Eclectic Clubs & Bars, the Avanti Capital-backed late night operator, has reported a 6% growth in revenue for the second half of 2010 despite a fall in earnings and profits due to site closures for refurbishments.
Like-for-like sales for the period were up from £6.8m to £7.2m. But like-for-like site ebitda was slightly down, from £1.9m to £1.8m, and company editda also reduced from £1.1m to £1m.
Avanti, which has a 60% stake in Eclectic, said: “Sales together with ebitda have seen some reductions over the prior period as a result of the ongoing programme of site closures during the period for refits. Profit before tax for the six month period ended 31 December 2010 was £0.2m (2009: £0.3m).
“Trading over the last six months and over New Year was once again strong and management are optimistic about the outcome for the second six months continuing the trend seen in the first half.
“The strong performance of the new opening and refit programmes demonstrates the management team’s ability to continue to develop and grow the Eclectic group.”
Avanti said it “continues to search for suitable sites to further roll out the Sakura and Lola Lo brands” for Eclectic. The company is set to open its latest site as a LoLa Lo in Cambridge this summer; Eclectic bought the site as Soul Tree in December.
During the period there have been the following refits and one new opening:
1) Brighton reopened in July 2010 as a Polynesian bar called LoLa Lo. This new format has helped to significantly increase sales up 101% for the six months against the prior year.
2) Norwich was closed in September and reopened towards the end November as the second Lola Lo. Sales for the first two full months of trading have seen revenues up 62% against the same period last year.
3) Oxford was closed in September to resolve flooding in the basement bar and is expected to reopen in March as the third LoLa Lo.
4) In November, a third Sakura was opened on Deansgate Locks in Manchester. Trading has been in line with expectations.
Avanti Capital’s investment in Eclectic, which is predominantly in the form of a secured loan, has a book value of £7.5m, slightly down on the £7.6m in 2009. The only other debt outstanding in Eclectic is a senior debt facility from Barclays Bank - debt (net of cash) stood at £1.3 million as at the end of December 2010, compared to £0.8m at the end of 2009.
“Barclays Bank has continued to support our refit and acquisition programme with new lending,” Avanti said.
At 31 December 2010, the carrying value of the Group’s investment in Eclectic was £7.5m, equating to 93p per share.
