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Sun 29th Sep 2013 - Itsu reports 22% turnover growth but reduced margins
Itsu reports 22% turnover growth but reduced margins: Itsu, the healthy eating chain set up by Pret A Manger founder Julian Metcalfe and led by Gavin Loughran, has today filed accounts at Companies House showing turnover rose 22% to £45,246,271 in the year to 3 January 2013. The turnover growth was underpinned by “impressive like-for-like maturing store sales growth of 8.3%”. An additional eight sites were opened in the year to bring estate size to 40 units. The company stated: “Itsu’s margins were impacted by a decision to invest in menu improvements and by the costs of a number of new openings in the final quarter of the year." Ebitda fell slightly in the period to £3,256,382. (2012: £3,600,987). The company has net debt of £7,366,576 (2012: £4,656,382). Itsu said it planned to open eight new sites this year and to “develop the brand through food development, distinctive communication and staff training”. It added: “While the overall market is not forecast to grow significantly in 2013, the company is well-placed to continue increasing its revenues by virtue of its growing brand strength and consumer appetite for fast healthy food.” Pre-tax profit was £95,719 compared to £959,822 the year before. Last Friday, Itsu opened its first site outside London, a £1m investment in Oxford. Last week, founder Julian Metcalfe told The Sunday Telegraph: “For our shop in Oxford we have paid £400,000 in rent. Can you imagine how much food at £3.79 we have got to sell? That’s where the challenge lies. If you can do that, you have the whole world at your fingertips. You can open an unlimited amount. I think it is fascinating that a UK company has possibly cracked this affordable fast food.” The accounts show Gavin Loughran was paid £448,385 in consultancy fees through his company Carebrook. Julian Metcalfe was paid cash payments of £120,000, consultancy fees of £144,000 and expenses of £53,491.  The company made cash payments of £240,000 to director Clive Schlee and owes him £802,378. After the year-end, in February this year, Itsu entered into a new loan agreement for a total of £13.4m with HSBC to repay existing loan facilities, towards future capital expenditure and general working capital purposes – the loan is repayable in 2018. Last Sunday, Julian Metcalfe has claimed that Itsu could grow to be a bigger business than Pret A Manger. Metcalfe told The Sunday Telegraph: “We are now nearly at a wonderful point where some of our shops last week did nearly 40% hot food. That has taken nearly five years of relentless work every day. There is no point trying to build a fast food business on sushi; it’s lovely but it’s not everybody’s cup of tea.” Itsu was developed to challenge the fast food dominance of McDonald’s, Burger King and KFC. Metcalfe said the company had enough cash for 30 more openings and then would look for an investor. Any investor “would make a huge amount of money”, Metcalfe added. 
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