Hakkasan Group president Nick McCabe has said the international restaurant operator is focusing on long term growth rather than short term financial performance as it reports a widening of pre-tax losses from £4m to £31.9m in the year to 31 May 2013.
The company, which opened six outlets globally in the period, said its profitability has been impacted by significant pre-opening and development costs as the Hakkasan brand is expanded, in addition to non-cash fixed asset impairments with respect to underperforming locations of £15m.
In a statement for M&C Report, Hakkasan Group president Nick McCabe said: “In line with our global business plan, we continue to invest in the future of our company, with long term growth being the focus over short term financial performance. Since May 2013, several new venues have opened, and our brands have continued to grow in stature and performance.”
Sales in the year grew 70% to £19.6m, driven by full year operations in New York and partial year sales for HKK in London and the group’s new US locations in Las Vegas and San Francisco.
The EBITDA loss before exceptionals was £2.6m, which was £2.5m below the same period a year earlier, with “improved performance at its UK restaurants and significant profitability from its Las Vegas nightclub offset by underperformance in the New York and San Francisco venues”.
Operating loss in the period was £31.9m (2012: £4m).
Hakkasan’s accounts state that the group had opened six sites since the period end and also entered into an agreement to acquire its restaurant in Dubai, which it previously operated under management, plus Pure nightclub located at Caesars Palace in Las Vegas and HKK Hospitality, a third party management company.
The company is due to open in Calcutta in mid-2014 under a franchise agreement. This month it also due to open in New York under the Beautique brand through a majority interest in a joint venture with a local partner.
Hakkasan now has 27 sites it either operates, manages or licenses to third parties. According to the accounts, trading at its Chrysan restaurant in London, which opened in September 2012 and closed in April 2013, fell “significantly below expectations” and the site has been placed on the market.
The accounts state that Hakkasan accumulated losses of £48.9m in the period, against £16.9m in the previous year, and has net current assets of £22m (2012: £32.8m). During the year the company received £95.1m (2012: £49.5m) from its shareholder to help finance help finance working capital and to fund the build cost of new Hakkasan operations in the US and China.
