Interim results presentation for the six months ended 31 March 2015 May 2015
Contents Introduction 02 Highlights 04 Financial Performance 06 Operational Progress 11 Current trading and outlook 16
INTRODUCTION
Senior management team HIGHLY EXPERIENCED SENIOR TEAM WHICH HAS SUCCESSFULLY GROWN THE BUSINESS FROM 8 STORES IN 2006 TO OVER 150 TODAY Paul May Luke Johnson Chris Marsh Executive Chief Executive Finance Director Chairman Founder and Chairman of Risk Joined as CEO in 2006 Joined as Finance Director in Capital Partners 2006 Has overseen expansion from 8 to over 150 stores Very significant multi-site Has worked with Paul since consumer experience 1998 Highly successful entrepreneurial background as Chairman, grew Pizza Has advised many companies Express from 12 to 250 over the past 15 years in FD founder of Cash A Cheque restaurants and a market and consultancy roles group, later sold to the capitalisation of £500m, Money Shop Previous experience includes between 1992 and 1999 has invested in businesses roles at two AIM-listed across a number of other current and previous companies industries leisure investments include Strada, Giraffe and Gail’s Chartered Accountant and Tax leisure and retail examples Accountant, formerly with EY include the Greyhound Racing Association 3
HIGHLIGHTS 4
Highlights • Continued strong growth in revenue, up 22.2% to £43.7m (2014: £35.7m) • EBITDA, up 23.1% to £8.7m (2014: £7.1m) • Pre tax profits up 45.0% to £7.0m (2014: £4.8m) Net increase in cash of £4.4m with period end cash balances of £3.0m. • • 10 new stores opened in current financial year funded from free cash flow Including second motorway service station Further expansion in Scotland Website re-launched • Includes “create -a- cake” feature • Currently trading from 156 sites 5
FINANCIALS
Financial overview DELIVERING STRONG GROWTH AND HIGH LEVELS OF CASH CONVERSION WITH THE ABILITY TO SELF-FINANCE NEW STORE ROLLOUT Group EBITDA (£m) Revenue (£m) 19.9% 19.8% 18 21.0% 15 18.0% 12 15.0% 50 9 43.7 8.7 12.0% 6 7.1 40 35.7 14.8 9.0% 3 10.6 30 -- 6.0% HY2014A HY2015A EBITDA EBITDA Margin 20 Cash flow from operations (£m) 12 120.0% 28.9 106% 25.2 10 10 100.0% 81% 9.2 8 -- 80.0% HY2014A HY2015A 6 Patisserie Valerie Other 5.8 60.0% 4 40.0% 2 -- 20.0% HY2014A HY2015A Cash from operations Cash conversion 7
Group income statement 6 months 6 months ended ended 31 March 31 March 2015 2014 £’000 £’000 Total Total % Change Commen enta tary Continuing inuing oper erations ions Revenue nue 43,68 683 35,74 747 +22.2% Cost of sales (9,940) (8,094) Revenue up £7.9m or 22.2% to £43.7m. • Gros oss prof ofit it 33,74 743 27,65 653 +22.0% Administrative expenses (26,754) (22,314) • Gross margin maintained at 77.2% - dilution of GP from Philpotts acquisition offset by improvements in rest of group. EBITDA 8,713 7,078 +23.1% • EBITDA margin of 20.0% maintained on enlarged estate. Operating ing prof ofit it 6,989 89 5,339 39 +30.9% Profit before tax up £1.9m or 45.0% to £7.0m • Finance expense (34) (541) Tax rate of 21% applied in current period. • Prof ofit it before ore inco come me tax 6,955 55 4,798 98 +45.0% Income tax expense (1,460) (1,115) • Strong diluted EPS growth of 19.7% to 5.46 Prof ofit it after er tax and total l compr mpreh ehens ensiv ive e pence per share. inco come me for the year attrib ibutabl utable e to equit ity y 5,495 95 3,683 83 +49.2% holde lders Earnings per share Basic earnings per share (pence) 5.50 4.79 +14.7% Diluted earnings per share (pence) 5.46 4.56 +19.7% 8
Group Cash Flow 6 months 6 months ended ended 31 March 31 March 2015 2014 Commen enta tary £’000 £’000 • Cash flow generated from operations remains Cash h flows ws from operating ing activ ivit itie ies Adjusted profit before income tax 6,955 4,798 strong with £9.2m of cash inflows generated in the period. Adjusted by: Depreciation 1,724 1,473 • Group remains debt free with no external Net finance charges in the consolidated statement of 34 541 borrowings. comprehensive income Other non-cash charges 123 - • Cash outflow used in investing activities Changes in working capital 404 (1,317) represents capital expenditure predominately on new stores. Cash generated from operations 9,240 5,495 Interest paid (34) (276) • Group cash flows sufficient to fund ongoing roll- Income tax paid (1,207) (1,396) out programme. Net cash generat ated from operating ing activ ivit itie ies 7,999 4,823 Net cash used in investing ng activ ivit itie ies (3,602) (7,639) Net cash generat ated from financ inancing ing activ ivit ities - 5,147 Net increas ease in cash h and cas ash h equivale alent nts 4,397 1,331 Cash and cash equivalents at the beginning of the year (1,419) (1,124) Cash h and cash h equivalents alents at the end of the year 207 207 2,978 9
Balance sheet At 31 At 30 March September 2015 2014 Commen enta tary £’000 £’000 ASSETS • Strong balance sheet with no long-term debt. Non-cur urrent nt assets Intangible assets 17,872 17,897 Property, plant and equipment 30,699 28,794 • Working capital movement expected to be neutral to year end. 48,571 46,691 Current ent assets • Balance sheet and cash flow supporting Trade and other receivables 9,964 10,552 Inventories 4,118 3,927 targeted maiden dividend in 2015. Cash and cash equivalents 2,978 484 17,060 14,963 Total l assets ets 65,631 61,654 EQUITY AND LIABIL BILITIES Total l equity 60,474 54,856 Non-cur urrent nt liabilit litie ies Borrowings - - Deferred tax 1,746 1,746 1,746 1,746 Current ent liab abilit ilities Trade and other payables 3,411 3,149 Borrowings - 1,903 Corporation tax - - 3,411 5,052 Total l liab abil ilit itie ies 5,157 6,798 Total l equity and liab abilit ilities 65,631 61,654 10
OPERATIONAL PROGRESS 11
Store Roll-out Site Service vice Type pe Store Type St • Ten new stores opened in the period Glasgow - Silverburn Counter service High street across several different formats. Wimbledon Full service High street High Wycombe Full service Shopping centre • Strong pipeline of target sites and confident to achieve year end target. Hounslow NEXT Counter High street Worcester Full service High street Tunbridge Wells Full service High street • One store (Swindon) opened since the interim date and two due to be opened Romford Counter service High street this month (Hammersmith & Clapham) Glasgow Royal Exchange Brasserie High street Baldock Counter service Service station • Targeting first new Baker & Spice store York Coppergate Full service Shopping centre in second half of the year 12
New Developments • New w produc oduct lines es tested ed in the perio iod d with h encoura ouraging ing resu sults ts includ ludin ing gluten en free, ee, season asonal al and d festiv tive range. • Seaso asonal al menu trial ialled led with th impr mproveme ement t in sales les from om new w Winter er menu. . Summe mer menu now in plac ace. After ernoo oon tea a introduc oduced ed in 7 stores with th stron ong sales es and d ver ery positiv tive • custome omer feedb edbac ack. . Now w launched hed in 99 stores. es. • Websit bsite e re- launched in January and now includes virtual tours and a “create -a- cake” feature. Web sales up 20%. • “Create -a- cake” is now best selling cake and improving online sales. • Bran and d aware renes ess con onstan tantly tly improvi ving with th Cake Club b membe bership hip up 41% to 200,00 ,000 memb mber ers s and Facebo book follo lowers s up 60% to 35,000 follo lowers. s. • Third party ty relati lations onships ips developed loped includ ludin ing Amaz azon on Local al Busines iness s and d Barcla lays s Private e Clien ients. s. 13
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