2020 Annual Report

Cooks Global Foods (NZX.CGF) attaches a copy of its Annual Report for the year ending 31 March 2020. Highlights o Operating loss from continuing operations before depreciation, amortisation & finance charges improved to $35k compared to prior year loss of $2.4 million. o Cash flow from continuing operations was $193k positive after deducting interest of $1,414k compared to prior year loss of ($2,404k) after deducting interest of $289k as restructuring initiatives are implemented and the results are being realised. o Group revenue from continuing activities increased 4.3% to $4.2 million. o The Covid-19 impact in all markets applied from mid-March with the revenue declines supported by various levels of government support packages that mitigated the full impact. o All operating markets are now recovering as the various government lockdown measures are relaxed. Average sales for July and the first two weeks of August across our major markets of UK and Ireland are 100% and 82% respectively for open stores compared to the same weeks for last year. o Performance for the above 6-week period has been 148% of the revised internal budgets for UK & 121% for Ireland showing a stronger recovery than was projected. Central city stores however have been the most affected negatively as workers continue to work from home and tourism into the major cities is severely reduced. Neighbourhood outlets have experienced strong recoveries. o There was a slowing of new store growth as openings were deferred due to the Covid close downs, but this program is now being revived as the various economies reopen. o There were no store closures attributable to Covid-19 within the reporting period. Revenue from continuing operations was $4.2 million which was 4.3% ahead of last year's comparatives, with revenue from discontinued operations being $2.9 million which was 53.4% ahead of last year's comparatives. Overall revenue for the 12 months thereby rose 20.1% to $7.1 million as we saw the full year impact of the short term holding of 4 stores in the UK contribute to the sales value growth. These stores along with the New Zealand FMCG operations have been determined to be non-core and have been closed or sold as part of the drive to improve cash profitability. The group is focused on profitably growing core business and divesting non-core activities, and this has resulted in benefits during FY20 which will be further evidenced in FY21 and beyond as the company comes out of the Covid period. The UK business was re-organised in FY19 with a focus on developing regional master franchisees and the strengthening of operational management. This change is working positively and to date three regions have been sold and the results of this are being shown with faster growth as local developers ramped up activity. This has slowed in the Covid period but is regaining momentum as government controls are relaxed. As discussed above 4 stores were held and operated by the company for various periods as part of a plan to sell the businesses to new franchisees. This process is well advanced, and the stores are classified as discontinued business. One store was closed in March and the others are in the process of being sold to new franchisees. The company has restructured the Middle East operations and are now working with key supply partners to provide local servicing to our franchisees rather than having our own operations and staff in the region. This has resulted in cost reduction whilst aligning supply sources with our UK and Irish businesses and providing in-market services through third parties who represent international business partners. The Scarborough Fair tea and Grounded coffee brands were determined to be non-core and were sold with a sale agreement concluded in July 2020. The major focus of the business is cafes in UK, Ireland and Europe plus providing support to our master franchise partners in the Middle East, Pakistan, Canada and Indonesia. Contact: Keith Jackson Executive Chairman Email: keith.jackson@cooksglobalfoods.com Tel: +64 9 304 0567 About Cooks Global Foods CGF operates in world markets and is listed on the NZX market operated by NZX Limited in New Zealand under the code CGF. It owns the intellectual property and master franchising rights to Esquires Coffee Houses worldwide (excluding New Zealand and Australia). CGF currently operates or franchises Esquires Coffee outlets in the United Kingdom, Ireland, Portugal, Bahrain, Kuwait, Syria, Saudi Arabia, Jordan, Pakistan, Indonesia, Canada and China. For more information visit: https://www.cooksglobalfoods.com. End CA:00358993 For:CGF Type:ANNREP Time:2020-08-31 16:10:03