Restaurant operator Tasty has exchanged contracts for the sale of one of its London sites for double its book value.
The More London dim t site will raise £2m gross or £1.95m after costs. The net book value was £878,000 at the end of June 2019. The cash will help to pay off debt and provide cash for refurbishment. No openings are planned.
There was £1.85m of debt and cash of £2.36m at the end of June 2019, following a £3.2m placing and open offer at 4p a share. There are also lease provisions of £3.35m.
Tasty says that fourth quarter sales were in line with expectations. Management emphasises the continued assistance of landlords. A 2019 loss of £1.2m is forecast (the first half loss was £861,000) and a lower loss is expected in 2020.
The share price rose 41% to 3.85p. That values Tasty at £5.4m. Net tangible assets were £12.3m at the end of June 2019. There will be a reduction due to the second half loss, but that should be more than offset by the disposal gain, although it will be completed after the year end.
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