Arc Inspirations has delivered annual sales growth of 7.5% for the year to 26 March 2023, with sales of £40.8m and adjusted EBITDA at £3.84m.
The BGF-backed premium bar operator also revealed plans to open four new bars in 2024 and is targeting a debut London site.
The results were elevated by the performance of two sites that opened in the previous financial year – Manahatta on Birmingham’s Temple Street and Box in Deansgate Manchester.
Manhatta Temple grew sales on New Year’s Eve by 68% versus the previous year. Box Deansgate posted a company record gross sales week in late 2022, turning over £200,000, attributed to two England games in the men’s football World Cup and Tyson Fury’s boxing bout.
Company EBITDA for the year was lower than the previous period, reflecting a challenging cost environment, investment in the team, and the absence of several one-off post-Covid benefits – including VAT rate reductions, business rates relief, and government grants – totalling approximately £2m in FY22.
In the current financial year (FY24), Arc continues to outperform the bar market outside the M25, according to CGA by NIQ data. Total sales outstrip the sector by an average of 8%, or 4.6% on a like-for-like basis, according to the trading update.
The business opened Manahatta Sheffield earlier this year, which has become its second most profitable site, and opened its biggest ever Box at Brindleyplace in Birmingham in June 2023.
Two sites – Box Nottingham and Manahatta Newcastle – are set to open in November 2023.
Amid plans to reach 50 sites by 2030, Arc Inspirations plans to expand into four new cities in 2024, eyeing launches in London, Edinburgh, Liverpool, and Cardiff.
During the year, managing director Anni Opong won the Rising Star Award at MCA’s Retailers’ Retailer Awards.
The business welcomes new CFO Ciara Allan this month, soon after promoting former head of marketing Laura Lewis who joins the board as marketing director.
Commenting on FY23 performance, Arc Inspirations co-founder and CEO Martin Wolstencroft said: “The 12-month period to 26th March 2023 was a relentlessly challenging one for the hospitality and leisure industry. In this context, our performance reflects that of a well-managed, well-controlled, robust and resilient business. Our premium brands proposition appeals strongly to customers and our three distinct brands are differentiated and can exist close to each other in major cities, without suffering brand or trading dilution.
“There were a number of highlights in the financial year including a strong Easter, good volumes during the FIFA men’s football World Cup and excellent performances from our new sites, while our investment in outside areas has increased site capacities and made venues more attractive to consumers.
“Despite the significant challenges to our financial performance in the year, the business is confident that it has outperformed many of its competitors in what has clearly been a very difficult year for the sector.”
Commenting on more recent performance, he added: “The business continues to track ahead of the market as we move into the new financial year, which is extremely encouraging for future performance. The economic climate remains tough, exacerbated by the poor weather and rail strikes, but we remain focussed on delivering fantastic service quality through recruiting, training and retaining the best team. We have rolled out our Nobody Does It Better training, where our objective is for our teams to deliver a fantastic customer experience by exceeding customers’ expectations, and initial results have been outstanding – our total team turnover figures have reduced by 15% and our NPS scores have improved by 8 points.
“The management team are strongly focussed on increasing site sales and margins, with particular focus being placed on supplier partnerships. We anticipate better terms from energy suppliers when our largely fixed-rate deals come to an end.
“Backed by our investor, BGF, we will continue our site expansion strategy by seeking out excellent locations in key cities across the UK including geographies in which we do not currently trade, such as Cardiff, Edinburgh, Liverpool and London.”
