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Sat 7th Oct 2017 - Burger & Lobster reports future no longer ‘in significant doubt’
Burger & Lobster reports future no longer ‘in significant doubt’ following major restructure of company and finances: Burger & Lobster has reported it has turned its fortunes around following a major restructure of the company and its finances having previously admitted its future was in “significant doubt”. The company revealed at the start of the year it had previously failed to meet its debt covenants and was in the process of renegotiating its loan facilities as a new management team began restructuring operations. The situation meant there was “material uncertainty that may cast significant doubt on the group’s ability to continue as a going concern”. However, in its latest accounts filed at Companies House, Burger & Lobster’s directors reported cash flow forecasts in 2017 and beyond “show a positive position and compliance with bank loan covenants”. The company also reported it renegotiated its banking facilities with NatWest in April and had met all its debt covenants since. The company stated: “The company obtained additional financing from the bank in February 2016 to be used for the restaurant sites development and working capital purposes. In June 2016 the company notified the bank of the breach of its covenants on its loan agreement. Around the same time the newly appointed management team started the process of restructuring of the company's operations and renegotiating the new loan facility with the bank. This agreement was successfully completed in April 2017. The company has since met all covenants relating to the bank loan. Due to successful management of cash flows, cash flow forecasts to the end of 2017 and beyond show a positive position and compliance with bank loan covenants. At the time of this report, management accounts in 2017 show a positive Ebitda and trading is now returning to a budget performing level in order to meet all the terms required to repay the loan facility.” Burger & Lobster reported turnover for the year to 1 January 2017 increased 24% to £44,075,916 compared with £35,534,379 the previous year. Ebitda jumped to £2,438,041 compared with minus £1,576,985 the year before. Pre-tax losses increased to £10,814,415 compared with £7,056,014 the previous year. It had cash at bank and in hand of £3,215,830 compared with £599,672 the year before. The company stated: “Gross profit margin increased to 55.6% from 53.3%. Administrative expenses decreased by 8% as a proportion of revenue in comparison with 2015. During the year the group undertook many changes in structure and procedure that included completed restructuring of the head office staff, reduced costs, increased sales prices, changed menus and renegotiated supplier agreements. Plans were actioned to close loss-making sites. Increase in exceptional expense is attributed to the prudently accelerated depreciation for the fixed assets related to five restaurant locations planned to be closed or sold. In addition, since the end of 2016 further measures have been put into place to ensure that risks are significantly reduced in order to maximise profits. Currency hedges have been put in place in order to reduce exchange risk, weekly cash flows ensure liquidity is not a risk, weekly analysis of trends in sales and costs ensure fluctuating prices in lobster do not have significant impact on trading.” Burger & Lobster currently operates ten sites in the UK and eight overseas as well as a Smack takeaway site in Soho, London. 

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