Summary of Financial Results for the Second Quarter Ended August 31, 2021
[IFRS] (Consolidated)
October 14, 2021 | ||||
Company | create restaurants holdings inc. | Listed on the TSE | ||
Stock Code | 3387 | URL: https://www.createrestaurants.com | ||
Representative | Jun Kawai, President | |||
Contact | Genta Ohuchi, Director, CFO, Management of Accounting Dept. | T E L: +81-3-5488-8022 | ||
Expected date of filing of quarterly report: October 14, 2021 | Expected starting date of dividend payment: November 15, 2021 | |||
Preparation of quarterly supplementary financial document: Yes | ||||
Quarterly results briefing: Yes (for institutional investors and analysts) |
(Rounded down to million yen)
1. Consolidated business results for the six months ended August 2021 (March 1, 2021 through August 31, 2021)
(1) Consolidated results of operations | (% change from the previous corresponding period) | |||||||||||||||
Profit | Total comprehensive | |||||||||||||||
Revenue | Operating profit | Profit before taxes | Profit for the period | attributable to | ||||||||||||
profit for the period | ||||||||||||||||
owners of parent | ||||||||||||||||
Million yen | % | Million yen | % | Million yen | % | Million yen | % | Million yen | % | Million yen | % | |||||
Six months ended | 34,493 | 7.7 | 7,314 | - | 7,170 | - | 5,267 | - | 4,823 | - | 5,473 | - | ||||
Aug. 2021 | ||||||||||||||||
Six months ended | 32,031 | -49.6 | -9,760 | - | -10,198 | - | -10,169 | - | -9,165 | - | -10,497 | - | ||||
Aug. 2020 | ||||||||||||||||
Basic earnings | Diluted earnings | |||||||||||||||
per share | per share | |||||||||||||||
Yen | Yen | |||||||||||||||
Six months ended | 25.83 | 25.82 | ||||||||||||||
Aug. 2021 | ||||||||||||||||
Six months ended | -49.07 | -49.07 | ||||||||||||||
Aug. 2020 | ||||||||||||||||
(Reference) Adjusted EBITDA: Six months ended Aug. 2021: 15,121 million yen (-%) Six months ended Aug. 2020: -1,006 million yen (-%)
(Note 1) "Basic earnings per share" and "Diluted earnings per share" are calculated based on "Profit attributable to owners of parent." (Note 2) As for the diluted earnings per share for the six months ended August 2021, dilutive shares have no dilution effect because the
exercise of stock options issued by consolidated subsidiary decreases quarterly loss per share.
(Note 3) Adjusted EBITDA is disclosed as useful comparative information on the business performance of the Group. For definitions and calculation methods of Adjusted EBITDA, please refer to "1. Qualitative Information on Results for the Current Quarter
(1) Qualitative information on the consolidated financial results" on page 2 of the attached document.
(Note 4) During the previous fiscal year, the Company finalized the provisional accounting treatment for business combinations, and the related consolidated operating results for the six months of the previous fiscal year reflect the provisional accounting treatment.
(2) Consolidated financial position
Equity | Ratio of | |||
Total assets | Total equity | attributable to | equity attributable | |
owners of parent | to owners of parent | |||
Million yen | Million yen | Million yen | % | |
As of Aug. 2021 | 158,200 | 28,316 | 21,657 | 13.7 |
As of Feb. 2021 | 161,966 | 23,264 | 17,052 | 10.5 |
2. Dividends
Annual dividend | |||||
End of 1Q | End of 2Q | End of 3Q | Year-end | Total | |
Yen | Yen | Yen | Yen | Yen | |
Year ended Feb. 2021 | - | 0.00 | - | 0.00 | 0.00 |
Year ending Feb. 2022 | - | 1.50 | |||
Year ending Feb. 2022 (forecast) | - | 3.00 | 4.50 |
(Note) Revisions to dividend forecast for the current quarter: Yes
3.Forecast of consolidated business results for the fiscal year ending February 2022 | |||||||||||
(March 1, 2021 through February 28, 2022) | (% change from the previous corresponding period) | ||||||||||
Revenue | Operating profit | Profit before taxes | Profit for the year | Profit attributable to | Basic profit | ||||||
owners of parent | per share | ||||||||||
Million yen | % | Million yen | % | Million yen | % | Million yen | % | Million yen | % | Yen | |
Year ending Feb. | 91,200 | 22.5 | 10,800 | - | 10,200 | - | 7,400 | - | 6,500 | - | 34.80 |
2022 | |||||||||||
(Note) Revisions to business forecast for the current quarter: Yes | |||||||||||
(Reference) Adjusted EBITDA: | Year ending February 2022 (Forecast): 27,100 million yen (428.2%) |
*Notes
- Changes in significant subsidiaries during the period (changes in specified subsidiaries accompanying changes in the scope of consolidation): None
- Changes in accounting policies, accounting estimates and restatement
① Changes in accounting policies required under IFRS
②Changes in accounting policies due to reasons other than ① ③Changes in accounting estimates - Shares outstanding (common stock)
① Number of shares outstanding at the end of period (treasury stock included)
As of August 2021 | 189,445,284 shares |
As of February 2021 | 189,445,284 shares |
②Treasury stock at the end of period | |
As of August 2021 | 2,661,050 shares |
As of February 2021 | 2,662,150 shares |
③Average number of stock during period (quarterly cumulative period)
Six months ended August 2021 | 186,783,262 shares |
Six months ended August 2020 | 186,781,037 shares |
- Yes
- None
- None
(Note) Treasury stock to be deducted for the calculation of the number of treasury stock at the end of the period and the average number of stock during period (quarterly cumulative period) include the Company's shares held by the Custody Bank of Japan, Ltd. (trust account) as a trust asset related to the Employee Incentive Plan "Trust-type ESOP for Employees."
*Quarterly financial summary is not subject to the quarterly review procedures by certified public accountants or auditing firms.
*Explanation regarding appropriate use of business forecasts and other special instructions
- Our Group adopted International Financial Reporting Standards ("IFRS").
- Forecasts regarding future performance in this material are based on information currently available to the company and certain assumptions that the company deems to be reasonable at the time this report was prepared. Actual results may differ significantly from the forecasts due to various factors. Please refer to page 3 of the attached document for the precautions for using the prerequisites for business forecasts.
○ Table of Contents of the Appendix | ||
1. Qualitative Information on Results for the Current Quarter.................................................................................................... | ... 2 | |
(1) | Qualitative information on the consolidated financial results............................................................ ....................................... | 2 |
(2) | Qualitative information on consolidated financial position............................................................... ....................................... | 2 |
(3) | Qualitative information on the consolidated business forecasts.............................................................................................. | . 3 |
2. Condensed Quarterly Consolidated Financial Statements and Major Notes .................................................... ......................... | 4 | |
(1) | Condensed Quarterly Consolidated Statements of Financial Position............................................................ .......................... | 4 |
(2) | Condensed Quarterly Consolidated Statements of Income and Statements of Comprehensive Income.................................. | 6 |
(3) | Condensed Quarterly Consolidated Statements of Changes in Equity................................................................................... | . 10 |
(4) | Condensed Quarterly Consolidated Statement of Cash Flows................................................................................................ | 11 |
(5) | Notes on the Condensed Quarterly Consolidated Financial Statements....................................................... .......................... | 13 |
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1. Qualitative Information on Results for the Current Quarter
(1) Qualitative information on the consolidated financial results
In the second quarter of the current fiscal year, the Japanese economy was affected by the outbreak of COVID-19, as same as the previous fiscal year. The State of Emergency was lifted on June 20, 2021 except for Okinawa Prefecture. However, on July 12 it was redeclared in Tokyo for the fourth time, and the target area was subsequently expanded to 21 prefectures, and the period was extended to September. In addition, the stricter COVID-19 measures have been applied intermittently in various regions, and economic activities have continued to be restrained as a result of these measures, and corporate activities and consumer spending have been weak. However, it is expected to show signs of recovery as vaccination rate is on the rise and the government has formulated a policy to normalize the socio-economy by easing restrictions.
In the restaurant industry, there is a need to respond to lifestyle changes, such as the increase in remote workers and the self- restraint of business dinners. In addition, the number of customers had been declining reflecting the suspend of operations and shortening of business hours, etc. due to the State of Emergency by governments and local governments and various requests related to stricter COVID-19 measures. However, these harsh business environment shows signs of recovery with the expansion of the subsidy system by each local government.
Under these circumstances, our group cooperated to prevent the spread of infections and to protect the health of customers and our employees. In response to the requests from governments and local governments for shorter operating hours and the ban on serving alcohol, we temporarily suspended many outlet operations, particularly in the izakaya format in downtown areas. Meanwhile, since the previous fiscal year, our group has continued to strengthen operations to reduce personnel expenses, rent, and other fixed costs. At the same time, the Group has promoted a shift to a lean cost structure by thoroughly closing outlets, mainly unprofitable outlets. At the same time, the Group has established a system that can respond to the decline in revenue due to the impact of COVID-19 by applying for employment adjustment subsidies and subsidy for shorten operating hours, etc. In addition, we prepared to establish a joint venture with consolidated subsidiary SFP Holdings Co., Ltd. to undertake purchasing planning functions with the aim of reducing costs and maximizing the value of foodstuffs. Under the leadership of the newly launched DX Promotion Office, we also focused on preparations for the introduction of mobile orders and the use of apps tailored to business formats as the Group's digital transformation (DX) efforts. As a result, during the second quarter of the current fiscal year, our performance has been severely affected by COVID-19 but was able to secure a profit in operating profit and other each profit. As a result of establishing a system that can respond to the decline in revenue through the aforementioned measures, we have determined that we could ensure profitability at each profit in and after the third quarter of the fiscal year under review.
The Company has secured sufficient working capital on hand through borrowings from financial institutions executed in the previous fiscal year, etc. until the expansion of infection is controlled. In addition, as a result of procuring funds through a perpetual subordinated loan in February 2021, financial stability has also been ensured.
As a result, in the second quarter of the current fiscal year, revenue was 34,493 million yen (up 7.7% year on year), operating profit was 7,314 million yen (9,760 million yen of loss in the same period of the previous fiscal year), profit before taxes was 7,170 million yen (10,198 million yen of loss in the same period of the previous fiscal year), profit for the period was 5,267 million yen (10,169 million yen of loss in the same period of the previous fiscal year), and profit attributable to owners of parent was 4,823 million yen (9,165 million yen of loss in the same period of the previous fiscal year). Adjusted EBITDA was 15,121 million yen (-1,006 million yen in the same period of the previous fiscal year) and Adjusted EBITDA margin was 43.8% (-3.1% in the same period of the previous fiscal year) (Note 1).
(Note 1) Adjusted EBITDA and Adjusted EBITDA margin are used as a useful indicator of our financial results. The formula for Adjusted EBITDA and Adjusted EBITDA margin is as follows:
Adjusted EBITDA = Operating profit + Other operating expenses - Other operating revenues (excluding sponsorship income, employment adjustment subsidies, subsidy for cooperation of shorten operating hours, rent reductions and exemptions, etc.) + Depreciation and amortization + Non-recurring expense items (advisory expenses related to share acquisition, etc.)
・Adjusted EBITDA margin = Adjusted EBITDA/Revenue × 100
- Qualitative information on consolidated financial position
- Assets, liabilities and shareholders' equity
(Assets)
Current assets at the end of the second quarter of the current fiscal year were 47,465 million yen, increased by 1,715 million yen from the end of the previous fiscal year. This was mainly due to a decrease of 5,430 million yen in cash and cash equivalents, and an increase of 7,857 million yen in trade and other receivables.
Non-current assets at the end of the second quarter of the current fiscal year were 110,734 million yen, decreased by 5,482 million yen from the end of the previous fiscal year. This was mainly due to decreases of 5,208 million yen in property, plant and equipment and 466 million yen in guarantee deposits included in other financial assets.
(Liabilities)
The balance of liabilities at the end of the second quarter of the current fiscal year was 129,883 million yen, decreased by 8,819 million yen from the end of the previous fiscal year. This was mainly due to decreases of 4,345 million yen in bonds and borrowings and 3,595 million yen in lease obligations.
2
(Assets)
The balance of shareholders' equity at the end of the second quarter of the current fiscal year was 28,316 million yen, increased by 5,052 million yen from the end of the previous fiscal year. This was mainly due to an increase of 4,326 million yen in retained earnings.
The ratio of equity attributable to owners of the parent (equity ratio) is 13.7%.
(2) Consolidated results of cash flows
Cash and cash equivalents (hereinafter "Net cash") at the end of the second quarter of the current fiscal year was 31,881 million yen, decreased by 5,430 million yen from the end of the previous fiscal year.
The status of each cash flow in the second quarter of the current consolidated fiscal year and its factors are as follows. (Cash flows from operating activities)
Net cash provided by operating activities in the second quarter was 6,846 million yen (4,105 million yen was used in the same period of the previous fiscal year). This was mainly due to the recording of 7,170 million yen in profit before taxes, 8,156 million yen in depreciation and amortization, and -8,028 million yen in change in trade and other receivables.
(Cash flow from investing activities)
Net cash used in investing activities in the second quarter was 824 million yen (down 65.9% year on year). This was mainly due to purchase of property, plant and equipment of 640 million yen.
(Cash flow from financing activities)
Net cash provided by financing activities in the second quarter was 11,464 million yen (27,576 million yen was provided in the same period of the previous fiscal year). This was mainly due to repayments of lease liabilities of 6,616 million yen, repayments of long-term loans payable of 3,589 million yen.
(3) Qualitative information on the consolidated business forecasts
As for the outlook for the current fiscal year, the timing of the containment of COVID-19 is not clearly foreseen, and we expect that the period of instability will continue, with revenues and profits depending on the infection situation. In addition, customers' lifestyles are changing due to the impact of COVID-19, and it is still difficult to predict what kind of lifestyles will take root in the future.
We will strengthen our business foundation by securing profits by focusing on reviewing outlet locations and developing new business formats in anticipation of post-COVID era, and maintaining and reinforcing the lean management structure realized through thorough cost reductions undertaken to combat COVID-19, on the assumption that customer needs will not completely reverse.
For the fiscal year ending February 2022, we have revised the revenue forecast downward as the recovery in business environment has been slowed down due to the effects of the repeated extension of the State of Emergency and other factors. However, each profit item has been revised upward from the consolidated business forecasts announced on July 14, 2021. This was attributable to the completion and establishment of the shift to more lean cost structure, as well as the underpinning of cooperation and employment adjustment subsidies that exceeded initial forecasts. For details, please refer to the "Notice of Revision to Business Forecasts and Dividend Forecast" announced on October 14, 2021.
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create restaurants Holdings Inc. published this content on 09 November 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 09 November 2021 06:12:15 UTC.