This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 ("MAR"), and is disclosed in accordance with the company's obligations under Article 17 of MAR.

Barkby Group PLC

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

Interim results

Barkby announces its unaudited interim results for the 26 weeks ended 31 December 2022.

Charles Dickson, Executive Chairman, commented:

"We have had a productive first half as we implement our plan to refocus the business on Roadside assets. Our development pipeline is progressing well and attracting high-quality nationwide tenants, underpinning reliable, long term income streams.

"At the same time, we have been active in sourcing a pipeline of attractive assets to fulfil our objective of creating a portfolio of modern, ESG compliant Roadside real estate investments. These efforts have been aided by the downward pressure on real estate valuations, expanding the array of exciting opportunities open to us.

"In the pub business, we have emerged from a challenging trading environment with a solid and robust business. We are now focused on managing the tight supply of experienced staff and enhancing the guest experience as we move into the busier spring and summer months.

"We continue to explore funding options to implement our strategy whilst managing our existing development activities and look ahead with optimism."

OPERATIONAL HIGHLIGHTS

Real Estate

·      The Group's focus is to build and scale a high-quality, substantial portfolio of modern, ESG compliant Roadside real estate investments.

·      Construction has progressed well at our commercial schemes at Wellingborough and Maldon.

·      Wellingborough is scheduled to complete construction in April 2023 and it is our intention to hold the development on our balance sheet as an investment as we grow a high-quality commercial property portfolio. The total contracted rent will be £238,000 per annum with contracted tenants including Greggs Plc, Formula One Autocentres Ltd, City Plumbing Supplies Holdings Ltd and C. Brewers & Sons Ltd.

·      Maldon is scheduled to complete construction by the end of May 2023. It is also our intention to hold this development on our balance sheet. The total expected rent will be £280,000 per annum with contracted tenants including Costa Coffee Ltd, Formula One Autocentres Ltd and Toolstation Ltd with the remaining unit under offer.

·      A revised planning application has been submitted for a 27,000 sq.ft. scheme at Swindon and we expect a decision imminently. The scheme will be anchored by a national Drive Thru operator with a trade and industrial occupiers taking the remainder of the site.

·      Given downward valuation pressure in the commercial property market over the last six months we are seeing high quality assets at attractive valuations becoming available with a lot less competition to acquire.

Barkby Pubs

·      During the period we added the tenancy of The Eliot Arms, bringing the estate to nine pubs with 75 bedrooms.

·      Total revenue remained robust, increasing to £3.4m in the period (Dec 2021: £3.2m). Like-for-like revenue declined by 6% in comparison to the same period in 2021.

·      Labour shortages and increasing pay demands resulted in a 63% increase in operational labour costs, with direct labour increasing by £0.7m.

·      Overall, Barkby Pubs made an EBITDA loss of £0.3m (Dec 2021: EBITDA profit of £0.5m).

·      Improving labour management is currently our main operational focus in preparation for the traditionally busy spring and summer seasons.

·      Majority of our energy contracts were fixed in December 2020 until December 2023, providing protection from the energy cost pressures facing the industry.

Barkby Investments

·      Following our announcement in July 2022 to sell our non-core businesses, we provide the following update:

o  Workshop Coffee - we are in active talks with the Management team around an externally backed MBO and will update shareholders in due course.

o  Centurian Automotive ("Centurian") - the existing management team has assumed the trade of Centurian, with the business having been transferred to the existing management for nil overall consideration.

o  Cambridge Sleep Sciences ("CSS") - CSS is close to signing a non-exclusive global licensing deal with a multinational household consumer electronics brand. The Board believes that completion of these licensing opportunities will have a material impact on the potential valuation of the CSS business.

FINANCIAL HIGHLIGHTS

·      Results from continuing operations for the 26 weeks to 31 December 2022 was revenue of £3.4m (26 weeks to 30 December 2021: £3.3m), an EBITDA loss of £1.2m (2021: £1.0m profit) and a net loss of £2.0m (2021: £0.4m profit).

·      The loss for the period from discontinued operations, which includes Workshop Coffee, Cambridge Sleep Sciences and Centurian Automotive was £0.7m (2021: £1.1m).

·      Net cash available including undrawn facilities was £5.0m as at 31 March 2023.

OUTLOOK AND CURRENT TRADING

·      Focused on scaling our Roadside pipeline; we are in negotiations on a number of new Roadside developments and investments.

·      In the process of exploring potential financing solutions to deliver this pipeline.

·      Pub trade remains resilient as we focus on improving profitability.

·      Improved liquidity following the increase in the Tarncourt facility from £5m to £12m in December 2022.

- Ends -

Enquiries:

Notes to editors

Barkby Group PLC is focused on commercial property development and investment, alongside its pubs business. Barkby is in the process of disposing of its Investments (comprising of Workshop Coffee, Centurian Automotive and Cambridge Sleep Sciences).

CHAIRMAN'S STATEMENT

I am pleased to announce the interim results for Barkby Group PLC for the period ended 31 December 2022.

Over the last six months our primary focus has been to progress our property development pipeline and dispose of our non-core businesses.

Having weathered input cost inflation, we are now focused on returning our pub business to profitability.

Liquidity

As of 31 March 2023, the Group has net cash available of c.£5.0m including a working capital facility provided by Tarncourt, a related party vehicle controlled by the Dickson family.

Future strategy

In the July 2022 update, the Board announced it had determined to focus on roadside property development and investment and to dispose of Workshop Coffee, Cambridge Sleep Sciences and Centurian Automotive.

In recent months, we have met a number of prospective institutional investors and have received positive feedback around scaling our Roadside property investment and development business and continue to explore doing so.

The Group continues to look at several routes to maximise the opportunity this pureplay real estate strategy presents and is considering funding options, including both equity and debt to take advantage of the pipeline of opportunities highlighted above.

We are also reviewing the most tax efficient way of holding a high-quality, substantial portfolio of modern, ESG compliant Roadside real estate investments, including becoming a REIT and further strengthening the Board as implement our roadside strategy. 

Charles Dickson

Executive Chairman

31 March 2023

STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

26 weeks ended 31 December 2022

The above Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with the accompanying notes.

UNAUDITED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

As at 31 December 2022

UNAUDITED CONSOLIDATED CASH FLOW STATEMENT

26 weeks ended 31 December 2022

UNAUDITED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

26 weeks ended 31 December 2022

The above statement of changes in equity should be read in conjunction with the accompanying notes.

NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS

26 weeks ended 31 December 2022

These unaudited consolidated interim financial statements are for the 26 weeks ended 31 December 2022 (3 July 2022 to 31 December 2022). They do not include all the information required for full annual financial statements and should be read in conjunction with the consolidated financial statements for the year ended 2 July 2022 (2 July 2021 to 2 July 2022), which were prepared in accordance with International Accounting Standards in conformity with the requirements of the Companies Act 2006.

The statutory accounts for the year ended 2 July 2022 have been filed with the Registrar of Companies. Those accounts have received an unqualified audit report and did not contain statements or matters to which the auditors drew attention under the Act.

The principal accounting policies and methods of computation have remained unchanged from those used in the preparation of the financial statements for the year ended 2 July 2022 and are expected to be used for the financial statements for the year (52 week period) ending 1 July 2023.

Going Concern and Liquidity

Barkby is in the process of a strategic restructuring, which will result in its focus being solely on the opportunities that it believes are the most cash generative in the long term, Real Estate and Barkby Pubs. This significantly reduces the cash investment previously required by the early-stage growth business Cambridge Sleep Sciences, and the cash outflows of Centurian Automotive and Workshop Coffee. Accordingly, Cambridge Sleep Sciences, Centurian Automotive and Workshop Coffee have been presented as discontinued operations.

Cash headroom has been increased by refinancing the £5 million Tarncourt facility into a new £12 million facility with an extended expiry date of 30 June 2024. The Group currently has net cash available of c.£5 million, including the Tarncourt facility, as of 31 March 2023. In addition, the Board have taken the steps of consulting with their major shareholders regarding a potential equity raise and our major shareholders have confirmed their continued support should this become necessary.

Going forward, it is our intention to retain our property developments. This will strengthen the Group's balance sheet with high quality investment property assets and provide a reliable and recurring cash flow going forward. This also gives Barkby the opportunity to sell these assets to generate positive cash flow if required.

Despite significant progress being made, the disposal of the discontinued operations has not yet completed, therefore the board has prepared a profitability and cash flow forecast to 31 March 2023 that includes all Group companies and reflects a severe but plausible downturn scenario. We expect all discontinued operations to be fully disposed of by the end of the current financial year.

The Directors are satisfied that the Group has adequate resources to continue in operational existence for the foreseeable future. Accordingly, these interim financial statements have been prepared on a going concern basis as the Directors are of the opinion that the Group has sufficient funds to meet its ongoing working capital and committed capital expenditure requirements.  As stated, it is the group's intention to retain its commercial developments, but cash can be generated by selling its commercial developments if required. A detailed disclosure outlining going concern considerations was provided in the statutory accounts for the year ended 2 July 2022. The Directors performed a going concern review and have concluded that no matters have arisen since that date to change the conclusion of the review.

The interim financial information is unaudited, no dividend has been declared or paid in this interim period.

Discontinued operations

The Group classifies disposal group as held for sale if their carrying values will be recovered principally through a sale transaction rather than through their continuing use. Disposal groups classified as held for sale are measured at the lower of their carrying amount and fair value less costs to sell. Costs to sell are the incremental costs directly attributable to the disposal of a disposal group, excluding finance costs and income tax expense.

The criteria for classifying a disposal group as held for sale is regarded as having been met only when a sale is highly probable and the disposal group is available for immediate sale in its present condition. Actions required to complete the sale should indicate that it is unlikely that significant changes to the sale will be made or that the decision to sell will be reversed. Management must be committed to the plan to sell the asset and the sale is expected to be completed within one year from the date of classification.

A disposal group qualifies as discontinued operations of it is a component of an entity that either has been disposed of, or is classified as held for sale and:

·      Represents a separate major line of business

·      Is part of a single coordinated plan to dispose of a separate major line of business.

Discontinued operations are excluded from the results of continuing operations and are presented as a single amount as profit or loss after tax from discontinued operations in the statement of profit or loss and comprehensive income. All other notes to the financial statements include amounts for continuing operations unless otherwise stated.

Following decisions of the Board in June 2022, the Group issued a Trading and Strategy update announcing that the Board had resolved to sell the Workshop Coffee, Cambridge Sleep Sciences and Centurian Automotive businesses. The Group has therefore committed to a plan to sell these businesses, which are available for immediate sale and programs to locate buyers for each business have been initiated. The directors expect to sell the businesses within the current financial year ending 1 July 2023.

As a result of this announcement the financial results of the businesses being disposed of are presented as discontinued operations in the statement of profit or loss and total comprehensive income, with their assets and liabilities being presented as assets of disposal groups held for sale and liabilities of disposal groups held for sale in the consolidated statement of financial position.

The comparative information in the statement of profit or loss and total comprehensive income has been re-presented to show these businesses as discontinued for the period ended 30 December 2021.

Land and buildings includes £700,000 of freehold land. Freehold land is not depreciated.

In October 2022, the Group entered into a new 15 year lease for The Eliot Arms pub in South Cerney. The resultant right-of-use asset was recognised at £752,000, with a lease liability of £752,000 also being recognised.

As described in note 6. Right-of-use assets, the Group entered into a new lease for The Eliot Arms, South Cerney in October 2022. The lease liability recognised at commencement of the lease was £752,000.

Issued and fully paid:

Copies of the interim report are available to the public from the Company at 115B Innovation Drive, Milton Park, Abingdon, Oxfordshire, OX14 4RZ and are available on the website at www.barkbygroup.com.