locations. New Zealand segment represents head office
operation for the Group.
The Group has also separated operating segments for the business activities intended to be
sold.
58
Segment information for the reporting period is as follows:
Continuing operations
31/03/2024
Global
franchising
& retail
UK & IRE
franchising
New
Zealand Total
Global operational splits $'000 $'000 $'000 $'000
Revenue 76 4,593 34 4,703
Grant and other income - 230 - 230
Franchisee rebates and consumables used - (123) - (123)
Depreciation and amortisation - (22) (1) (23)
Impairment loss on receivables - (133) - (133)
Net foreign exchange (losses)/gains 2 (0) (32) (30)
Employee costs - (1,846) (133) (1,979)
Other expenses (90) (1,059) (1,317) (2,466)
Operating (loss)/profit (12) 1,640 (1,449) 179
Finance costs, net - (23) (512) (535)
Profit/(Loss) before income tax (12) 1,617 (1,961) (356)
Income tax (expense)/credit - - - -
Profit/(Loss) for the year from
continuing operations (12) 1,617 (1,961) (356)
Non-current assets
Intangible assets 42 1,308 1,481 2,831
Property, plant and equipment - 91 1 92
For discontinued operations, see note 15.1
59
Continuing operations – Restated
31/03/2023
Global
franchising
& retail
UK & IRE
franchising
New
Zealand Total
Global operational splits $'000 $'000 $'000 $'000
Revenue 237 3,683 - 3,920
Grant and other income - 283 - 283
Release of liabilities - - 337 337
Franchisee rebates and consumables used - (122) - (122)
Depreciation and amortisation - (3) (3) (6)
Impairment loss on receivables (124) (18) - (142)
Net foreign exchange (losses)/gains (9) (23) (78) (110)
Employee costs - (1,358) (219) (1,577)
Other expenses (17) (981) (1,186) (2,184)
Operating (loss)/profit 87 1,461 (1,149) 399
Finance costs, net (1) (51) (571) (623)
Profit/(Loss) before income tax 86 1,410 (1,720) (224)
Income tax (expense)/credit - 113 - 113
Profit/(Loss) for the year from
continuing operations 86 1,523 (1,720) (111)
Non-current assets
Intangible assets 42 1,308 1,481 2,831
Property, plant and equipment - 104 3 107
60
Discontinued operations – Restated
31/03/2023 UK retail
Global operational splits $'000
Revenue 3,009
Other income 12
Franchisee rebates and consumables used (1,002)
Depreciation and amortisation (466)
Impairment loss on receivables (306)
Employee costs (1,135)
Other expenses (467)
Operating (loss) (355)
Finance costs, net (119)
Amortisation of intangible assets (381)
Impairment of goodwill (2,497)
Loss before income tax (3,352)
Income tax (expense)/credit -
Loss for the year from discontinued
operations (3,352)
Non-current assets
Intangible assets 4,050
Property, plant and equipment 35
Right of use assets 1,604
Assets held for Sale 7
Goodwill 3,072
28. Contingent Liabilities
There were no contingent liabilities as at 31 March 2024 (FY23: $nil).
29. Capital commitments
There were no capital commitments as at 31 March 2024 (FY23: $nil).
30. Financial risk management
Due to the broad range of the Group’s activities, there is exposure to a variety of financial
risks:
• Market risk (including currency risk and interest rate risk);
• Credit risk; and
• Liquidity risk
61
The Group’s risk management programme focuses on minimising the potential adverse
effects of these risks. The Group’s business is primarily denominated in foreign currencies.
The Group holds New Zealand dollars and other currencies to settle transactions in the
normal course of business.
30.1. Market risk
Foreign Currency Risk
The Group operates internationally and is exposed to foreign currency risk arising from
various currency exposures. Although the NZD remains the main currency for corporate
funding and Group reporting, the number of transactions denominated in NZD is diminishing
as the growth in the overseas market outweighs the operations in the New Zealand market.
As disclosed in Note 27 Segment Reporting, there was no revenue generated from the New
Zealand segment which indicates that the Group’s exposure to foreign currency risk has
increased considerably.
A significant amount of the Group’s transactions are carried out in currencies other than in
New Zealand Dollars. The Group has debt or liabilities denominated in foreign currency
which is not hedged. Exposures to currency exchange rates arise from the Group’s overseas
company holdings (Ireland and United Kingdom), and foreign currency denominated income
for New Zealand domiciled companies (royalties, store openings, design and other franchise
fees, product sales). These are primarily denominated in European currency (EURO) and
Pound Sterling (GBP).
As disclosed in Note 27 Segmental Reporting, global franchising and retail and UK & Ireland
franchising are all primarily transacted in foreign currency.
Management has performed a sensitivity analysis for any potential foreign currency risk
faced by the group. Based on the current year results, in the event that the NZD weakens
against GBP and GBP/NZD exchange rate decreases by 5%, the impact on the group result is
the profit will be increased by $12,460. If the GBP/NZD exchange rate increases by 5%, the
group profit will be reduced by $24,920.
In the event that the NZD weakens against the Euro and EURO/NZD exchange rate increases
or decreases by 5%, the impact on the group result is the profit will be decreased by $4,956.
If the EUR/NZD exchange rate increases by 5%, the group profit will be increased by $9,912.
More significant is the revaluation of the intercompany balances on consolidation as these
are denominated in GBP and Euro in the UK and Ireland companies and, due to the large
62
balances involved, result in a large movement going through the foreign currency translation
reserve. In FY24, both the GBP and Euro weakened against the NZD (by 6.8% and 3.6%
respectively) resulting in an increase to the foreign currency translation reserve of $1,097,000
(FY23: $971,000).
30.2. Credit Risk
Credit risk is managed on a Group basis. The Group generally trades with franchises and
banking counterparties who are well established. Receivables balances are managed by and
reported regularly to senior management according to the Company’s credit management
policies and procedures. The amount outstanding at the reporting date represents the
maximum exposure to credit risk.
Trade receivables
The Group applies the NZ IFRS 9 simplified approach to measuring expected credit losses
which uses a lifetime expected loss allowance for all trade receivables.
To measure the expected credit losses, trade receivables have been grouped based on the
days past due.
The expected loss rates are based on the payment profiles of sales over a period of 24
months before 31 March 2024 and the corresponding historical credit losses experienced
within this period. The historical loss rates are adjusted to reflect current and forward-looking
information on macroeconomic factors affecting the ability of the customers to settle the
receivables. The Group has evaluated available forward-looking information and has
concluded that there is no indication that historical loss rates should be adjusted.
Lease receivables
The Group applies the IFRS 9 simplified approach to measuring expected credit losses which
uses a lifetime expected loss allowance for all lease receivables.
To measure the expected credit losses, lease receivables have been grouped based on
shared credit risk characteristics.
The expected loss rates are based on the historical credit losses experienced for each credit
risk group within a period of 24 months before 31 March 2024. The historical loss rates are
adjusted to reflect current and forward-looking information on macroeconomic factors
affecting the ability of the customers to settle the receivables. The Group has evaluated
63
available forward-looking information and has concluded that there is no indication that
historical loss rates should be adjusted.
30.3. Liquidity Risk
The Group maintains regular forecasts of liquidity based on expected cash flows. The table
below analyses the Group’s financial liabilities into relevant groups based on the remaining
period at the reporting date to the end of the contractual date. The amounts disclosed are
the contractual undiscounted cash flows.
At 31 March 2024
Less
than 1
year
Between 1
and 5 years
Over
5 years
Carrying
Amount
$'000 $'000 $'000 $'000
Trade payables 3,014 - - 3,014
Related party payables 649 - - 649
Other payables 858 858
Short term finance
loans 1,132 - - 1,132
Related party loans 1,007 1,178 - 1,852
Lease Liabilities 4,279 16,149 9,851 23,055
10,939 17,327 9,851 30,560
At 31 March 2023
Less
than 1
year
Between 1
and 5 years
Over
5 years
Carrying
Amount
$'000 $'000 $'000 $'000
Trade payables 3,318 - - 3,318
Related party payables 441 - - 441
Other payables 1,473 - - 1,473
Short term finance
loans 2,685 352 - 3,037
Related party loans 988 1,144 - 2,132
Lease Liabilities 4,075 12,699 11,823 21,146
12,980 14,195 11,823 31,547
For further details in relation to the liquidity risk refer to Note 4.
30.4. Capital risk management
The Group’s objectives when managing capital is to safeguard the Group’s ability to continue
as a going concern in order to provide returns to shareholders and benefits to other
stakeholders and to maintain an optimal capital structure. The Group currently monitors
64
capital based on cash requirements and, to maintain or adjust the capital structure, generally
issues new shares to investors through share issues. The Group and the Company have not
been subject to any externally imposed capital requirements during the period.
The Group is currently in need of additional capital injections to be able to execute its strategy.
It is planning to obtain injections in FY25 in addition to that raised and debt conversions in
FY24. For further details of this refer to Note 4.
31. Financial instruments by category
31-Mar 31-Mar
2024 2023
$'000 $'000
Financial assets at amortised cost
Cash and cash equivalents 1,174 445
Trade and other receivables 1,718 1,323
Lease receivables 23,055 19,582
25,947 21,350
Financial liabilities at amortised cost
Trade payables 3,014 3,138
Borrowings and other liabilities 3,083 4,051
Lease liability 23,055 21,314
Related party payables 649 441
29,801 28,944
32. Post-reporting date events
There are no post-reporting date events to be disclosed.
65
Statutory Information and Corporate Governance
SUBSTANTIAL PRODUCT HOLDERS
The following information is provided in compliance with section 293 of the Financial
Markets Conduct Act 2013 and is stated as at 31 March 2024. The total number of
voting financial products of Cooks Coffee Company Limited at that date was
59,519,349 and ordinary shares are the only such product on issue.
Substantial Security Holder Shares Held
Graeme Keith Jackson, Patricia Frances Jackson & Philip
Mack Picot
11,551,757
Jackson & Associates Limited 1,762,792
Michael Ambrose 1,050,000
Paul Valentine Mark Elliott 552,129
Mike Hutcheson 88,020
Total Number of Shares Held:
15,004,698
Director Dealings in Company Securities
There have been the following transactions in respect of Cooks Coffee Company
Limited (CCC or Company) securities by directors of the Company (Directors) in the
12 months ending 31 March 2024:
- Jackson & Associates Limited, converted $50,000 into 250,000 ordinary shares.
- Paul Elliot, converted $61,333 into 325,833 ordinary shares.
- Michael Ambrose, converted $70,000 into 350,000 ordinary shares.
Interests Register
CCC has D&O insurance which ensures that generally, Directors and officers will incur
no monetary loss as a result of actions undertaken by them. CCC has entered an
indemnity in favour of its Directors for the purposes of Section 162 of the Companies
Act 1993.
66
Use of Company Information
The Board received no notices from Directors wishing to use Company information
received in their capacity as Directors which would not have been ordinarily available.
Other Director Interests
Other directorships held during the FY24 held by CCC Directors:
Graeme Keith Jackson
Arana Holdings Limited Cooks Investment Holdings Limited
Ascension Capital Limited Dairy Farm Investments Limited
Weihai Holding Limited Dairy Farm Investments (Ruawhata) Limited
Jackson & Associates Limited Nikau Trust
Michael George Rae Hutcheson
2 Life Limited Image Centre Publishing Limited
Eschool Holdings Limited Patiki Farm Limited
Eschool Limited Raye Blumenthal Freedman Trust
Attain Limited Hunch Limited
Hotfoot Retail Services Limited Tangible Media Limited
Graeme Dingle Endowment Fund The Lighthouse Ideas Company Limited
Image Centre Holdings Limited Tradewinds Investment Trust
Michael George Ambrose
Minoce Investments Limited Garra International Limited
Chateau Marlborough Hotel 2014 Limited Australian Lobster Company (GP) Limited
Deep Creek Fruits GP Limited Deltop Holdings Limited
Arvida Group Limited FLC Trustee Limited
Southern Fruits International GP Limited Lobster Management GP Limited
Melrose Equities Limited Australia Quota Holdings GP Limited
Almonte Holdings Limited Silverstream lifestyle Retirement Village Limited
Ashville Consultancy Limited Senior Move Managers Limited
Chateau Marlborough Holdings 2014
Limited
Fiordland Lobster Company Limited
Paul Valentine Mark Elliott
Agribusiness Investments NZ
Limited
Elliott Capital Advisors Limited
Agribusiness Solutions NZ Limited Revive Finance Limited
Ignite Finance Limited Restore Finance Limited
67
Ignite Solutions Limited Ignite Nominees Limited
Peihuan Wang
Shanghai Shiban Supply Chain Co.
Ltd
Spar China Group LTD.
Jiajiayue Group Limited. (China) Weihai Station Limited
Jiajiayue Holding Group Limited
(CHINA)
Elena Garside
Garside & Garside Ltd
Spread of Quoted Security Holders as at 31 March 2024 including
voting and non-voting shares:
Shareholders Shares
Range Number % Number %
1-1,000 4 1.36 1,490 0.00
1,001-5,000 125 42.37 279,069 0.47
5,001-10,000 33 11.19 246,467 0.41
10,001-50,000 69 23.39 1,558,443 2.60
50,001-100,000 21 7.12 1,464,025 2.44
100,001 and over 43 14.58 56,452,954 94.08
Total 295 100.00 60,002,448 100.00
68
20 Largest Holdings of Equity Securities as at 9 May 2024 including
voting and non-voting shares:
Rank Investor Name Total Units
% Issued
Capital
1 Keith Jackson Interests 13,314,549 22.19%
2 Jiajiayue Holding Group Interests 10,591,374 17.65%
3 Yunnan Health and Tourism 6,714,643 11.19%
4 Crown Kj Nominees Limited 4,086,769 6.81%
5 Graham Hodgetts 3,657,204 6.10%
6 Adg Investments Limited 2,813,317 4.69%
7 Alistair Tillen 1,353,621 2.26%
8 Scott Francis Vernon & 1,242,812 2.07%
9
Link Market Services Trustees 1,236,350 2.06%
10 Michael John Ambrose & 1,050,000 1.75%
11 Suhua He 927,679 1.55%
12 PKB Trustees Limited 925,648 1.54%
13 David Hodgetts 819,996 1.37%
14 Sezan Walker 816,606 1.36%
15 New Zealand Depository
Nominee
791,447
1.32%
16 Esquires Coffee Holdings 786,752 1.31%
17 Paul Valentine Mark Elliott 552,129 0.92%
18 Trinity Portfolio Limited 514,767 0.86%
19 Imoya Investments Limited 440,000 0.73%
20 New Zealand Central Securities 436,647 0.73%
Total – Top 20 53,072,310 88.45%
69
Employee Remuneration
During the accounting period, the following number of CCC’s employees/independent
contractors (not being a director) received remuneration and other benefits in that
person’s capacity as employee/independent contractor of CCC, the value of which
exceeded $100,000 per annum:
Remuneration
Number of
Employees
2024
Number of
Employees
2023
$100,000-$120,000 1 3
$120,000-$140,000 1 1
$140,000-$160,000 - 2
$160,000-$180,000 2 -
$180,000-$200,000 1 1
$220,000-$240,000 - 2
$260,000-$280,000 1 2
70
Director Remuneration and Other Benefits
During the accounting period, the Directors of the Company received the following
remuneration:
Remuneration Directors’
Fees
Executive
Salary
Share based
payments
Mike Hutcheson 39,600 - -
Graeme Keith Jackson - 240,000 -
Paul Elliot 40,000 - -
Michael Ambrose 40,000 - -
Elena Garside 61,603 - -
Donations
No donations were made in the 12-month financial period ended 31 March 2024.
71
Corporate Governance Statement
Cooks Coffee Company Limited (CCC) believes in the benefit of good corporate
governance and the value it provides for shareholders and other stakeholders. CCC is
committed to ensuring that the company meets best practice corporate governance
principles, to the extent that it is appropriate for the nature of CCC’s operations.
The board of CCC is responsible for establishing and implementing the company’s
corporate governance frameworks and is committed to fulfilling this role in accordance
with best practice having regard to applicable laws, the NZX Corporate Governance
Code and the Financial Markets Authority Corporate Governance – Principles and
Guidelines.
CCC has implemented policies and processes to establish, shape and maintain
appropriate governance standards and behaviours throughout CCC that aligns with the
NZX Corporate Governance Code dated 17 June 2022 (Code). CCC has elected not to
report against the updated NZX Corporate Governance Code dated 1 April 2023.
CCC’s approach to applying the recommendations outlined in the Code is set out
below. This statement is set out in the order of the principles detailed in the Code and
explains how CCC is applying the Code’s recommendations. CCC is in compliance with
the Code, with the exception of recommendations 2.8 and 6.1 for the reasons
explained below.
Principle 1 – Code of ethical behaviour
“Directors should set high standards of ethical behaviour, model this behaviour and
hold management accountable for these standards being followed throughout the
organisation.”
Code of Ethics
The Board Charter, Code of Ethics and Code of Conduct establish the standards of
ethical behaviour expected of Directors and staff. The Board expects Directors,
management and staff to personally subscribe to these values and use them as a guide
to make decisions. The Audit and Risk Committee has responsibility for monitoring
compliance with internal processes, including compliance with the Code of Ethics.
Directors are expected to ensure the potential for conflicts of interests is minimised by
restricting involvement in other businesses or in private capacities that could lead to a
conflict. In considering matters affecting the Company, Directors are required to
72
disclose any actual or potential conflicts. Where a conflict or potential conflict is
disclosed, the Director takes no further part in receipt of information or participation in
discussions on that matter. The Board maintains an interests’ register and it is
reviewed at each board meeting.
Should any member of staff have concerns regarding practices that may conflict with
the Code of Conduct they are able to raise the matter with the Chair, as appropriate,
on a confidential basis. Directors would raise any concerns regarding compliance with
the Code of Ethics with the Chair. The Chair of the Board and the Chair of the Audit and
Risk Committee note there have been no financial matters raised in this respect in the
2023 financial year.
Financial Product Trading
Directors, officers, employees and contractors are restricted in their trading of Cooks
Coffee Company securities and must comply with the Financial Products Trading Policy
and Guidelines which is available on the Website.
Principle 2 – Board composition and performance
“To ensure an effective board, there should be a balance of independence, skills,
knowledge, experience and perspectives.”
Board Charter
The Board of Directors of the Company is elected by the shareholders to supervise the
management of the Company. The Board establishes the Company's objectives, overall
policy framework within which the business of the Company is conducted and confirms
strategies for achieving these objectives. The Board also monitors performance and
ensures that procedures are in place to provide effective internal financial control.
The Board is responsible for guiding the corporate strategy and direction of the
Company and has overall responsibility for decision making. The Board has delegated
responsibility for implementing the Board’s strategy and for managing the operations
of the Company to the Chairman.
CCC’s board operates under a written charter which defines the respective functions
and responsibilities of the board, focusing on the values, principles and practices that
provide the corporate governance framework. The charter complies with the relevant
recommendations in the Code and is reviewed annually.
73
The board uses committees to address certain matters that require detailed
consideration. The board retains ultimate responsibility for the function of its
committees and determines their responsibilities.
Nomination and appointment of directors
In accordance with CCC’s constitution and NZX Listing Rules, the directors are required
to retire by rotation and may offer themselves for re-election by shareholders each
year. Procedures for the appointment and removal of directors are also governed by
the Board Charter. CCC does not maintain a separate nomination committee, given the
current size and nature of CCC’s business, director nominations and appointments are
the responsibility of the full board.
Written Agreements with directors
CCC intends to enter written agreements with any newly appointed directors
establishing the terms of their appointment.
Director Information and Independence
The Board currently comprises of five Directors including the Chairman, Keith Jackson.
The Board met five times during the year on a formal basis. The Audit and Finance
Committee meetings are held outside these meetings on a regular basis as required.
The board considers guidance provided under the NZX Listing Rules in determining the
independence of directors. Director independence is considered annually. Directors
are required to inform the board as soon as practicable if they think their status as an
independent director has (or may have) changed.
The directors that the board considers are independent and information in respect of
directors’ ownership interests is contained in this annual report.
Diversity
Cooks recognises the wide-ranging benefits that diversity brings to an organisation and
its workplaces. Cooks’ endeavours to ensure diversity at all levels of the organisation to
ensure a balance of skills and perspectives are available in the service of our
shareholders and customers. To this end, the Board is committed to fostering a culture
that embraces diversity.
The Board also has the responsibility of monitoring and promoting the diversity of staff
and associated corporate culture, including requiring that recruitment and selection
processes at all levels are appropriately structured so that a diverse range of
74
candidates are considered and to avoid conscious and unconscious biases that might
discriminate against certain candidates.
The gender balance of the Group’s Directors, officers and all employees were as
follows: These numbers have been restated from last year’s report to take account of
the Triple Two staff in 2023 given the voluntary liquidation and the sale of the
Sunderland café in February 2024.
As at 31 March 2024 As at 31 March 2023
Directors Officers Employees Directors Officers Employees
Female 1 1 6 1 - 11
Male 5 - 7 5 1 9
Total 6 1 13 6 1 20
Director Training
All directors are responsible for ensuring they remain current in understanding their
duties as directors. Where necessary, CCC will support directors to help develop and
maintain directors’ skills and knowledge relevant to performing their role.
Separation of the Chair and Managing Director
As reported in the Chairman’s report above the company has appointed a Group CEO
with effect from 1
st
April 2024.
Principle 3 – Board Committees
“The board should use committees where this will enhance its effectiveness in key
areas, while still retaining board responsibility.”
Given the small scale of the company and board, the board currently has one standing
committee, the Audit and Risk committee. This committee operates under a specific
charter which is approved by the Board and will be reviewed annually. Any
recommendations made by these committees are recommendations to the board.
75
Directors
Name Status Current/Resigned Sub-committee
membership
Attendance*
Keith Jackson Chairman
Not Independent
Appointed 18/8/08 Audit & Finance 5
Paul Elliott Non-Executive
Independent
Appointed 30/5/19 Audit & Finance 5
Mike
Hutcheson
Non-Executive
Independent
Appointed 3/10/13 Audit & Finance 5
Michael
Ambrose
Non-Executive
Independent
Appointed 29/11/21 Audit & Finance 5
Peihuan
Wang
Non-Executive
Not-Independent
Appointed 29/4/16 - 4
Elena Garside Non-Executive
Independent
Appointed 7/11/22 - 4
Keith Jackson, Executive Chairman
Keith has an extensive background in management and governance with particular
emphasis on the food and dairy industries. He was CEO of Tegel Foods for 16 years,
Deputy Chairman of Ernest Adams and Managing Director of Independent Dairy
Producers, a fresh milk company. He was also a founding partner of Dairy Farm
Investments and Dairyland Products.
In 2008 he founded Cooks via a merger of four companies and the company acquired
the global rights to the Esquires Coffee brand (excluding Australia and New Zealand) in
2013.
Michael Ambrose, Independent Director
Michael is an experienced Company Director, business consultant & Chartered
Accountant with a broad range of governance, financial, general management,
strategic & IPO skills.
Michael was the creator & founding Director of Arvida Group Ltd. This Public Company
was listed in 2014 and is comprised of 32 Retirement Villages and Aged Care facilities.
76
He is also a Director of Fiordland Lobster Company & related Companies, Chairman of
the international board of Garra International Limited, a meat & chicken trading
company which has its head office in Brazil, Chairman of the Board of Deep Creek
Fruits LP, a start-up Cherry operation that acquired 140 hectares of land in Central
Otago which has now been planted & irrigated following the initial capital raise from 37
investors totalling $16.1 million. Chairman of the Board of Chateau Hotel Marlborough
Ltd, Chairman of Senior Move Managers Limited, which provides a complete relocation
service to seniors moving house or into Retirement Villages or individual homes.
Elena Garside, Independent Director
Elena who is UK-based, has significant experience in financial and ESG communications
with a focus on advising on current and emerging trends within these fields, including
responsible investing, and sustainable finance.
Her clients have included FTSE 100 and FTSE 250 companies, as well as privately owned
businesses and global corporations. Elena started her career in journalism before
becoming a PR consultant with Bankside Consultants, Hudson Sandler, and New
Century Media.
Elena is the founder and CEO of Garside & Garside Limited which consults on ESG,
media relations and reputational matters. She holds a degree in journalism from St
Petersburg State University and the London College of Communication.
Mike Hutcheson, Independent Director
Mike co-founded leading advertising agencies; Colenso BBDO and Hutcheson Knowles
Marinkovich, culminating his advertising career in Auckland as Managing Director of
Saatchi and Saatchi.
He has written five books including his latest on creative ways to reinvent yourself post
Covid. He has been named Business Columnist of the Year in the Magazine Publisher’s
Awards. He is a director of a number of private and public companies and is a regular
television guest and commentator. In 2021 he was inducted into the Marketing Hall of
Fame.
He has a Master of Philosophy degree (1st Class Hons) – his thesis was on the Alchemy
of Innovation in New Zealand business He is a Fellow of the Chartered Institute of
Marketing and in 2017 he was appointed an Adjunct Professor at Auckland University
of Technology.
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Paul Elliott, Independent Director
Paul Elliott has extensive experience as CEO and CFO of major New Zealand
corporates, including MetLife care, Zespri, Pacific Retail Group and, more recently,
Asset Finance Limited, a regional non-bank deposit taker. He has served as a director
of both publicly-listed and privately held companies and is a chartered member of the
New Zealand Institute of Directors.
For the past nine years he has been a partner in a boutique corporate finance
business, Time Capital NZ. During that time, he has acted as advisor in a number of
business acquisitions and turnaround assignments and has managed due diligence
projects on behalf of several mergers. He continues to provide advisory services to
New Zealand corporates and several high-net-worth individuals as a partner in Time
Capital.
Peihuan Wang, Director
Peihuan Wang is currently the Chairman and General Manager of Shandong Jiajiayue
Investment Holdings Co. Limited and Vice President of the China Chain Store and
Franchise Association. Mr Wang has been the recipient of a number of awards in China
including ‘the National Quality Excellent Manager’, ‘Person of the Year - Chinese Chain
Industry’, ‘Person of the Year - Chinese Retail Industry’, and ‘Weihai City Mayor’s Quality
Award’. Mr Wang is of Chinese nationality and resides in the Shandong Province. He
brings a wealth of knowledge to the Board. JJY operates more than 1,000 supermarkets
in China and employs more than 50,000 staff.
Board Skills Matrix
The six individuals who sit at our board table have diverse insights, backgrounds and
views. As individuals they are each highly regarded with various specialist skills and
wide experiences. The Board have a common vision for the future of the business with
multiple disciplines and individual experiences in many sectors and markets that are
bought to the table.
All Directors except Messrs Jackson & Wang are independent.
As reported above Mike Hutcheson will retire in June as part of the transition of the
Board to the UK where the company’s operations are based.
Directors followed the recommendations in the NZX Corporate Governance Code
during the financial year to 31
st
March 2024.
78
Directors Fee Pool
The total pool of Directors fees is NZ$250,000. Total fees paid in FY24 were
NZ$180,000. There are no additional benefits although it is planned to introduce a
share options plan for Directors and Senior Managers in the future.
Audit and Risk Committee
The Audit and Risk Committee Charter sets out the objectives of the Audit and Risk
Committee which are to provide assistance to the board in fulfilling its responsibilities
in relation to the company’s financial reporting, internal control’s structure, risk
management systems and the external audit function.
The audit committee currently comprises Paul Elliott (as Chair), Keith Jackson, Mike
Hutcheson and Michael Ambrose. Paul Elliott, Mike Hutcheson and Michael Ambrose
are considered Independent Directors for the purposes of NZX Listing Rule 2.1.1. All
members of the Audit and Risk Committee have appropriate financial experience and
an understanding of the industry in which CCC operates.
The Audit and Risk Committee focusses on audit and risk management and specifically
addresses responsibilities relative to financial reporting and regulatory compliance.
The Audit and Risk Committee is accountable for ensuring the performance and
independence of the external auditor, including that CCC provides for 5-yearly rotation
of either the external auditor or the lead audit partner.
The committee provides a forum for the effective communication between the board
and external auditors. The responsibilities of the committee include:
• reviewing the appointment of the external auditor, the annual audit plan, and
addressing any recommendations from the audit;
• reviewing any financial information to be issued to the public; and
• ensuring that appropriate financial systems and internal controls are in place.
The Audit and Risk Committee may have in attendance the Managing Director and/or
others including the external auditor as required from time to time.
79
Audit Rotation
The company note that the lead Audit Managing Partner has now completed 5 years
with Cooks. As part of the company’s focus on the UK & Ireland and with the operating
businesses being outside New Zealand it is planned to relocate the Audit to the UK for
the next financial year.
Takeover Response Protocol
The board has protocols in place that set out the procedure to be followed if there is a
takeover offer for CCC. This procedure is set out in the board charter.
Principle 4 – Reporting and Disclosure
“The board should demand integrity in financial and non-financial reporting, and in
the timeliness and balance of corporate disclosures.”
Continuous Disclosure
The board focusses on providing accurate, adequate and timely information both to
existing shareholders and the market generally. This enables all investors to make
informed decisions about CCC.
CCC, as a company listed on the NZX Main Board, has an obligation to comply with the
disclosure requirements under the NZX Listing Rules, and the Financial Markets
Conduct Act 2013. CCC has a Continuous Disclosure Policy designed to ensure this
occurs. CCC recognises that these requirements aim to provide equal access for all
investors or potential investors to material price-sensitive information concerning
issuers or their financial products. This in turn promotes confidence in the market.
The Continuous Disclosure Policy outlines the obligations for CCC in satisfying the
disclosure requirements. CCC’s Disclosure Officer (currently the Chair) is responsible
for ensuring compliance with the NZX continuous disclosure requirements and
overseeing and co-ordinating disclosure to the exchange.
80
Financial Reporting
The Board monitors:
• available cash in the Company to ensure there are sufficient funds available
to satisfy debts as they fall due; and
• the continued support of the Company’s principal creditors, to ensure their
continued support of the Company and continued intention to not call up
amounts owing to them.
The Board is committed to keeping the market and its shareholders informed of all
material information relating to the Company through meeting the obligations
imposed under the Listing Rules and relevant legislation such as the Financial Markets
Conduct Act 2013.
CCC seeks to make disclosures in a timely and balanced way to ensure transparency in
the market and equality of information for investors. The Company also recognises the
benefits of providing other releases that broaden the market’s knowledge of the
Company’s business and financial performance and seeks, where appropriate, to use
communications that achieve this objective.
The website is a key channel for the distribution of Cooks’ information and is updated
after documents are disclosed on the NZX.
The Chair of the Board and the CEO are responsible for the day to day management of
ensuring these obligations are met. The Board will review compliance with the
continuous disclosure obligations at every board meeting.
Principle 5 – Remuneration
“The remuneration of directors and executives should be transparent, fair and
reasonable.”
Directors’ Remuneration
The Remuneration Committee makes recommendations to the board on remuneration
matters in keeping with the Remuneration Policy which outlines the key principles that
influence CCC’s remuneration practices. The committee is also responsible for making
recommendations to the board on the remuneration of the Chair. Directors’ fees are
determined by the board on the recommendation of the committee within the
aggregate director remuneration pool approved by shareholders.
Details of remuneration paid to directors are disclosed in this annual report.
81
Principle 6 –Risk Management
“Directors should have a sound understanding of the material risks faced by the
issuer and how to manage them. The Board should regularly verify that the issuer
has appropriate processes that identify and manage potential and material risks.”
The board considers its material risks are any decision to realise or make new
investments and to carefully manage cash flow. The Managing Director reports
regularly to the full board on these key risks, and operating expenses are kept to a
bare minimum.
Key risk management tools used by CCC include the Audit and Risk Committee function
and outsourcing certain functions to service providers (such as legal and audit). CCC
also maintains insurance policies that it considers adequate to meet insurable risks.
The board of CCC will continue to regularly consider any potential risks and its risk
management processes and adapt these should the nature and size of the business
change in the future. While CCC is comfortable this approach to risk is sufficient, it
does not comply with recommendation 6.1 of the Code as it does not have a formal
risk management framework.
Health and Safety
The board does not consider it necessary to maintain a specific health and safety
committee. The full board of CCC recognise the importance of health and safety
considerations, and will continue to assess any risks, management and performance in
this regard in the future.
Principle 7 – Auditors
“The board should ensure the quality and independence of the external audit
process.”
The Audit and Risk Committee makes recommendations to the board on the
appointment of the external auditor as set out in Audit and Risk Committee Charter.
The committee also monitors the independence and effectiveness of the external
auditor and reviews and approves any non-audit services performed by the external
auditor.
82
Principle 8 – Shareholder rights and relations
“The board should respect the rights of shareholders and foster constructive
relationships with shareholders that encourage them to engage with the issuer.”
Information for Shareholders
The Company aims to ensure that shareholders are informed of all major
developments affecting the Company affairs. Information is communicated to
shareholders in the Annual Report, Interim Report, and regular NZX announcements,
including major share transactions, acquisitions, store expansion and any personnel
changes of significance.
The company website provides an overview of the business and information about
CCC. This information includes details of investments, latest news, investor
information, key corporate governance information, and copies of significant NZX
announcements. The website also provides profiles of the directors and the senior
executive team. Copies of previous annual reports, financial statements, and results
presentations are available on the website.
Shareholders have the right to vote on major decisions of the company in accordance
with requirements set out in the Companies Act 1993 and the NZX Listing Rules.
Communicating with Shareholders
CCC endeavours to communicate regularly with its shareholders through its market
updates and other investor communications. The company receives questions from
time to time from shareholders and has processes in place to ensure shareholder
communications are responded to in a timely and accurate manner.
CCC’s website sets out appropriate contact details for communications from
shareholders, including the phone number and email address of the Chair, Keith
Jackson. CCC provides the opportunity for shareholders to receive and send
communications by post or electronically.
CCC sends the annual shareholders notice of meeting and publishes it on the company
website as soon as possible and at least 21 days before the meeting each year.
83
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 Ambrose
Michael George Rae Hutcheson
Peihuan Wang
Paul Valentine Mark Elliott
Elena Garside
Solicitors:
Chapman Tripp, Auckland
Bankers: ANZ Bank, Auckland and ASB Bank, Auckland
Auditors: William Buck Audit (NZ) Limited
Share registry: MUFG Pension and Market Services (was called Link Market
Services Limited), Auckland and Aquis Exchange Ltd, UK
Data sourced from publicly available filings. Our datasets may not be complete. Automated analysis can produce errors. If you believe any data on this page is incorrect, please contact us at hello@nzxplorer.co.nz. For informational purposes only. Not investment advice.
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