Prezzo has reported strong Preliminary Results for the 52 weeks ended 30 December 2012 with revenue, profit and number of restaurants all increasing, and is ‘confident of further progress in the year ahead’.
Highlights
- Revenue up 17% to £144.5 million (2011 – £123.9 million)
- Adjusted* EBITDA up 16% to £25.5 million (2011 – £22.0 million)
- Adjusted* pre-tax profit up 11% to £18.3 million (2011 – £16.4 million)
- Statutory pre-tax profit of £17.3 million (2011 – £16.1 million)
- Adjusted* diluted EPS up 13% to 5.90 pence (2011 – 5.21 pence)
- Diluted EPS is 5.58 pence (2011 – 5.09 pence)
- Proposed final dividend increased to 0.275 pence per share (2011 – 0.250 pence per share)
- 31 restaurants (2011 – 27) launched during the period
- Currently 211 restaurants trading
* excluding the impact of a £0.9 million (2011 – £0.3 million) charge for non-trading items
Chairman’s statement from Michael Carlton:
I am pleased to report another set of strong results for the 52 weeks ending 30 December 2012. A pick-up in trading following the atypical sporting events of the summer, coupled with the continued momentum of our opening schedule has enabled us to deliver significant growth, with adjusted pre-tax profits up 11% to £18.3m (2011 – £16.4m).
Results
For the 52 weeks ended 30 December 2012, revenues increased 17% to £144.5m (2011 – £123.9m) and gross or restaurant profit increased 12% to £20.9m (2011 – £18.7m).
Adjusted EBITDA increased 16% from £22.0m to £25.5m and adjusted operating profit excluding non-trading items increased by 11% from £16.4m to £18.3m.
Adjusted pre-tax profit increased by 11% to £18.3m (2011 – £16.4m) and after a £0.9m (2011 – £0.3m) charge for non-trading items (see details in note 5) stated pre-tax profit was £17.3m (2011 – £16.1m).
The effective tax rate for the period has been calculated at 25% (2011 – 27%). Adjusted diluted earnings per share were up 13% to 5.90p (2011 – 5.21p) and diluted earnings per share were 5.58p (2011 – 5.09p).
Estate development
We launched 31 (2011 – 27) new restaurants in 2012 (three were leasehold units acquired in December 2011) and two restaurants were closed during the period and so at the end of the period there were 210 (2011 – 184) restaurants in the estate.
These openings included prime city centre locations in London (in the newly refurbished main concourse of Kings Cross Railway Station) as well as Manchester, Bristol and Bath. Other notable successes included Beaconsfield, Marlow, Southport and Chingford.
2012 was an important and successful year for our Chimichanga brand. With increasing confidence in our Mexican offering, we have expanded this concept in a wider range of locations (including Bournemouth, Bromley, Ealing and Bury St Edmunds) and by the end of the year we were trading from 28 units (2011 – 15 units).
So far this year, we have opened our first restaurant in Northern Ireland, in Victoria Square in Belfast, and we are on site in a further eight locations. Our property pipeline for 2013 is largely finalised and plans for 2014 and beyond are also taking shape. As a result we would anticipate opening around 25 new restaurants by the end of the year.
Cash flows and financing
Net cashflow generated from operations was 42% higher at £31.4m (2011 – £22.1m) and at 30 December net cash balances shown on the balance sheet amounted to £4.4m (2011 – £39,000). However, after making December month-end payments of over £5m on 31 December, the underlying increase in cash from operations was more like 19%.
After making payments of £4.2m (2011 – £3.7m) to settle an increasing corporation tax liability, there was some £27.2m (2011 – £18.4m) available for investment or financing.
During the year the cash outflow on property, plant and equipment was £24.1m (2011 – £22.3m), which covered capital expenditure for the fit out of new restaurants, as well as refurbishment and rebranding projects for the existing estate. However, we also sold one freehold and three leasehold properties, realising net cash proceeds of £1.4m (2011 – £488,000) from disposals. (In 2011, there was also a net cash outflow of £1.7m on acquisitions.)
We are comfortable that our continued strong cash generation, together with a modest short-term borrowing facility and a portfolio of readily saleable freehold properties will provide us with sufficient flexibility to comfortably fund our anticipated expansion plans for the foreseeable future.
Dividend
The Board recommends that the final dividend payment for the year is increased by 10% to 0.275p (2011 – 0.250p) per 5p ordinary share. This will be paid on 5 July 2013 to shareholders on the register on 14 June 2013.
Staff
The establishment of the Prezzo Training Academy which provides a wide range of skills and development courses for staff at all levels in the business is a clear sign that we recognise the importance of supporting our key people and helping them to achieve their full potential. Once again, I would like to take the opportunity to thank all our staff for the contribution they made to a very successful 2012.
Outlook
This is the fifth consecutive year that we have entered without a clear conviction that the UK economy can deliver sustained growth on any meaningful scale over the next twelve months. However, Prezzo has prospered during this period of uncertainty and we will continue to drive the business forward, striving for excellence in all that we do.
With a strong development pipeline in place and the prospect of more settled trading patterns over Summer 2013, the Board is confident of further progress in the year ahead.