Savor announces annual results

Savor Limited (NZX: SVR) ("Savor" or "the Group"), is pleased to announce its results for the financial year ended 31 March 2021. All figures presented are from the continuing operations of the Group unless otherwise stated. Highlights: o Savor reported operating earnings from continuing operations of $1.8m compared to $1.5m in the prior year. o Group revenue decreased to $16m from $24m in the prior year, as a result of the significant business interruption and temporary venue closures due to COVID-19 lockdowns. o Group operating cash flows for the year were $1.6m. (when adjusted for the delayed settlement of payables from the prior year, reported operating cash flows were $1.0m). o Including significant non-cash items such as depreciation of $2.2m, impairment charges of $2m, and interest costs of $0.8m, the Group reported a net loss after tax of $3.1m. o As a result of divesting Moa Brewing Company Limited, the Group reported a net loss after tax from discontinued operations of $3.5m. o The cash position of $7m on hand allows the Group flexibility to extend existing brands and acquire additional assets. Core Business The Group continued the momentum achieved in the first half of the year, with sustained growth in operating earnings through the summer period. The addition of Azabu at Mission Bay has been a great success. Earnings from the Core Business were $3.6m up from $2.9m in the prior year, all the while with revenue down by over 30%. This positions the Group for a strong financial performance in FY22. The Group settled the acquisition of Amano, Ortolana, and The Store from Hipgroup Limited in early April 2021, with the first six weeks of trading completed. Trading results have exceeded initial expectations, and purchasing power synergies are already making a positive impact on input costs across the Group. Work has begun on integrating the new additions into the wider Group, with benefits from overhead efficiencies realized in April and May trading. The year culminated with strong trading in March 2021 with an increase in patronage driven by the America's Cup. Management is pleased with the results and sustained efforts of our staff in what has been a difficult period. Divestment of Moa Brewing Company The Group realised a net loss after tax of $3.5m from Discontinued Operations, reinforcing the decision to divest Moa Brewing Company during the year. While trading was impacted by a number of one-off events during the year, most significantly the withdrawal of product in July 2020, the business continued to experience negative returns. The divestment has allowed the Group to free up $1.5m of working capital on a normalised basis, a significant reduction in overhead costs (in excess of $1m), and the cash proceeds from the sale were applied to the Hipgroup acquisition in April 2021. There are two current outstanding claims related to Moa Brewing Company Limited. The first relates to the product quality issues experienced during the year through its contract brewing partner, and the second relates to the outstanding payment of the completion adjustment resulting from the sale of Moa Brewing Company. The Group continues to pursue all avenues to reach resolution on both claims. The Board has acted conservatively to ensure any ongoing liabilities associated with Moa Brewing Company that can be attributed to the Group have been provided for in the financial statements. Appointment of Board Chair The Board have elected Paul Robinson to assume the role as Executive Chairman following the retirement of Geoff Ross at the end of May 2021. New Business With cash on hand of $7m and strong support from our cornerstone investors and banking partners, the Group is both looking to extend its existing brands and opportunistically acquire quality assets. The Group is in discussions with several parties regarding the addition of further profitable assets. The Group expects to be able to provide more detail in the coming months as these discussions materialize. Savor Chairman Geoff Ross said: "2021 was a period of significant change for the Group, with the divestment of Moa Brewing Company and managing the business through the significant events related to COVID-19. The continued strength and resilience of our team has been remarkable and the Board are incredibly pleased to have achieved these milestones. The sector has come through COVID-19 stronger and our venues are performing well." CEO Lucien Law said: "It was pleasing to finish the financial year by announcing the acquisition of the new venues from Hipgroup. While the financial results were impacted by COVID-19, we have a solid foundation for future growth with a refocused business, which has been demonstrated by trading results early in the new financial year. The divestment of Moa Brewing significantly lowers the Group's risk profile and removes the ongoing financial losses. The Group management team is firmly focused on driving the Group's growth, moving into sustained profitability and delivering strong returns for shareholders." ENDS - Investor Enquiries Lucien Law CEO, Savor Mobile: 021 436 329 End CA:00373054 For:SVR Type:FLLYR Time:2021-05-28 11:38:23