Preliminary results for the 12 months ended 30 September 2016 - - PowerPoint PPT Presentation

Preliminary results for the 12 months ended 30 September 2016

November 2016

PATISSERIE HOLDINGS PLC

Highlights 2 Financial Performance 4 Operational Progress 10 Current Trading and Outlook 18

Contents

HIGHLIGHTS

3

Full Year to 30 September 2016 - Highlights

• Revenue up 13.3% to £104.1m (2015: £91.9m)
• EBITDA up 18.1% to £22.2m (2015: £18.8m)
• Pre tax profits up 18.2% to £17.2m (2015: £14.6m)
• Diluted EPS growth of 20.1% to 13.60 pence per share

(2015: 11.32 pence per share)

• Operating cash flow of £22.0m, with year end cash

balances of £13.3m

• Final dividend of 2.00 pence per share proposed
• 21 new stores opened all funded from free cash flow
• Flagship stores opened in Belfast, London Oxford

Street and Resorts World Birmingham

• Over £1m invested in new and existing bakery

facilities improving efficiency and increasing capacity

• Significant investment in people with a number of

senior appointments made

FINANCIALS

Financial Overview

DELIVERING STRONG GROWTH AND HIGH LEVELS OF CASH CONVERSION WITH THE ABILITY TO CONTINUE TO SELF-FINANCE NEW STORE ROLLOUT

5

Revenue (£m) Group EBITDA (£m) Cash flow from operations (£m)

42.8 51.3 62.9 73.9 17.3 25.3 29.0 30.2 60.1 76.6 91.9 104.1

• 10

20 30 40 50 60 70 80 90 100 110 FY2013A FY2014A FY2015A FY2016A Patisserie Valerie Other Brands 12.0 15.3 18.8 22.2 20.0% 20.0% 20.4% 21.3%

• 3.0%

6.0% 9.0% 12.0% 15.0% 18.0% 21.0%

• 3

6 9 12 15 18 21 24 FY2013A FY2014A FY2015A FY2016A EBITDA EBITDA margin 10.5 8.4 18.3 22.0 87% 76% 98% 99% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% 90.0% 100.0% 110.0%

• 5

10 15 20 FY2013A FY2014A FY2015A Cash from operations Cash conversion

Year Ended 30 September 2016

Group Income Statement

12 months ended 12 months ended 30 September 2016 30 September 2015 £’000 £’000 Total Total % change Continuing operations Revenue 104,141 91,925 +13.3% Cost of sales (22,832) (20,884) Gross profit 81,309 71,041 +14.5% Administrative expenses (64,099) (56,477) EBITDA 22,161 18,761 +18.1% EBITDA margin 21.3% 20.4% Operating profit 17,210 14,584 +18.2% Finance expense (6) (27) Profit before income tax 17,204 14,557 +18.2% Income tax expense (3,469) (3,152) Profit after tax and total comprehensive income for the year attributable to equity holders 13,735 11,405 +17.0% Earnings per share Basic earnings per share (pence) 13.74 11.41 +20.4% Diluted earnings per share (pence) 13.60 11.32 +20.1%

• Annual revenues exceed £100m for

the first time at £104.1m up £12.2m

• r 13.3% (2015: 91.9m)
• Gross margin of 78.1% (2015:

77.3%) reflecting improvements in supply chain

• Tight cost control resulting in

EBITDA margin of 21.3% (2015: 20.4%)

• Profit before tax up £2.6m or 18.2%

to £17.2m (2015: 14.6m)

• Diluted EPS growth of 20.1% to

13.60 pence per share (2015: 11.32 pence per share)

6

7

EBITDA Analysis

Commentary

• In year store openings contribute

additional £1.6m with full year effect of prior year openings contributing additional £1.5m.

• Key supply chain contracts

renegotiated in year resulting in £1.2m improvement to gross profit or 0.8%.

• Impact of National Living Wage
• f £0.5m however this has been
• ffset by more efficient rostering
• f staff and tight cost control.
• £0.5m increased costs of higher

rents from rent reviews.

22,167 84 456 510 290 1,626 1,496 1,196 426

• 18,762

16,000 18,000 20,000 22,000 24,000 2015 EBITDA New stores openings Full year impact of PY openings Closed stores GP improvements Pay increases Pay rostering Rent increases Other 2016 EBITDA £'000

EBITDA Bridge

8

Group Cash Flow

12 months ended 30 September 12 months ended 30 September 2016 2015 £’000 £’000 Cash flows from operating activities Profit before income tax

17,204

14,557 Adjusted by: Depreciation and amortisation

4,951

4,177 Net finance charges in the consolidated statement

• f comprehensive income

6

27 Other non-cash charges

333

271 Changes in working capital

(536)

(690) Cash generated from operations

21,958

18,342 Interest paid

(6)

(29) Income tax paid

(3,378)

(2,787) Net cash generated from operating activities

18,574

15,526 Net cash used in investing activities

(8,726)

(8,012) Net cash generated used in financing activities

(2,670)

• Net increase in cash and cash equivalents

7,178

7,514 Cash and cash equivalents at the beginning of the year

6,095

(1,419) Cash and cash equivalents at the end of the year

13,273

6,095

• Operating cash flow of £22.0m up

£3.7m.

• Excellent EBITDA to cash

conversion rate of 99%

• Capital expenditure in the year of

£8.7m consisting of £5.6m in new stores, £1.3m in existing estate, £1.2m in bakery facilities and £0.6m on infrastructure.

• Dividends of £2.7m paid in the

year reflecting £1.7m for FY2015 and interim dividend for FY2016

• f £1.0m

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Group Balance Sheet

• Strong balance sheet maintained

solely funded by equity and reserves – no external borrowings.

• Cash balance at year end of

£13.3m - well positioned to self- fund ongoing roll-out programme and acquisitions.

• Final dividend of 2.00 pence per

share (total of £2.0m) proposed.

At 30 At 30 September September 2016 2015 £’000 £’000

ASSETS Non-current assets Intangible assets

17,797 17,847

Property, plant and equipment

36,498 32,679 54,295 50,526

Current assets Trade and other receivables including prepayment

12,900 11,657

Inventories

4,862 4,436

Cash and cash equivalents

13,273 6,095 31,035 22,188

Total assets

85,330 72,714

EQUITY AND LIABILITIES Total equity

78,195 66,698

Non-current liabilities Deferred tax

2,054 1,934 2,054 1,934

Current liabilities Trade and other payables

5,081 4,082

Total liabilities

7,135 6,016

Total equity and liabilities

85,330 72,714

OPERATIONAL PROGRESS

10

Store Roll Out

11

• 21 new stores opened in the year

all funded from operating cash flows

• Formats include:
• Brasserie (5)
• Full Service (10)
• Counter (6)
• Strategically selected new

locations which have favourable rents and strong sales, including:

• Preston
• Durham
• Cheshire Oaks
• Bradford
• Chippenham
• Bury
• Doncaster
• Camberley

Bradford

Store Roll Out (continued)

12

• Expansion outside England

continues with tenth store

• pened in Scotland and first

store opened in Northern Ireland.

• Flagship stores opened in Belfast,

Resorts World Birmingham and London Oxford Street.

• Six Debenhams stores opened in

the year. Arrangement enables entry to high streets on favourable rent terms.

• Two additional motorway service

station stores opened, Cambridge and Peterborough, taking total to four.

Belfast London Oxford Street Resorts World Birmingham Wandsworth

Infrastructure

13

• New stand alone bakery opened in

Leith, Edinburgh to supply stores in Scotland and Northern England

• Belfast store equipped with bakery

to enable expansion in Northern Ireland

• Programme of replacement to

logistics fleet completed

• Number of senior employees

recruited into the business

E-Commerce

14

• Website was relaunched in January 2015

with virtual tours and “create-a-cake” features.

• Online sales up 23% to £3.8m (2015:

£3.1m)

• Social media numbers continue to grow

with Cake Club members up 18% to 361,300 members.

Member Numbers 2016 2015 Growth % Cake Club 361,300 306,000 55,300 18.1% Facebook 70,000 46,800 23,200 49.6% Twitter 15,900 12,800 3,100 24.2% Instagram 12,900 7,700 5,200 67.5%

Product Development

15

• A number of products trialled and

launched in year

• Glorious Gluten Free range launched

following customer demand

• Corporate menu introduced online
• Afternoon Tea now selling in all locations

with a number of variants.

• Festive menu launched in November

including hot drinks, chocolate fudge cake and festive afternoon tea.

Patisserie Holdings remains an attractive equity story

ATTRACTIVE MARKET BACKDROP

• UK eating out market estimated to be worth £70bn+
• Patisserie Valerie is favourably positioned across the two

fastest growing sub-sectors − Coffee shops – forecast CAGR of 10% − Branded casual dining – forecast CAGR of 7%

• Market growth underpinned by long term socio-economic

changes

VERY STRONG PLATFORM ESTABLISHED

• Critical mass already achieved

− trading from 184 stores − EBITDA margins of 21%

• All stores now deliver positive contributions; 60% generate

>£100k EBITDA

• Scalable, hub and spoke model perfected

− further economies of scale available

• Highly experienced management team with proven sector track

record

• Vertically integrated model with fully owned logistics

A PROVEN GROWTH STORY

• Focused on rollout of 20 new sites per annum
• Historic growth has been strong

− number of stores increased from 8 to 184 in 10 years

• 2016 EBITDA £22.2m
• 250+ potential new sites

− formulaic new store model, generating payback of 23 months vs. target 24 months

• Capable of funding new stores through internally generated

cash flow

• Board committed to progressive dividend policy

THE PATISSERIE VALERIE CONCEPT

• A leading UK branded café and casual dining group
• All day trading format and affordable proposition
• Five proven brands
• High quality products, almost all made in-house from scratch
• Very wide customer demographic and appeal
• Proven across different store formats and geographies

16

Existing Estate Growth

17

Organic Growth

• Roll-out programme
• f 20 stores per

annum

• Investment in

existing Estate

Acquisitions

• Review of acquisition
• pportunities which

are earnings accretive to the Group

Infrastructure

• Investing in

infrastructure to support development of the Group

Increase Shareholder Value

CURRENT TRADING AND OUTLOOK

18

Pipeline for the Year Ahead

19

• Strong pipeline for FY2017 with

six openings since the year end:

• Westfield, Shepherd’s Bush
• Belfast
• St Pancras
• Middlesbrough
• Dundee
• Huddersfield
• Exchanged contracts on two sites

and at advanced stage on a further nine sites

Current Trading & Outlook

20

• Good start to 2017 with trading in line with

management expectations

• Six stores opened since the year end
• Well developed store pipeline with 11 sites at

advanced stage.

• Final dividend of 2.0 pence proposed subject

to shareholder approval. “Robust financial position, strong brand and highly cash generative and confident of another successful year of growth”

21