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Morning Briefing for pub, restaurant and food wervice operators

Sun 10th Jan 2016 - Results: Grand Union, Anglian Country Inns, A to Z Restaurants et al
Grand Union reports turnover and operating profit rise: London bar operator Grand Union, led by Adam Marshall and backed by Luke Johnson, has reported a rise in turnover and operating profit in the year to 28 March 2015. Turnover rose 10.7% to £7,230,765, while operating profit rose to £344,486 compared to £341,717 the year before. Pre-tax profit was £312,370 compared to £319,838 the year before. Turnover figures included a year’s full trading at its Chancery Lane site but also saw a like-for-like sales rise of 8.3%. The company stated: “Ebitda growth has also been strong and we have continued to strengthen our balance sheet and accumulate cash reserves. We continued to invest in our estate in the year. We developed our Pleasure Garden concept in Grand Union Wandsworth. This was formally opened after the year-end and has performed above expectations. During the year we also invested in our outside spaces at Brixton and Kennington, which also showed a positive return on investment, Revenue in these sites were ahead of the previous year by 16% and 24% respectively, with site Ebitda improving by 23.3% for Brixton an 27.2% for Kennington. These investments have given us confidence regarding our current business model and our priorities for future investment. We have continued to improve our business model with the introduction of new drinks offerings and new food menu. In addition, we have further developed our internal training programme and improved pay rates for all levels of staff.” Gross margin on food and drink exceeded 68.5% and has ‘shown improvement in the latter part of the year’. Adam Marshall and Luke Johnson hold equal shareholdings in the company.

Anglian Country Inns reports increase in turnover and like-for-like site Ebitda: Anglian Country Inns, the award-winning operator of gastro-pubs and restaurants led by James Nye, has reported turnover rose 9.2% to £7,347,000 in the year to 31 March 2015. Like-for-like site Ebitda, exclusive of initial losses at new pub The Cricketers and central support teams, has grown strongly from £1,018,00 to £1,171,000, an increase of 153% (15%) and is 16.1% of sales (15.1% in 2014). Operating profit for the year was £141,109 compared to £276,475 in 2014. However, if the figures are adjusted to exclude the initial losses at The Cricketers and other operating losses, adjusted operating profit on a like-for-like basis is approximately £355,000 compared to £315,000 in 2014, an increase of £40,000. The company stated: “A small part of this (increase in turnover) was the addition of The Cricketers from December to March (£83,000). Removing this factor, underlying like-for-like growth was 8%. Gross profit margin improved from 69.5% to 70.1% in 2015 in part due to the additional focus on margin provided by our food costing and till management information systems. Once again The Cricketers impacted margins and like-for-like there is a further improvement to 70.2%. Labour costs in the year were £2,334,000, 31.8% of turnover, improved on 2014, where our costs were £2,196,000, 32.7% of turnover. Operating expenses have increased from £4,361,000 to £4,838,000, an increase of 11.1%. The Cricketers is responsible for £94,000 of this increase with like-for-like operating costs up 8.8%. The auto enrolment pension scheme introduced in May added £25,000 or 0.6% to our cost base which together with additional investment in central support staff, new systems and staff training programmes such as “Rising Stars”, is largely responsible for the growth. We expect to see return on these investments in future years.” The Cricketers was run as a turn-key operation since acquisition in December 2014 until February 2015 since when product and service have been transformed with the installation of a wood-fired pizza oven and the capacity more than doubled.

A to Z Restaurants reports return to profit: London-based A to Z Restaurants, which operates Zafferano and two other sites, has reported a return to profit in the year to 31 March 2015. Turnover rose to £6,910,980 compared to £6,816,189 the year before. Pre-tax profit rose to £285,739 compared to a loss of £39,031 the year before. The company stated: “The premises of Alloro Restaurants expired and the company ceased to trade in March 2015. The group is now in a position where it can trade profitably from its central London restaurants.”

Chameleon Bar and Dining reports small loss after poor trading at a tied lease: North east managed pub restaurant operator Chameleon Bar and Dining, led by Phil Strong, has reported turnover dipped by 8% to £4,050,395 in the year to 31 March 2015. A pre-tax profit of £115,411 in 2014 turned into a small loss of £3,751. The company had to repay a VAT receipt of £16,896 on gaming machine income after the HMRC successfully appealed an earlier ruling. In addition, loses of £22,603 were incurred on a tied leasehold at Sowerby Bridge which had traded successfully for many years. The company stated: “Competition increased substantially in the Sowerby Bridge area, including a large Wetherspoon opening nearby. The company did not renew the lease when it ended which resulted in a further exceptional loss at the point of exiting the lease of £38,649.”

Arkell’s Brewery reports rise in turnover and profit: Swindon-headquartered brewer and retailer Arkell’s Brewery has reported a rise in turnover and profit. Turnover for the year increased to £20.371m in 31 March 2015, a year-on-year rise of 2.6%. Profit before exceptional items and tax rose by £535,000, from £1.411m to £1.976m, a 37.1% increase over the same period. The company sold three pubs during the year and converted two into residential accommodation. The company also reduced its bank debt by £1.255m. Chairman James Arkell said: “Every department here at the brewery was a net contributor to a very successful trading profit. I am delighted to report a 35% increase before exceptional items and associated businesses. We invest heavily in our pubs through capital, refurbishment and repairs. This year’s expenditure has been no less. With managed (pubs), it is often difficult to get them all performing well in the same year, but this time we have achieved a good result. We are building our largest stand-alone bedrooms (24) at the White Hart, Stratton.” He added: “Still new regulations come in to make everyone’s life more challenging; from the FCA on loans, living wage, auto enrolment pensions, allergens, ESOS (Energy Savings Opportunity Scheme), Assets of Community Value! And on it goes!”

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