Scottish hospitality operator G1 Group has announced that it has bought five new restaurants - and said acquisition activity is ‘picking up’ - as it reported a 5.5% rise in EBITDA to £17.2m in the year to 31 March 2014.
Pre-tax profits increased 4.1% to £8.5m on turnover up 1.5% to £67.4m in the year, in which it invested £4.3m acquiring new properties and £6.6m in the existing estate. G1’s gross profit percentage increased from 74.1% to 77.1% and operating profits rose from £10.4m to £10.8m.
Chairman Brian McGhee said in the results, dated 8 September 2014: “Acquisition activity looks to be picking up, with a number of transactions in the pipeline. Only yesterday, the group completed a transaction whereby it acquired four restaurants in St Andrews - to add to its existing outlets there - Mitchell’s, Forgan’s and the Vic - together with a restaurant in Stirling. The group is looking to steady though cautious expansion with continuing spread of asset risk.”
McGhee said the period from late 2013 and into 2014 has seen “a level of buoyancy in the leisure market in the south east of England, especially London, but this resurgence has not been reflected to anything like the same extent elsewhere in England and in Scotland”.
“That accords with the normal pattern for Scotland to lag downturns and likewise upturns, but almost certainly re: the possible impact of the forthcoming referendum has been a factor in tempering customer spending and trade investments in Scotland.
“G1 has continued to show growth in turnover and profitability, through the impact of the market caution and of a series of refurbishment (and hence periods of closure) have been a restraining influence in 2013.2014 growth, with the benefits expected to show through in 2014/2015.”
There were no major acquisitions for G1, which is led by Stefan King, in the past 18 months as it focused on refurbishments.
“The incidence of new development projects has increased in the current financial year,” said McGhee. “These have included the installation of the UK’s first regional IMAX screen at the Playhouse in Perth. Perth has also seen the launch of City Cafe at the Playhouse together with Harry’s nearby, a quirky family orientated restaurant with a superb children’s soft play area appropriately named the Little Playhouse.
“Glasgow’s West End has also seen the launch of Hyndland Fox, which has traded well since it opened in May 2014.
He said G1 is “engaged in two retail developments for which Sainsbury and Tesco will be the key tenants”. That move is “consistent with its approach to achieving a balanced spread of risk”. Tesco is already a tenant in an earlier development.
The company is also “heavily involved” in the development of the restaurant and bar facilities to complement the craft brewery at the Drygate Brewery in Glasgow’s East End.
Meanwhile, McGhee said the Commonwealth Games had brought strong trading for operations in central Glasgow, as both England and South Africa using G1 venues as headquarters. “Many medal-winning athletes chose to celebrate at G1 outlets, and Corinthian in particular played host to many celebrities, including Sir Steve Redgrave, Dame Kelly Holmes and Prince Albert of Monaco.”
Group net assets grew by £5.9m to £45.7m at 31 March and net debt increased slightly from £78m to £78.1m.
