The Casual Dining Group (CDG) has reported that its run-rate EBITDA is projected to reach £50m, with sales well in excess of £300m in the 12 months to the 31 May 2016 – after a year that it has described as “transformational”.
The Steve Richards-led group, which will operates 302 sites in the UK by its year end, generated sales of £215m and EBITDA of £24.4m from continuing operations for its financial year from 2 June 2014 to 31 May 2015 – a period prior to its acquisitions of Las Iguanas and La Tasca for a combined £108m; its expansion of Bella Italia and the start of its transformation programme for Café Rouge.
Richards, who was named Retailers’ Retailer of the Year on Wednesday night, said: “While these numbers are firmly historic and do not reflect the company’s current size, profitability or growth trajectory, they nevertheless reflect a period when the foundations of CDG were laid. It was a period of transformation, which saw the creation of a new restaurant group, with a new identity, and dramatically altered balance sheet, structure and prospects.
During the year to 31 May 2015 the company restructured with debt lowered to £91m; completed the sale of Strada and divestment from other non-core assets, whilst investing £21m in existing and new restaurant locations.
On top of the sale of Strada and a Company Voluntary Arrangements (CVAs) for the Bella Italia and Café Rouge operations, the group comprised 197 restaurants at year end, of which 192 were considered core to the business, compared to 293 sites on the 1 June 2014 – a reduction in core restaurants of 101.
As a result of the restructure, net assets increased by £117m and third party borrowings were reduced to £91m, “transforming the group’s balance sheet”.
The group is on track to complete the refurbishment programme of the entire Bella Italia and Café Rouge restaurant portfolio by the end of the current financial year – to 31 May 2016. As of 1 March 2016, the group operated 97 Bella Italia restaurants and 90 Café Rouge café-bistros.
In contrast, during the period to 31 May 2015, turnover from continuing operations was £215.7m and EBITDA generated was £24.3m – a number impacted the company said by temporary closures associated with its refurbishment programme. Figures for continuing operations also included a number of restaurants deemed non-core and identified for disposal (some of which were lossmaking) but that were nevertheless part of the group at the start of the financial period commencing 2 June 2014. Some of these sites were sold individually but many were exited by the group via the CVA process.
At a pre-tax level, after £35m of predominately non-cash adjustments and exceptional items – as a result of the restructuring – the group made a loss of £16.5m for the period.
Richards said: “Since the yearend we have continued to invest in opening new restaurants. In the current financial year to 31 May 2016 we will open approximately 30 restaurants and we expect to open a similar number in the following financial year. By end of the current period (to May 2016), CDG will operate 302 restaurants. We will continue to build on the strategy set in place in the financial period described above by investing in our people, in our brands and in our restaurant properties.”
