Patisserie Holdings, the AIM-list operator of the Patisserie Valerie chain, has this morning reported a 27.2% increase in adjusted EBITDA to£15.3m for 12 months ended 30 September 2014, which it described as a “pivotal year” for the business.
Revenue increased 27.5% to £76.6m, while adjusted pre-tax profit was £11.3m, an increase of £3.1m or 37% (2013: £8.2m). Statutory pre-tax profit, after the costs of admission to AIM and the acquisition of the Philpotts business, was £10.4m which was £2.2m or 26.8% higher than the previous year (£2013: £8.2m).
The company said that with its balance sheet strength it was well positioned to take advantage of future acquisitions opportunistically provided they meet the group’s store payback period of 24 months
The group said that all of its brands performed well in the year, and that it was encouraged by the “excellent growth in online sales” which increased by 100% compared to the prior year.
Revenue from its main trading brand, Patisserie Valerie (98 sites), was £51.1m in 2014 compared to £42.4m in 2013, an increase of 20%.
Revenue from its two other trading brands which traded for the full 12 months, Druckers (22 sites) and Baker & Spice (4 sites) grew from £16.1m in 2013 to £16.5m in 2014.
It said that Flour Power City (1 site), its wholesale bakery acquired in May 2013 was now fully integrated into the group. Sales improved from £2.4m in 2013 to £2.6m in 2014.
The company acquired Philpotts (23 sites), a premium sandwich retailer, in February 2014 for a consideration of £6.3m (including £2.2m to settle debt obligations and fees of £0.3m).
It said: “With our expertise, as we modify the offering and incorporate the group’s purchasing power, we expect further synergies and gross profit efficiencies as the entity is fully integrated into the group.”
The company opened 19 new stores in the year, just short of its target of 20 openings per year.
Leases on two stores expired in the year and these sites were closed. One of these was the only loss making store within the entire estate, inherited as part of an earlier acquisition. This brings the number of stores in total to 148, all of which the company said are profitable.
The 19 new store openings are a mixture of traditional high-street shops and shopping centre outlets, including the group’s first store in Wales. It also opened its first motorway service station outlet in Beaconsfield. It said that all of its new stores are delivering a positive contribution.
Of the stores opened in FY13, the company said that all 19 stores are trading well and the majority have already paid back the capital outlay well ahead of the 24 month target that its set.
It said: “Encouragingly a number of stores opened in FY14 have also paid back their capital outlay already. We will continue our roll out strategy in 2015 and beyond and will look to open a further 20 stores in the year ending 30 September 2015. Since the year end we have already opened three new stores and are confident that we can achieve the planned number of stores for the year, all to be funded from operating cash flows.”
It also strengthened a number of key positions during the year including its Board, senior operations, finance and marketing. It said it was already seeing the benefits of this recruitment, with online revenues having increased from £1.3m in 2013 to £2.6m in 2014.
The company said that trading in the first six weeks of the year “has been good and the business continues to perform in line with management’s expectations”.
Since the year end, it has already opened three new stores and said that its strong pipeline of new sites “provides confidence that we can achieve the planned number of stores for the year, all funded from operating cash flows”.
Luke Johnson, executive chairman, said “I am pleased to report another excellent performance for Patisserie Holdings in what has been a pivotal year in the development of the group. The management team has delivered the eighth consecutive year of organic growth, acquired the Philpotts business and in May successfully listed the Company on AIM. Each of our five differentiated brands continues to grow and, with the group’s strong cash generation funding our future organic growth, we are looking forward to another exciting year in 2015.
“With five differentiated brands we are well placed across the fragmented UK coffee shop and casual dining markets, where we believe there is significant potential for growth. Our strategy to roll-out new stores is on track and delivering returns in line with our expectations. With each of our brands continuing to grow, profitable stores across the entire estate and encouraging current trading, we are looking forward to another exciting year in 2015.”
