Essenden, the Nick Basing-led operator of the Tenpin brand, has reported a 13.5% rise in like-for-like sales for the 11 weeks to 16 March 2014 on the back of a second consecutive year of growth, and reiterated that one of its key focuses was to create the conditions to “deliver a transformational and successful acquisition”.
The 29-strong company saw like-for-like sales rise 0.6% in the year to 29 December, with sales up 8.3% in the final quarter. EBITDA grew 8.4% to £4.1m during the year, while sales reduced from £47.1m to £45.6m due to a reduction in the number of sites. Pre-tax profit stood at £3.6m against a loss of £100k in 2012.
The company said that its focus is twofold: continuing to improve its existing business, whilst creating the conditions to deliver a transformational and successful acquisition.
Basing said: “If we deliver both we believe we will create further value for our shareholders and the good start to the current year augurs well for continued progress.”
The streamlining of the estate to a stronger more profitable group of sites continued in the past year with planned exits from sites at Liverpool, Chester and Milton Keynes. Average site EBITDA increased to £308k (2012; £301k). After the year end the company agreed a deal to sell its smallest site at Grantham to its sub-tenant.
It said that other discussions continue to regear leases, or to release space to reduce the overall size. A strategic goal is to operate a national chain that has appropriate property costs and therefore enhanced profitability. The company said it had made excellent progress working with landlords and advisors in the year.
Chairman Rory McNamara said: “As economic growth begins to assist increases in customer spending, the business has responded with a significant uptick in growth in the final quarter of the year. The changes implemented by our very capable management team have created a stronger, fitter business. It is now well positioned for future growth. With a stronger cash position, site performance will in the future be further enhanced by targeted capital spend. The board consider that Essenden has created an excellent platform from which to grow by acquisition. Our recent announcement of proposals to convert the zero coupon perpetual Loan Notes into ordinary shares will simplify the capital structure making it easier for the group to access the capital markets in order to fulfil its ambitions. “
Basing, chief executive, said: “The company is fitter and stronger than ever and has delivered a second year of profitable progress; all measures have improved. I am pleased trading since the year end has again strengthened considerably with a run rate of 13.5%. At the margin a 1% change in like for like sales converts to EBITDA of around £300k. We have also been working to deliver a “transformational step” for the group, and remain positive that 2014 will be a defining moment in the company’s future.”