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RNS
Patisserie Holdings PLC  -  CAKE   

Half-year Report

Released 07:00 15-May-2018

RNS Number : 0225O
Patisserie Holdings PLC
15 May 2018
 

Patisserie Holdings PLC ('the Group')

 

Interim results for the six months ended 31 March 2018

 

Patisserie Holdings PLC, the leading UK branded café and casual dining group, today reports its interim results for the six months ended 31 March 2018

Financial summary


6 months  ended

6 months  ended



31 March 2018

31 March 2017

Change


£m

£m


Revenue

60.5

55.5

9.1%

Gross profit

47.1

43.3

8.7%

EBITDA*

13.6

12.2

11.6%

Pre-tax profit

11.1

9.7

14.2%

Basic earnings per share

8.98 pence

7.95 pence

13.0%

Diluted earnings per share

8.92 pence

7.88 pence

13.2%

Interim dividend per share

1.44 pence

1.20 pence

20.0%

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

Highlights

·      Group revenue of £60.5m up by 9.1% (2017: £55.5m)

·      Gross profit of £47.1m up by 8.7% (2017: £43.3m)

Gross margin of 77.8% (2017: 78.0%)

·      EBITDA of £13.6m up by 11.6% (2017: £12.2m)

EBITDA margin of 22.5% (2017: 22.0%)

·      Pre-tax profit of £11.1m up by 14.2% (2017: £9.7m)

·      Operating cash flows of £11.9m (2017: £9.3m) with EBITDA cash conversion of 108% (2017: 96%)

·      Strong balance sheet position with net cash of £28.8m (2017: £16.2m)

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

·      Trading from 206 stores

·      Diluted earnings per share of 8.92 pence up by 13.2% (2017: 7.88 pence)

·      Interim dividend up 20% to 1.44 pence per share (2017: 1.20 pence per share)

Luke Johnson, Executive Chairman, said

"The group has delivered a strong set of results in a sector which has well documented challenges. Our vertically integrated and flexible business model enables us to deliver consistent profits with our affordable treats remaining popular with our very diverse customer base. We remain focused on organic growth and with a strong balance sheet continue to assess acquisition opportunities which will have a strategic and cultural fit."

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

Chris Connors


Henry Fitzgerald-O'Connor


 

Financial Public Relations


Maitland

+44 (0) 20 7379 5151

Sam Cartwright


Jonathan Cook


 

Chief Executive's Review

Results

I am delighted to announce our interim results for the six months ended 31 March 2018, during which we continued to deliver growth in revenues and profit.

Revenue for the period was £60.5m, an increase of £5.0m or 9.1% (2017: £55.5m). Revenue from our largest brand, Patisserie Valerie, was up £5.4m or 13.2% to £45.8m (2017: £40.4m). Due to a store closure in the prior year, revenue from our other brands was down £0.3m or 2.6% to £14.7m (2017: £15.1m).

EBITDA for the period was £13.6m, an increase of £1.4m or 11.6% (2017: £12.2m) and pre-tax profit was £11.1m, an increase of £1.4m or 14.2% (2017: £9.7m).

Basic earnings per share were 8.98 pence per share (2017: 7.95 pence per share) and diluted earnings per share were 8.92 pence per share (2017: 7.88 pence per share), an increase of 13.0% and 13.2% respectively.

The period started well with a good build up to Christmas with our new festive range, including the limited edition Reindeer slice, selling well. Sales were slightly hampered by the adverse weather conditions. However thanks to our vertically integrated supply chain and the flexibility of our workforce we were able to limit the impact on profit. We finished the period strongly with a record Mother's Day weekend and a good lead up to Easter.

The group achieved strong sales from our website of £2.6m in the period, up £1.0m or 62.5% (2017: £1.6m). This was driven by our social media strategy and the relaunch of our website in February 2018, which provides customers with an enhanced user experience, including video imaging of our products, tablet/mobile compatibility and a streamlined checkout process. The revamped website is proving successful.

We established a new product development team towards the end of the prior year and are currently trialling a number of initiatives in selected stores including a new menu, a new savoury range and in store bake-off of morning goods. In January we also launched Slice of the Month which is proving popular. All of these new product initiatives are helping to drive incremental sales.

Our partnership with Sainsbury's continues. We have a supply only agreement for a limited Patisserie Valerie range to be sold at Patisserie Valerie branded counters within Sainsbury's stores. We currently have counters in 31 Sainsbury's stores in addition to 14 click and collect locations. We will shortly be entering a further 10 Sainsbury's stores.

We continue to work hard to control our gross profit margin which remained at 77.8% (2017: 78.0%). We benefitted in the period from a number of contract renegotiations, and in some cases we switched suppliers to mitigate inflationary pressures, along with production efficiencies from investment in our bakeries in the prior year. We remain proactive in managing our cost base and in some cases we have seen a reduction in some of our core ingredient prices.

Labour inflation now has the biggest impact on profit with National Minimum Wage, National Living Wage and Apprenticeship Levy costing an additional £0.3m in the period. Ongoing labour inflation is built into our budgets and is being absorbed as the group continues to grow. Staff retention and wellbeing is a key area of strategic focus for us and we are investing in training, rewards schemes and career planning for our employees.

Rent and rates reviews added £0.2m of cost in the period and we have now had rent reviews at all of our key sites. We also made a number of smaller savings on various non-direct spends which had a cumulative positive impact of £0.4m.

 

Estate Development

We have successfully opened 10 new stores to date and are on track to deliver the Board's annual target of 20 new openings.

The openings included five new geographical locations at Basingstoke, Wigan, Cwmbran, Chesterfield and Carlisle. In addition we opened new stores in Glasgow, Liverpool, Cardiff, Milton Keynes and Sutton Coldfield.

The new store in Glasgow is our 13th store in Scotland and the addition of stores in Cwmbran and Cardiff takes the number of stores in Wales to four.

Our new openings are performing in line with management's expectations.

We currently have builders on site in three locations; Lancaster, Battersea and Belfast Forestside. These stores are expected to be open by the end of May 2018. The Belfast Forestside opening will be our fifth store in Ireland and will be serviced from our bakery in Belfast. All of the Irish stores continue to perform strongly and provide management with growing confidence in the prospects for the region.

In the period we closed two stores following lease expiries and we exited one concession arrangement.

All of our new openings are profitable from the first week of trading and are all funded from operating cash flows. We have an exciting pipeline which is well developed.

We remain confident in our ability to grow our estate and continue to believe that there is a large addressable market in the UK and Ireland.

Cash flow & Financing

In the period we generated operating cash flows of £14.7m, up £2.9m or 24.9% (2017: £11.7m). We paid £2.8m in corporation tax and spent £5.0m in capex on our estate leaving free cash flows of £6.8m, up £1.9m or 40.0% (2017: £4.9m). We returned £2.4m to shareholders in dividend payments and generated £2.9m of proceeds from the exercise of employee share options resulting in net cash at the end of the period of £28.8m (2017: £16.2m).

 

Our experienced Estates team continues to deliver high quality new stores at an average expenditure of £0.25m per site, which continue to deliver payback in less than 24 months.

 

The final dividend for the year ended 30 September 2017 of 2.4 pence per share or £2.4m in total was paid to shareholders in the period. The Group remains cash generative and the Board has declared an interim dividend for this financial year of 1.44 pence per share representing a 20% increase year on year. The interim dividend will be paid on 13 July 2018 to shareholders on the register at the close of business on 1 June 2018.

 

Our business model converts profit to cash efficiently and delivers consistent and predictable cash flows. The Group continues to be funded from operating cash flows and reserves, and with a cash balance of £28.8m at the period end, is well positioned to make strategic acquisitions should appropriate opportunities arise.

 

Current trading and outlook

Trading after the period end is in line with management's expectations. We have just launched our new summer menu which includes a new range of ice creams and iced lattes. Three new stores are due to open shortly and with a well-developed new store pipeline I am confident of a good second half to the year.

INTERIM CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE SIX MONTHS ENDED 31 MARCH 2018

 



Six months ended

 31 March

Six months ended

 31 March

Year ended

 30 September




2018

2017

2017




£'000

£'000

£'000




Total

Total

Total




Unaudited

Unaudited

Audited


Notes





Continuing operations












Revenue



60,522

55,488

114,197

Cost of sales



(13,465)

(12,188)

(24,931)







Gross profit



47,057

43,300

89,266

Administration expenses



(35,983)

(33,599)

(69,121)













Operating profit



11,074

9,701

20,145







Finance income



1

-

44







Finance expense



-

-

(36)







Profit before income tax



11,075

9,701

20,153

Income tax expense

4


(2,020)

(1,756)

(3,789)







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



 

9,055

 

7,945

 

16,364







Earnings per share

6





Basic earnings per share (pence)



8.98

7.95

16.36

Diluted earnings per share (pence)



8.92

7.88

16.20













 

INTERIM CONDENSED CONSOLIDATED BALANCE SHEET

31 MARCH 2018



31 March

31 March

30 September



2018

2017

2017



£'000

£'000

£'000



Unaudited

Unaudited

Audited


Note









ASSETS





Non-current assets





Intangible assets


17,722

17,773

17,747

Property, plant and equipment

7

42,168

38,373

39,674








59,890

56,146

57,421

Current assets





Trade and other receivables


11,654

11,059

12,327

Corporation tax


2,489

2,537

1,668

Inventories


5,990

4,901

5,980

Cash and cash equivalents


28,840

16,176

21,525








48,973

34,673

41,500






Total assets


108,863

90,819

98,921






EQUITY AND LIABILITIES





Equity





Capital and reserves attributable to the equity holders





Ordinary share capital


1,019

1,000

1,003

Share premium


36,947

33,661

34,084

Other reserves


767

550

708

Retained earnings


63,186

49,152

56,537






Total equity


101,919

84,363

92,332






Non-current liabilities





Deferred tax


1,477

1,924

1,422








1,477

1,924

1,422

Current liabilities





Trade and other payables


5,467

4,532

5,167








5,467

4,532

5,167






Total liabilities


6,944

6,456

6,589






Total equity and liabilities


108,863

90,819

98,921











 

 

 

Registered no. 08963601

INTERIM CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE SIX MONTHS ENDED 31 MARCH 2018

 

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 2017

1,003

34,084

(312)

46

974

56,537

92,332









Result and total comprehensive income for the period

 

-

 

-

 

-

 

-

 

-

 

9,055

 

9,055


1,003

34,084

(312)

46

974

65,592

101,387

Transactions with owners








Issue of ordinary shares under employee share option scheme

 

16

 

2,863

 

-

 

-

 

-

 

-

 

2,879

Dividends to equity holders of the company

 

-

 

-

 

-

 

-

 

-

 

(2,406)

 

(2,406)

Increase in share based payment reserve

-

-

-

-

59

-

59









As at 31 March 2018

1,019

36,947

(312)

46

1,033

63,186

101,919









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









Audited








As at 30 September 2016

1,000

33,661

(312)

46

657

43,143

78,195









Result and total comprehensive income for the year

-

-

-

-

-

16,364

16,364


1,000

33,661

(312)

46

657

59,507

94,559

Transactions with owners








Issue of ordinary shares under employee share option scheme

3

423

-

-

-

-

426

Dividends to equity holders of the company

-

-

-

-

-

(3,200)

(3,200)

Deferred tax credit relating to share option scheme

-

-

-

-

-

230

230

Increase in share based payments reserve

-

-

-

-

317

-

317









As at 30 September 2017

1,003

34,084

(312)

46

974

56,537

92,332

 

INTERIM CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE SIX MONTHS ENDED 31 MARCH 2017

 


Six months ended

 31 March

Six months ended

 31 March

Year ended

 30 September



2018

2017

2017



£'000

£'000

£'000



Unaudited

Unaudited

Audited






Cash flows from operating activities





Profit before income tax


11,075

9,701

20,153






Adjusted by:





Depreciation and amortisation


2,560

2,521

5,491

Net finance income in the consolidated statement of comprehensive income


(1)

-

(8)

Other non-cash charges


59

159

317






Changes in working capital:





Inventory


(10)

(39)

(1,118)

Trade and other receivables


673

(55)

(559)

Trade and other payables


300

(549)

86






Cash generated from operations


14,656

11,738

24,362

Net interest received


1

-

8

Income tax paid


(2,786)

(2,464)

(3,962)






Net cash generated from operating activities


11,871

9,274

20,408






Cash flows from investing activities





Purchase of property, plant and equipment


(5,029)

(4,371)

(8,722)

Cash advances


-

-

(764)

Proceeds  from disposal of property, plant and equipment


-

-

105






Net cash used in investing activities


(5,029)

(4,371)

(9,381)






Cash flows from financing activities





Net proceeds from issue of shares


2,879

-

425

Dividends paid to equity holders of the parent company


(2,406)

(2,000)

(3,200)






Net cash generated from / (used) in financing activities


473

(2,000)

(2,775)






Net increase in cash and cash equivalents


7,315

2,903

8,252

 

Cash and cash equivalents at the beginning of the period


 

21,525

 

13,273

 

13,273






 

Cash and cash equivalents at the end of the period

 

 

 

28,840

 

16,176

 

21,525











 

 





NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE SIX MONTH ENDED 31 MARCH 2018

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 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 2017 does not constitute the full statutory accounts for that period. The Annual Report and Financial Statements for 2017 have been filed with the Registrar of Companies. The Independent Auditor's Report on the Annual Report and Financial Statements for 2017 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 2018, 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.

Six months ended

31 March 2018

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

45,786

6,698

2,375

1,697

4,878

-

61,434

(912)

60,522











Operating profit

8,934

768

519

257

723

(127)

11,074

-

11,074





















Six months ended

31 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





















Year ended

30 September 2017

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

84,339

13,059

4,738

3,634

10,183

-

115,953

(1,756)

114,197











Operating profit

16,267

1,202

1,134

565

1,445

(468)

20,145

-

20,145

 

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


Six months ended

Six months ended

Year ended


31 March 2018

31 March 2017

30 September 2017


£'000

£'000

£'000


Unaudited

Unaudited

Audited





Total operating profit from reportable segments

11,201

10,023

20,613

Other segment profit

(127)

(322)

(468)

Net finance income

1

-

8





Profit before income tax

11,075

9,701

20,153





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 2018 applied against the profit before tax for the period ended 31 March 2018. The full year effective tax charge on the underlying trading profit is estimated to be 19.0% (2017: 19.5%).

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

 


Six months ended  

31 March

Six months ended

31 March

Year ended

30 September


2018

2017

2017


£'000

£'000

£'000


Unaudited

Unaudited

Audited





Operating profit

11,074

9,701

20,145

Depreciation and amortisation

2,560

2,521

5,491





EBITDA

13,634

12,222

25,636





 

6.         Earnings per share















Six months ended

31 March 2018




Earnings

£'000

Weighted average number of share

Earnings per share

(pence)

Unaudited







Basic earnings per share




9,055

100,793,644

8.98

Effect of dilutive share options




-

715,043

-








Diluted earnings per share




9,055

101,508,687

8.92















Six months ended

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















Year ended

30 September 2017




Earnings

£'000

Weighted average number of share

Earnings per share

(pence)

Audited







Basic earnings per share




16,364

100,054,292

16.36

Effect of dilutive share options




-

942,068

-








Diluted earnings per share




16,364

100,996,360

16.20








 

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 2016

1,798

14,971

51,890

27

68,686

Additions

-

205

4,166

-

4,371







At 31 March 2017

1,798

15,176

56,056

27

73,057

Additions

-

1,062

3,289

-

4,351

Disposals

-

(290)

(292)

(27)

(609)







At 30 September 2017

1,798

15,948

59,053

-

76,799

Additions

-

255

4,774

-

5,029







At 31 March 2018

1,798

16,203

63,827

-

81,828







Depreciation






At 1 October 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

Charge for the period

13

458

2,470

4

2,945

Disposals

-

(185)

(292)

(27)

(504)







At 30 September 2017

307

7,111

29,707

-

37,125

Charge for the period

13

457

2,065

-

2,535

Disposals












At 31 March 2018

320

7,568

31,772

-

39,660







Net book values






At 31 March 2018

1,478

8,635

32,055

-

42,168

At 30 September 2017

1,491

8,837

29,346

-

39,674

At 31 March 2017

1,504

8,338

28,527

4

38,373







 

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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