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Patisserie Holdings PLC  -  CAKE   

Interim Results for six months ended 31 March 2017

Released 07:00 17-May-2017

RNS Number : 3468F
Patisserie Holdings PLC
17 May 2017
 

Patisserie Holdings PLC ('the Group')

 

Interim results for the six months ended 31 March 2017

 

Patisserie Holdings PLC, the leading UK branded café and casual dining group, today reports its interim results for the six months ended 31 March 2017

Financial summary


6 months  ended

6 months  ended



31 March 2017

31 March 2016

Change


£m

£m


Revenue

55.5

50.0

11.0%

Gross profit

43.3

39.2

10.6%

EBITDA*

12.2

10.6

15.6%

Pre-tax profit

9.7

8.4

15.7%

Basic earnings per share

7.95 pence

6.68 pence

19.0%

Diluted earnings per share

7.88 pence

6.61 pence

19.2%

Interim dividend per share

1.20 pence

1.00 pence

20.0%

* EBITDA is calculated as operating profit before depreciation and amortisation.

Highlights

·      Group revenue of £55.5m up by 11.0% (2016: £50.0m)

·      Gross profit of £43.3m up by 10.6% (2016: £39.2m)

Gross margin of 78.0% (2016: 78.3%)

·      EBITDA of £12.2m up by 15.6% (2016: £10.6m)

EBITDA margin of 22.0% (2016: 21.1%)

·      Pre-tax profit of £9.7m up by 15.7% (2016: £8.4m)

·      Operating cash flows of £9.3m (2016: £8.9m) with EBITDA cash conversion of 96%

·      Strong balance sheet position with net cash at 31 March 2017 of £16.2m (2016: £8.9m)

·      10 new stores opened to date all funded from operating cash flow with a strong pipeline of further new sites

·      Trading from 192 stores

·      Diluted earnings per share of 7.88 pence up by 19.2% (2016: 6.61 pence)

·      Interim dividend up 20% to 1.20 pence per share (2016: 1.00 pence per share)

Luke Johnson, Executive Chairman, said

"We have delivered another strong set of results with growth in both revenues and profit and excellent cash conversion despite the challenging market conditions and the current inflationary environment. We have opened 10 new stores including our first international store in the Republic of Ireland, and the pipeline to the end of the year to achieve our target of 20 new store openings is on track. With a strong balance sheet and an experienced management team, we remain operationally focused on the organic delivery and continue to assess acquisition opportunities. Accordingly I am confident of delivering a successful second half of the year and beyond."

Enquiries

Patisserie Holdings PLC

+44 (0)121 777 7000

 

Luke Johnson, Executive Chairman

Paul May, Chief Executive Officer

Chris Marsh, Finance Director

 

Nomad and Broker

Canaccord Genuity Limited

+44 (0)20 7523 8000

 

Bruce Garrow

Chris Connors

Ben Griffiths

 

Financial Public Relations

Maitland

+44 (0) 20 7379 5151

 

Dan Yea

 

Chief Executive's Review

Results

In the first half of the year, we have delivered another strong performance, both financially and operationally, due to our robust operating model, strong management team and appealing brands.

Revenue for the period is £55.5m, an increase of £5.5m or 11.0% (2016: £50.0m). EBITDA is £12.2m, an increase of £1.6m or 15.6% (2016: £10.6m) and pre-tax profit is £9.7m, an increase of £1.3m or 15.7% (2016: £8.4m).

Basic earnings per share is 7.95 pence per share (2016: 6.68 pence per share) and diluted earnings per share is 7.88 pence per share (2016: 6.61 pence per share), an increase of 19.0% and 19.2% respectively.

Revenues from our principal brand, Patisserie Valerie are £40.4m, up £5.5m or 15.7% (2016: £35.0m) and revenues from our other brands are £15.9m, up £0.1m or 0.6% (2016: £15.8m).

Revenue from our website continues to grow with digital sales in the period of £1.6m, up £0.2m or 14.3% (2016: £1.4m). Our Cakeclub membership increased by 22,000 members in the period, up to 383,000, with an ever increasing social media following.

Our seasonal ranges performed particularly well in the period with sales from our winter menu up over 160%, we sold over 103,000 mince pies and our new festive afternoon tea range sold over 26,000 units.

Earlier this year we ran a competition, inviting customers to design a custom gateau. We received over 11,000 entries and the chosen winner was named the Madame Valerie Gateau. The Gateau contains chocolate layers, caramel cream and honeycomb pieces and was launched for general sale in January 2017. The Madame Valerie Gateau has become our best-selling online 8" gateau with the corresponding slice becoming our fifth best seller instore.

In April, we entered into a 12 week supply only trial with Sainsbury's. The arrangement is to supply 12 nationwide Sainsbury's stores with Patisserie Valerie product which is being sold instore from Patisserie Valerie branded counters at Patisserie Valerie price points.

In the first half of the period, inflation on food costs was high, however, we are now seeing prices stabilise with the majority of core ingredients now at normalised levels. We have actively mitigated inflationary pressures resulting in only a minor impact of 0.3% on our gross profit margin which was 78.0% for the period (2016: 78.3%). We are continually working on our supply chain to ensure we buy at the best market prices and have fixed price contracts on a number of key lines. With further improvements in our supply chain and operational gearing from the growing group, we expect our gross margin to be broadly constant to the end of the year.

Pay rates continue to increase from the impact of both National Minimum and National Living Wage. However, with more effective rostering in stores, as well as making some minor central changes, we have limited the impact of pay pressures whilst maintaining an excellent customer experience.

Additional wage increases implemented in April 17 with the next stage of the National Living Wage increase will have an impact of approximately £0.5m on our wage bill. Again with more effective rostering and other areas of scale benefits that will come through in the second half of the year, we would hope to mitigate much of this increase.

Other costs have remained relatively benign with no material rent increases and the change in Business Rates from April 2017 likely to be neutral across our nationwide estate.

Estate Development

We continue to target 20 new store openings per year and in the period to the date of our results announcement have opened 10 new stores, which are trading strongly, and 2 closures due to leases expiring. The openings are a mixture of counter and full menu offerings with locations ranging from high-streets, retail parks and concession arrangements.

In the prior year we opened our first store in Belfast, Northern Ireland, and trading to date has been excellent. The store is fitted with a bakery to support at least a further 10 store openings. Following the success of the Belfast store, in the period we opened one additional store at Castle Lane, Belfast.    

We have also opened our first International store in Blanchardstown, Republic of Ireland and the encouraging, albeit early, success in this market has highlighted to management that the brand has international potential.

In the period we opened our first store under our Philpotts brand since its acquisition in 2014. The store is located in Manchester's financial and professional services hub at Spinningfields. Sales to date have been promising.

Other notable openings in the period include Dundee, which is our 11th store in Scotland, and Ashford Kent which is located on the McArthur Glenn designer complex. Performance at all of our designer outlet centres continues to remain strong.

All of our new openings are profitable from the first week of trading and are all funded from operating cash flows. The new store pipeline is healthy giving confidence on our target of opening a total of 20 new stores for the full year.

We continue to believe there is considerable scope to expand the footprint of our estate and remain confident of the large addressable market in the UK and Ireland.

Cash flow & Balance sheet

The Group maintains a strong balance sheet which is funded from operating cash flow and reserves and it is the reliability and predictability of the strong cash generation that is so manifest in the business model. In the period the Group generated operating cash flows of £11.7m, up £1.5m or 15.2% (2015: £10.2m), £2.5m was used to make income tax payments and £4.4m was invested in capital expenditure leaving free cash flows of £4.9m (2015: £4.5m).

 

We invested £2.9m in new stores and £1.5m in refurbishment of the existing estate or additional bakery or fleet facilities. The return on investment from our stores remains strong with the majority of stores having a payback period of less than 24 months and the average remains 23 months.

 

In the period, the final dividend for the year ended 30 September 2016 of 2 pence per share or £2.0m in total was paid to shareholders. The Group remains cash generative and the Board has declared an interim dividend for this financial year of 1.20 pence per share representing a 20% increase year on year. The interim dividend will be paid on 7th July 2017 to shareholders on the register at the close of business on 2nd June 2017.

 

Net cash at the end of the first half is £16.2m (2015: £8.9m) and the group is well positioned to make acquisitions of portfolios of stores to convert to the Patisserie Valerie brand, and acquisitions of other brands which will add value to the Group.

Current trading and outlook

Performance in the six weeks after the period end has been good with a strong Easter period. We are on track with our roll-out programme and have some exciting new locations for the remainder of the year. We continue to react positively to changes in the market place and I am confident we are well positioned to deliver another period of good growth in the second half of the year.

 

 

 

 

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE SIX MONTHS ENDED 31 MARCH 2017

 



Six months to

 31 March

Six months to

 31 March

Year to

 30 September




2017

2016

2016




£'000

£'000

£'000




Total

Total

Total




Unaudited

Unaudited

Audited


Notes





Continuing operations












Revenue



55,488

49,984

104,141

Cost of sales



(12,188)

(10,825)

(22,832)







Gross profit



43,300

39,159

81,309

Administration expenses



(33,599)

(30,774)

(64,099)













Operating profit



9,701

8,385

17,210







Finance expense



-

-

(6)







Profit before income tax



9,701

8,385

17,204

Income tax expense

4


(1,756)

(1,707)

(3,469)







Profit after tax and total comprehensive income for the period attributable to equity holders



 

7,945

 

6,678

 

13,735







Earnings per share

6





Basic earnings per share (pence)



7.95

6.68

13.74

Diluted earnings per share (pence)



7.88

6.61

13.60







 

CONDENSED CONSOLIDATED BALANCE SHEET

31 MARCH 2017



31 March

31 March

30 September



2017

2016

2016



£'000

£'000

£'000



Unaudited

Unaudited

Audited


Notes









ASSETS





Non-current assets





Intangible assets


17,773

17,822

17,797

Property, plant and equipment

7

38,373

34,908

36,498








56,146

52,730

54,295

Current assets





Trade and other receivables


11,059

9,552

11,004

Corporation tax


2,537

1,286

1,896

Inventories


4,901

4,608

4,862

Cash and cash equivalents


16,176

8,922

13,273








34,673

24,368

31,035






Total assets


90,819

77,098

85,330






EQUITY AND LIABILITIES





Equity





Capital and reserves attributable to the equity holders





Ordinary share capital


1,000

1,000

1,000

Share premium


33,661

33,661

33,661

Other reserves


550

216

391

Retained earnings


49,152

37,154

43,143






Total equity


84,363

72,031

78,195






Non-current liabilities





Deferred tax


1,924

1,704

2,054








1,924

1,704

2,054

Current liabilities





Trade and other payables


4,532

3,363

5,081








4,532

3,363

5,081






Total liabilities


6,456

5,067

7,135






Total equity and liabilities


90,819

77,098

85,330











 

Registered no. 08963601

 

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE SIX MONTHS ENDED 31 MARCH 2017

 

Share

 capital

Share

 premium

Merger

reserve

Capital redemption reserve

Share based payment reserve

Retained earnings

Total


£'000

£'000

£'000

£'000

£'000

£'000

£'000

Unaudited








As at 30 September 2016

1,000

33,661

(312)

46

657

43,143

78,195









Result and total comprehensive income for the period






 

7,945

 

7,945










1,000

33,661

(312)

46

657

51,088

86,140

Transactions with owners








Deferred tax credit relating to share option scheme

 

-

 

-

 

-

 

-

 

-

 

64

 

64

Increase in share based payment reserve

-

-

-

-

159

-

159

Dividends to equity holders of the company

 

-

 

-

 

-

 

-

 

-

 

(2,000)

 

(2,000)









As at 31 March 2017

1,000

33,661

(312)

46

816

49,152

84,363









Unaudited








As at 30 September 2015

1,000

33,661

(312)

46

324

31,979

66,698









Result and total comprehensive income for the period

-

-

-

-

-

6,678

6,678










1,000

33,661

(312)

46

324

38,657

73,376

Transactions with owners








Deferred tax credit relating to share option scheme

 

-

 

-

 

-

 

-

 

-

 

167

 

167

Increase in share based payment reserve

-

-

-

-

158

-

158

Dividends to equity holders of the company

 

-

 

-

 

-

 

-

 

-

 

(1,670)

 

(1,670)









As at 31 March 2016

1,000

33,661

(312)

46

482

37,154

72,031









Audited








As at 30 September 2015

1,000

33,661

(312)

46

324

31,979

66,698









Result and total comprehensive income for the year

-

-

-

-

-

13,735

13,735










1,000

33,661

(312)

46

324

45,714

80,433

Transactions with owners








Dividends to equity holders of the company

-

-

-

-

-

(2,670)

(2,670)

Deferred tax credit relating to share option scheme

-

-

-

-

-

99

99

Increase in share based payments reserve

-

-

-

-

333

-

333

















As at 30 September 2016

1,000

33,661

(312)

46

657

43,143

78,195









 

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE SIX MONTHS ENDED 31 MARCH 2017

 


Six months to

 31 March

Six months to

 31 March

Year to

 30 September



2017

2016

2016



£'000

£'000

£'000



Unaudited

Unaudited

Audited


Notes




Cash flows from operating activities





Profit before income tax


9,701

8,385

17,204






Adjusted by:





Depreciation and amortisation


2,521

2,185

4,951

Net finance charges in the consolidated statement of comprehensive income


-

-

6

Other non-cash charges


159

164

333






Changes in working capital:





Inventory


(39)

(172)

(426)

Trade and other receivables


(55)

342

(1,109)

Trade and other payables


(549)

(719)

999






Cash generated from operations


11,738

10,185

21,958

Interest paid


-

-

(6)

Income tax paid


(2,464)

(1,293)

(3,378)






Net cash generated from operating activities


9,274

8,892

18,574






Cash flows from investing activities





Purchase of property, plant and equipment


(4,371)

(4,395)

(8,726)






Net cash used in investing activities


(4,371)

(4,395)

(8,726)






Cash flows from financing activities





Dividends paid to Company's shareholders


(2,000)

(1,670)

(2,670)






Net cash used in financing activities


(2,000)

(1,670)

(2,670)






Net increase in cash and cash equivalents


2,903

2,827

7,178

 

Cash and cash equivalents at the beginning of the period


 

13,273

 

6,095

 

6,095






 

Cash and cash equivalents at the end of the period

 

 

 

16,176

 

8,922

 

13,273











 

 

 





 

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE SIX MONTH ENDED 31 MARCH 2017

1.      General information

Patisserie Holdings plc (the Company) and its subsidiaries (collectively the Group) operate in the casual dining sector offering cakes, pastries, snacks, meals and hot and cold drinks across the UK.

The Company is a public limited company which is listed on the Alternative Investment Market (AIM) of the London Stock Exchange and incorporated and domiciled in England and Wales. The registered office of the Company is 146 - 156 Sarehole Road, Birmingham, B28 8DT. This document along with copies of the Annual Report and Accounts may be obtained from the registered office or via the Investor section of the Company's website at www. patisserie-valerie.co.uk

 

2.      Basis of preparation

The condensed financial statements have been prepared using accounting policies consistent with International Financial Reporting Standards (IFRS) and International Financial Reporting Interpretations Committee (IFRIC) interpretations as endorsed by the European Union and in accordance with IAS34 - "Interim Financial Reporting". The same accounting policies, presentation and methods of computation have been followed in the preparation of these results as were applied in the Group's latest annual audited financial statements.

The financial information for the year ended 30 September 2016 does not constitute the full statutory accounts for that period. The Annual Report and Financial Statements for 2016 have been filed with the Registrar of Companies. The Independent Auditors' Report on the Annual Report and Financial Statements for 2016 was unqualified, did not draw attention to any matters by way of emphasis, and did not contain a statement under 498(2) or 498(3) of the Companies Act 2006.

The condensed financial statements have been prepared under the historical cost convention and financial information is presented in sterling and has been rounded to the nearest thousand (£'000) unless otherwise stated.

 

3.      Segmental information

Management has determined the operating segments based on the reports reviewed by the Chief Operating Decision Maker ("CODM") comprising the Board of Directors. During the six month period to 31 March 2017, there have been no changes from prior periods in the measurement methods used to determine operating segments and reported segment profit or loss.

 

The segmental information is split on the basis of those same profit centres, however, management report only the contents of the consolidated statement of comprehensive income and therefore no balance sheet information is provided on a segmental basis in the following tables.

March 2017

Patisserie Valerie

Druckers

Baker & Spice

Flour Power

Philpotts

Overhead

As reported to the CODM

Reconciling items

Total

IFRS

Unaudited

£'000

£'000

£'000

£'000

£'000

£'000

£'000

£'000

£'000











Revenue

40,437

7,009

2,374

1,795

4,724

-

56,339

(851)

55,488











Operating profit

7,823

724

518

250

708

(322)

9,701

-

9,701





















March 2016

Patisserie Valerie

Druckers

Baker & Spice

Flour Power

Philpotts

Overhead

As reported to the CODM

Reconciling items

Total

IFRS

Unaudited

£'000

£'000

£'000

£'000

£'000

£'000

£'000

£'000

£'000











Revenue

34,953

6,851

2,231

1,830

4,903

-

50,768

(784)

49,984











Operating profit

6,575

644

523

254

619

(230)

8,385

-

8,385





















September 2016

Patisserie Valerie

Druckers

Baker & Spice

Flour Power

Philpotts

Overhead

As reported to the CODM

Reconciling items

Total

IFRS

Audited

£'000

£'000

£'000

£'000

£'000

£'000

£'000

£'000

£'000











Revenue

73,905

13,310

4,701

3,684

10,244

-

105,844

(1,703)

104,141











Operating profit

13,815

1,216

1,111

535

1,208

(675)

17,210

-

17,210

 

The Group's segment operating profit reconciles to the Group's profit before tax as presented in its financial statements as follows:


31 March 2017

31 March 2016

30 September 2016


£'000

£'000

£'000


Unaudited

Unaudited

Audited





Total operating profit from reportable segments

10,023

8,615

18,885

Other segment profit

(322)

(230)

(675)

Finance expense

-

-

(6)





Profit before income tax

9,701

8,385

17,204









4.         Income tax expense

The tax charge has been calculated by reference to the expected effective current and deferred tax rates for the full financial year to 30 September 2017 applied against the profit before tax for the period ended 31 March 2017. The full year effective tax charge on the underlying trading profit is estimated to be 19.5% (2016: 20.0%).

5.         Earnings before interest, tax, depreciation and amortisation (EBITDA)

 


31 March

31 March

30 September


2017

2016

2016


£'000

£'000

£'000


Unaudited

Unaudited

Audited





Operating profit

9,701

8,385

17,210

Depreciation and amortisation

2,521

2,185

4,951





EBITDA

12,222

10,570

22,161





 

6.         Earnings per share















31 March 2017




Earnings

£'000

Weighted average number of share

Earnings per share

(pence)

Unaudited







Basic earnings per share




7,945

100,000,000

7.95

Effect of dilutive share options




-

861,669

-








Diluted earnings per share




7,945

100,861,669

7.88















31 March 2016




Earnings

£'000

Weighted average number of share

Earnings per share

(pence)

Unaudited







Basic earnings per share




6,678

100,000,000

6.68

Effect of dilutive share options




-

1,066,762

-








Diluted earnings per share




6,678

101,066,762

6.61















30 September 2016




Earnings

£'000

Weighted average number of share

Earnings per share

(pence)

Audited







Basic earnings per share




13,735

100,000,000

13.74

Effect of dilutive share options




-

998,163

-








Diluted earnings per share




13,735

100,998,163

13.60








 

7.         Property, plant and equipment

Unaudited

Freehold land and buildings

Leasehold property improvements

Plant, equipment, fixtures and fittings

Motor vehicles

Total


£'000

£'000

£'000

£'000

£'000

Cost






At 1 October 2015

1,798

14,676

44,053

56

60,583

Additions

-

-

4,395

-

4,395

Disposals

-

-

-

(14)

(14)







At 31 March 2016

1,798

14,676

48,448

42

64,964

Additions

-

363

3,968

-

4,331

Disposals

-

(68)

(526)

(15)

(609)







At 30 September 2016

1,798

14,971

51,890

27

68,686

Additions

-

205

4,166

-

4,371

Disposals

-

-

-

-

-







At 31 March 2017

1,798

15,176

56,056

27

73,057







Depreciation






At 1 October 2015

255

5,490

22,122

37

27,904

Charge for the period

13

419

1,723

5

2,160

Disposals

-

-

-

(8)

(8)







At 31 March 2016

268

5,909

23,845

34

30,056

Charge for the period

13

518

2,207

3

2,741

Disposals

-

(68)

(526)

(15)

(609)







At 30 September 2016

281

6,359

25,526

22

32,188

Charge for the period

13

479

2,003

1

2,496

Disposals












At 31 March 2017

294

6,838

27,529

23

34,684







Net book values






At 31 March 2017

1,504

8,338

28,527

4

38,373

At 30 September 2016

1,517

8,612

26,364

5

36,498

At 31 March 2016

1,530

8,767

24,603

8

34,908







 

There were no assets held under finance leases during the period.


This information is provided by RNS
The company news service from the London Stock Exchange
 
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Interim Results for six months ended 31 March 2017 - RNS