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Fri 20th Sep 2019 - Itsu reports like-for-likes up 7.2% in first half of 2019, full-year turnover rises to £117m |
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Itsu reports like-for-likes up 7.2% in first half of 2019, full-year turnover rises to £117m as it moves focus to evenings: Itsu, the healthy Asian food chain created by Pret A Manger co-founder Julian Metcalfe, has reported like-for-like sales up 7.2% in the first half of 2019, with the UK business “well on the way” to reach break-even net profit by the end of the year. The progress was revealed as accounts filed at Companies House showed turnover increased 10.4% to £116,577,000 for the year ending 28 December 2018, compared with £105,559,067 the previous year as it moved its focus to evenings. Group Ebitda was up 60% to £4,102,000, compared with £2,566,140 the year before. Like-for-like sales increased 3.6%. Operating losses were down to £5,932,000, compared with £8,171,000. Pre-tax losses fell to £6,035,000, compared with £8,891,000 the previous year. In his report accompanying the accounts, Metcalfe said: “The 2018 financial statements reflect a welcome return to stronger sales growth across the group, akin to levels Itsu is more accustomed to. The group, especially the UK retail business, has had a disciplined two-year focus on reversing the detrimental profit impacts the sector has had to face into. Through a combination of strong like-for-like growth, profitable new store openings and strong profit contribution from the Itsu Grocery division, the group has been able to improve net profit by 38.9%. Overall group turnover grew 10.4% to £116,577,000 through increased grocery sales of 28%, introduction of the first owned and operated store in the US, and through UK stores by 7.5%. Like-for-like sales in the UK grew an encouraging 3.6%, largely bucking the trend within the hospitality sector. In 2018, the business made a strategic decision to exit the majority of its breakfast offer to focus on the more profitable and faster-growing evening daypart. The overall like-for-like, excluding breakfast, was 4.6%, with the evening daypart growing 2.1% in FY18 and 5.7% in the first half of 2019. FY18 saw the launch of two food innovation categories, the redeveloped hot food range and a new hand-held category, led by gyoza and wraps. Both clearly focused on health, freshness and value for money. These categories have helped the hot food category surpass 27% of sales in UK stores. More promisingly, the lower price point mix within both the cold and hot food categories has not only seen a large increase in like-for-like transaction volume but also a healthy 2.3% like-for-like increase in items per transaction (first half of FY19), proving more customers are buying more products from Itsu year on year. The Itsu Grocery business has had arguably its strongest year, with sales growth of 28%, reaching £8,955,000 and Ebitda growth of 178%. With its stronger trading performance, the UK business remained cash positive in the year, helping reduce group net debt to virtually nil. With a new three-year debt facility agreed with long-standing banking partners HSBC, the group is well capitalised – an enviable place to be in the sector this year. Loss after tax was £5,490,000 (2017: loss of £8,992,000), the key drivers being £1.3m relating to amortised goodwill of the internal purchase of the Itsu Grocery business in 2016 and continued investments in the US expansion. The UK business (retail and grocery) is well on the way to achieving its plan to reach break-even net profit in FY19, with stores posting a strong 7.2% in like-for-likes in the first half of 2019.” Itsu has more than 70 restaurants in Britain, mostly in London.
Last chance to book for Operations Directors’ Conference: Today (Friday, 20 September) is the last chance to book for the Operations Directors’ Conference, the event in which some of the sector’s leading operators will share expertise, ideas and insights into all areas of operations. The full-day event takes place on Wednesday (25 September) at One Moorgate Place in London. The event, in partnership with Elliotts chief executive Ann Elliott, will see company leaders from across the industry talk about all parts of the operating model, from building and leading an effective operations team to maximising profitability. Speakers will include Frankie & Benny’s managing director Ollie Humphries, Bill’s managing director Sarah Hills, Casper & Cole managing director Sam Lee, Oakman Inns and Restaurants chief operating officer Dermot King, Vagabond managing director Stephen Finch, Tortilla managing director Richard Morris, ETM Group owner Ed Martin, Pret A Manger’s new chief executive Pano Christou and former Fuller’s managing director Jonathon Swaine. There will also be two panel sessions. Robin Rowland, operating partner at private equity firm TriSpan and former YO! chief executive, will join Ian Edward, co-founder of Hippo Inns; Peter Kemp-Welch, partner at Piper; and Paul Campbell, founder of Hill Capital Partners; to discuss investing in great operators. Meanwhile, Miller & Carter retail operations director Sue Walsh, Pizza Pilgrims operations manager Charlie Warren and Caffe Nero managing director Glyn House will discuss building the right operations team while protecting the brand and delivering consistency for guests. Tickets are £295 plus VAT for Propel Premium subscribers and £345 plus VAT for all others. To book, email anne.steele@propelinfo.com or call 01444 817691.
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