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Sat 29th Mar 2014 - Breaking News - Novus reports l-f-ls down 3.1% in year after sale
Novus reports l-f-ls down 3.1% in year after sale: The London bar and nightclub operator Novus Leisure has reported like-for-like sales down 3.1% at sites that did not receive investment in the 48 weeks to 30 June 2013. The 47-strong company, acquired by the private equity firms Hutton Collins and LGV Capital in July 2012, reported sales of £116.05m and ebitda of £8.4m. It made a loss of £40.08m because of exceptional costs of £30.58m and finance costs of £10.29m. Companies House documents say the performance of Novus was impacted by the 2012 London Olympics, which were expected to provide a "significant sales and profit opportunity for the business, with the group’s advance sales and corporate expertise to the fore". The company said: “Whilst the Olympics did provide some very significant sales gains, with a number of West End venues recording weekly sales numbers normally seen only at Christmas, these sales gains were insufficient to offset the sales shortages recorded in quieter City venues and the significant incremental costs incurred to ensure quality service during the Olympics period." The group invested in 11 venues during the period, with a total investment (including closure and launch costs) of £6.1m. The level of investment and the accompanying disruption, negatively impacted profitability in the third quarter of the financial year, Novus said. There was also increasing competition, which had impacted on the company’s walk-in business. Novus said its directors have introduced a number of initiatives to restore the core business to sustainable ebitda growth. It said: “These initiatives include: an increase in operator autonomy and accountability and an associated reduction in head office headcount to ensure that group resources are appropriately focused on ensuring the delivery of customer experience. The full impact of these cost savings, which were delivered in the first quarter of the current year, is £1.7m; a strengthening of the operational management within the business to ensure that the focus on building venue teams committed to the delivery of an excellent customer experience is maintained for both our significant pre-booked and our walk-in business; a programme of targeted capital investment which addresses both the opportunity to reposition and reform at venues and the requirement to maintain amenity levels in all our venues; the completion of the roll-out of a new customer relationship management (CRM) system and continued investment in the roll-out of new websites for all venues and the LateNightLondon booking portal. Phase one of the CRM roll-out was completed in August 2013, with new Tiger Tiger and LateNightLondon websites going live in the second quarter of the current financial year.” Gross margin was 76.4%, down slightly from 76.8% in the previous year, a fall which reflected the impact of reduced walk-in late night sales, Novus said. The company said it has negotiated a number of new supply contracts and in the first quarter of the current year gross margins improved 0.3% year-on-year. Venue-level ebitda for the estate was £19.6m. The company sold three venues and closed a fourth as the lease was not renewed, generating gross disposal proceeds of £5m, against a venue-level loss of £90,000 delivered by the three venues in the 12 months prior to their disposal. The proceeds have been used to pre-pay £3m of bank debt. The company has £33.7m of net third party debt, which is 4x group adjusted ebitda. The first quarter of the  current year has seen year-on-year ebitda growth, Novus said. The company had 1,982 staff at the year-end. Two directors received £525,000 for loss of office during the financial year.


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