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Mon 8th Oct 2018 - Burger & Lobster returns to profit
Burger & Lobster returns to profit a year after losses hit almost £11m, using London as ‘test kitchen’ for concepts it can roll out internationally: Burger & Lobster has reported a return to profit a year after pre-tax losses hit almost £11m as the company closed four UK restaurants to focus on London and international expansion. The company said it is now using London as a “test kitchen” for concepts it can roll out internationally. It plans to have two more sites in the US by 2020 as well as expanding further in Singapore, Hong Kong, Canada and China. Burger & Lobster saw pre-tax profit jump to £3,114,008 for the year ending 31 December 2017, compared with a loss of £10,814,415 the year before. Turnover fell 4% to £42,205,452, compared with £44,075,916 the previous year. Ebitda rose to £6,170,919, compared with £2,705,033 the year before. Burger & Lobster reduced costs through closures and disposals as well as changing supplier relationships to reduce wastage. Exceptional items were in surplus by £52,157, mainly due to £865,000 gained on the disposal of leaseholds. This was against a loss of £9,179,634 the previous year. In their report accompanying the accounts, the directors stated: “Group turnover decreased by 4% in comparison to the previous year. The decrease was attributable to the closure of sites – underlying sales saw an increase of 0.3%. During the year the group closed three sites, which had historically been underperforming, and was also able to sell the leases to two sites. No new sites were opened during the period. Gross profit margin increased to 61.4% from 55.7%. The increase was due to improved menu engineering, updated pricing, continuing currency hedges, tight stock controls and favourable changes in lobster meat pricing. Administrative expenses decreased 9.6% in comparison to 2016, mainly through decreases in the number of sites and additional head office savings. Some exceptional costs have been incurred this year and are attributed to the provision for onerous leases for four restaurant locations closed or sold. The group envisages being released from the obligations relating to the leases of all closed properties by the end of 2018. During 2017, the management fulfilled the obligations of the bank loan facility that was agreed in April 2017. Due to successful management of cash flows, cash flow forecasts to the end of 2018 and beyond show a positive position. At the time of this report, management accounts in 2018 show a positive Ebitda and trading is strong, which will allow the group to meet all the terms required to repay the loan facility. We can now look forward positively, continually evolve what we have in London and begin to grow the business in some of the most exciting places in the world, including China, the US and Hong Kong, in a format we know works well for us and, more importantly, our customers.”

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