PATISSERIE HOLDINGS PLC Preliminary results for the 12 months ended 30 September 2017 November 2017 0
Contents Highlights 2 Financial Performance 4 Operational Progress 10 Current Trading and Outlook 18
HIGHLIGHTS
Full Year to 30 September 2017 - Highlights Revenue up 9.7% to £114.2m (2016: £104.1m) • EBITDA up 15.7% to £25.6m (2016: £22.2m) • Pre tax profits up 17.1% to £20.2m (2016: £17.2m) • Diluted EPS growth of 19.1% to 16.20 pence per • share (2016: 13.60 pence per share) Operating cash flow of £24.4m, with year end cash • balances of £21.5m Final dividend of 2.40 pence per share proposed up • 20% 20 new stores opened all funded from operating • cash flow First two new stores opened in Republic of Ireland Costs tightly controlled with inflationary wage and • ingredient cost pressures managed in the year. 3
FINANCIAL PERFORMANCE
Financial Overview DELIVERING STRONG GROWTH AND HIGH LEVELS OF CASH CONVERSION WITH THE ABILITY TO CONTINUE TO SELF-FINANCE NEW STORE ROLLOUT Revenue (£m) Group EBITDA (£m) 22.4% 21.3% 27 20.4% 20.0% 20.0% 21.0% 24 Year Ended 30 September 2017 25.6 18.0% 21 120 22.2 114.2 18 15.0% 18.8 110 104.1 15 12.0% 15.3 12 100 29.9 9.0% 91.9 12.0 9 90 6.0% 30.2 6 76.6 3.0% 3 80 29.0 -- -- 70 FY2013A FY2014A FY2015A FY2016A FY2017A 60.1 25.3 EBITDA EBITDA margin 60 Cash flow from operations (£m) 17.3 50 25 99% 98% 84.3 100.0% 24.4 40 87% 73.9 20 22.0 95% 76% 62.9 30 80.0% 51.3 18.3 15 42.8 20 60.0% 10 10 40.0% 10.5 -- 8.4 5 20.0% FY2013A FY2014A FY2015A FY2016A FY2017A -- -- Patisserie Valerie Other Brands FY2013A FY2014A FY2015A FY2016A FY2017A Cash from operations Cash conversion 5
Group Income Statement 12 months 12 months ended ended 30 September 30 September 2017 2016 Revenue up 9.7% to £114.2m (2016: • £’000 £’000 £104.1m). Total Total % change Continuing operations Online sales up 26% to £4.8m • Revenue 114,197 104,141 +9.7% (2016: £3.8m). Cost of sales (24,931) (22,832) Gross margin of 78.2% maintained • Gross profit 89,266 81,309 +9.8% Administrative expenses (69,121) (64,099) despite cost pressures (2016: 78.1%). Inflationary pressures mitigated • EBITDA 25,636 22,161 through purchasing efficiencies +15.8% EBITDA margin 22.4% 21.3% and economies of scale. Operating profit 20,145 17,210 +17.1% Improvement in EBITDA margin of • 1.1% to 22.4% (2016: 21.3%) through Net finance income / (expense) 8 (6) operational leverage. Profit before income tax 20,153 17,204 +17.1% Income tax expense (3,789) (3,469) Profit before tax up £3.0m or 17.1% • to £20.2m (2016: £17.2m). Profit after tax and total comprehensive income for the year 16,364 13,735 +19.1% attributable to equity holders Tax charge benefits from reduction • in Corporation tax rate. Earnings per share Diluted EPS growth of 19.1% to • Basic earnings per share (pence) 16.36 13.74 +19.1% 16.20 pence per share (2016: 13.60 Diluted earnings per share (pence ) 16.20 13.60 +19.1% pence per share). 2.40 2.00 Final dividend per share (pence) +20.0% 6
EBITDA Analysis Improvement in EBITDA mainly • EBITDA Bridge driven by impact of new store openings 26,000 In year openings contribute 525 224 218 - • 376 278 236 £1.8m 1,499 Prior year openings contribute • £1.5m 24,000 In year closures erode EBITDA • £'000 25,635 by £0.2m 1,794 Tightly controlled purchasing and • production efficiencies offset 22,000 inflationary increases resulting in 22,159 minor gross profit improvement of £0.2m. 20,000 Pay increases of £0.4m partially • 2016 EBITDA New stores openings Full year impact of PY openings Closed stores GP improvements Pay increases Pay rostering Rent & rates increases Other 2017 EBITDA offset by more efficient rostering and small central cost rationalisation. £0.2m increase from rent and • rates reviews. Number of contracts for non- • direct spend renegotiated in year. 7
Group Cash Flow 12 months 12 months ended ended 30 September 30 September 2017 2016 £’000 £’000 Cash flows from operating activities Profit before income tax 20,153 17,204 Highly predictable and resilient • Adjusted by: cash flows to fund ongoing new Depreciation and amortisation 5,491 4,951 Net finance charges in the consolidated statement (8) 6 store rollout programme. of comprehensive income Other non-cash charges 317 333 Operating cash flow of £24.4m up • 10.9% with free cash flows of Changes in working capital (1,591) (536) £11.0m Cash generated from operations 24,362 21,958 Excellent EBITDA to cash Net interest received / (paid) 8 (6) • Income tax paid (3,962) (3,378) conversion rate of 95% Net cash generated from operating activities 20,408 18,574 Investing cash flows includes • Net cash used in investing activities (9,381) (8,726) capital investment in the year of Net cash generated used in financing activities (2,775) (2,670) £8.6m in new stores, estate refresh and central infrastructure. Net increase in cash and cash equivalents 8,252 7,178 Cash and cash equivalents at the beginning of the Dividends of £3.2m paid in the • 13,273 6,095 year year with £0.4m received from exercise of employee share Cash and cash equivalents at the end of the year 21,525 13,273 options. 8
Group Balance Sheet At 30 At 30 September September 2017 2016 £’000 £’000 ASSETS Non-current assets Intangible assets 17,747 17,797 Strong balance sheet maintained • Property, plant and equipment 39,674 36,498 solely funded by equity and 57,421 54,295 reserves – no external Current assets borrowings. Trade and other receivables including 13,995 12,900 prepayment Inventories 5,980 4,862 Cash and cash equivalents 21,525 13,273 Cash balance at year end of 41,500 31,035 • £21.5m - well positioned to self- Total assets 98,921 85,330 fund ongoing roll-out programme and acquisitions. EQUITY AND LIABILITIES Total equity 92,332 78,195 Store ROI measured against a 24 • Non-current liabilities Deferred tax 1,422 2,054 month payback period with the majority of stores performing 1,422 2,054 within this target. Current liabilities Trade and other payables 5,167 5,081 Total liabilities 6,589 7,135 Final dividend of 2.40 pence per 98,921 85,330 • Total equity and liabilities share proposed (total of £2.4m). 9
OPERATIONAL PROGRESS 10
Store Roll Out 20 new stores opened in the year • with a number of strong profit contributors. All new stores profitable from • opening and funded from operating cashflows. Expansion outside England • continues: Two new stores opened in • Republic of Ireland Second store opened in Northern • Ireland Two new stores opened in • Scotland bringing total to 12 New geographical locations include: • Dundee Northampton • • Middlesbrough Winchester • • Huddersfield Southport • • The Lexicon - Bracknell Ashford Stevenage • • Blanchardstown Bracknell • • Dublin Guildford • • 11
Store Roll Out (continued) Three retail park openings at • McArthur Glen Ashford, Rushden Lakes Northampton and The Lexicon Bracknell. Retail park locations continue to deliver strong results. Seven openings within • Debenhams stores in the year bringing total to 16. The arrangement enables entry to high streets on favourable rent Dublin McArthur Glenn Ashford terms. First store opened under the • Philpotts brand at Spinningfields Manchester. Excellent trading to date indicates roll-out potential. Northern Ireland and Republic • Philpotts Manchester Rushden Lakes of Ireland stores trading ahead Spinningfields Northampton of expectations. 12
Sainsbury’s Trial In April, launched a • supply only trial with Sainsbury’s. Product being sold • within Sainsbury’s bakery department from Patisserie Valerie branded counters. Currently trading • from 31 Sainsbury’s stores and online via “click and collect”. 13
E-Commerce Member / Followers 2017 2016 Growth % Digital sales up 26% to £4.8m • (2016: £3.8m). 404,300 361,300 43,000 11.9% Continuous growth in Cake • Club membership and social media followers. 140,300 70,000 70,300 100.4% Facebook members up over • 100% due to customer engagement strategy Facebook engagement ratio • highest of our competitors 24,900 15,900 9,000 56.6% Create-a-cake still best selling • online product 19,200 12,900 6,300 48.8% 14
Website Relaunch New website in development • which is to be launched in H1 2018 Enhanced content will improve • user experience Simpler navigation • Tablet and mobile compatible • New product video imaging • Improved payment gateway • 15
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