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Morning Briefing for pub, restaurant and food wervice operators

Wed 23rd Mar 2016 - Luke Johnson – we’re making positive progress at Eclectic
Luke Johnson – we’re making positive progress at Eclectic: Eclectic Bar Group has reported a return to profit in the half year to 27 December 2015, with executive chairman Luke Johnson reporting ‘positive progress’ in a number of key areas. Sales were £10.72m (2014: £12.12m) and head office expenses reduced to £0.89m (2014: £1.2m). Company Ebitda before highlighted items was £0.96m (2014: £1.10m) and £0.94m after highlighted items: £0.94m (2014: £0.57m). Profit before tax and highlighted items was £0.30m (2014: £0.01m). Net debt at the end of the year of £0.2m (2014: £2.8m). Johnson said: “Eclectic has some of the best locations and premium brands in the UK. Positive progress is being made across all areas of the business and I am particularly pleased to see the group returning to profit for the half year. Broadening the business into more activity-based leisure concepts such as we are trialling in Reading will continue to build value for our shareholders over the medium to long term. Our team have continued to work hard in a difficult trading environment and I’d like to take the opportunity to thank them for their continued effort and dedication. The campaign for returning students in September has been a notable success, halting the slow-down seen last year. The introduction of the ‘Loyal’ card, the installation of free public Wi-Fi, improved offers and better communication have all contributed towards new student nights, increased overall student numbers and increased mid-week sales for the group. The significant savings that have been made on head office costs, as well as the rebasing of costs across the estate, were, in my view, essential to the future profitability of the business; the company’s focus on these areas will therefore continue for the rest of the financial year. A significant reduction in net debt, which currently stands at £0.2 million as at the end of December versus £2.8 million for the same period last year, gives the group capacity to make investments in its existing estate and allows headroom for acquisitions, should opportunities arise. Derby Lola Lo’s return to profitability is very encouraging and, whilst more work is needed to complete the turnaround of Dirty Blonde, its Christmas trading result shows that the venue has potential to deliver a positive contribution. The 2.25% margin improvement arising from the re-negotiation of the group’s principal supply contracts at the end of February 2015 has brought welcome additional profit, together with a logistics benefit through having a single drinks supplier. Progress is being made on the disposal of Sheffield and of the remaining space at Liverpool, with positive interest shown in these locations from various parties. Most importantly in this half year, the group returned to profitability with earnings before tax and after highlighted items at £0.28 million versus a loss of £0.53 million for the same period last year. This is a key milestone for the business and demonstrates what can be achieved through applied focus and determination. The company owns some of the best locations in the UK, with premium brands run by excellent people on a daily basis. The management team at Eclectic has achieved tangible progress over the last six months and I am confident that together we have the skills and potential to build on this and grow the business further.”


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