Prezzo has released Preliminary results for the 52 weeks ended 29 December 2013, with Michael Carlton, Chairman reporting steady progress and strong results, and anticipating 25 to 30 new openings this year.
Highlights
- Revenue up 15% to £166.5 million (2012 – £144.5 million)
- Adjusted* EBITDA up 13% to £28.9 million (2012 – £25.5 million)
- Adjusted* pre-tax profit up 11% to £20.4 million (2012 – £18.3 million)
- Statutory pre-tax profit of £18.4 million (2012 – £17.3 million)
- Adjusted* diluted EPS up 16% to 6.85 pence (2012 – 5.90 pence)
- Diluted EPS is 6.15 pence (2012 – 5.58 pence)
- Proposed final dividend raised 13% to 0.310 pence per share (2012 – 0.275 pence per share)
- 28 restaurants (2012 – 31) launched during the period
- Currently 238 restaurants trading
* excluding the impact of a £1.9 million (2012 – £0.9 million) charge for non-trading items
Michael Carlton, Chairman commented in his accompanying Statement
I am delighted to report another set of strong results for the 52 weeks ending 29 December 2013. Steady progress over the second half of the year, together with a number of successful new openings has enabled us to extend our record of double- digit growth with adjusted* pre-tax profits up 11% to £20.4m (2012 – £18.3m).
Results
For the 52 weeks ended 29 December 2013, revenues increased 15% to £166.5m (2012 – £144.5m) and gross or restaurant profit increased 11% to £23.2m (2012 – £20.9m).
Adjusted EBITDA increased 13% from £25.5m to £28.9m and adjusted operating profit excluding non-trading items increased by 11% from £18.3m to £20.4m.
Adjusted pre-tax profit increased by 11% to £20.4m (2012 – £18.3m) and after a £1.9m (2012 – £0.9m) charge for non-trading items stated pre-tax profit was £18.4m (2012 – £17.3m)
The effective tax rate for the period has been calculated at 22% (2012 – 25%). Adjusted diluted earnings per share were up 16% to 6.85p (2012 – 5.90p) and diluted earnings per share were 6.15p (2012 – 5.58p).
Estate development
We opened 28 new restaurants in 2013 (2012 – 31) and closed one unit (2012 – two) and therefore there were 237 (2012 – 210) restaurants at the end of the period. This included 194 trading as Prezzo, 37 Chimichanga restaurants and four units trading as Cleaver, a new concept which we launched in summer 2013.
These openings provided us with our first representation in major population centres such as Belfast and Leeds, together with additional sites in Bath, Oxford and Glasgow. We also continue to open in successful leisure and retail developments such as the Whiteley Shopping Centre in Hampshire, Gloucester Quays and Bicester and in small provincial towns such as Rayleigh, Felixstowe and Kettering. This wide range of locations into which our brands can be introduced is one of the key strengths of our business.
Summer 2013 saw us launch a new concept in Cleaver which offers high quality, home-reared chicken, ribs and burgers from our open grill kitchen. Our first opening was in Cobham, in Surrey and this has been followed by three more units in Leatherhead, Wokingham and Oxford which together provide us with a test-bed for further development and refinement of the brand. Early signs and initial sales have however been encouraging.
Property pipeline
So far this year, we have opened one additional new restaurant in Ripon and we are also on site in a further six locations. Our property pipeline for 2014 is well-advanced and plans for 2015 and beyond are also taking shape. Once again, we would anticipate opening 25-30 new restaurants by the end of the year.
Cash flows and financing
Cashflow from operations was broadly in line at £30.8m (2012 – £31.3m) and after making corporation tax payments of £3.9m (2012 – £4.2m), there was £26.9m (2012 – £27.2m) available for investment or financing.
During the year the cash outflow on property, plant and equipment was £26.1m (2012 – £24.1m), which covered capital expenditure for the fit out of new restaurants, as well as refurbishment and rebranding projects for the existing estate. This also included the purchase of one freehold property at a cost of £1.2m and we sold one leasehold site for cash proceeds of £0.1m (2012 – sold one freehold and three leaseholds for £1.4m).
Overall there was a net cash inflow of £1.5m (2012 – £4.3m) and at 29 December net cash on the balance sheet had risen to £5.8m (2012 – £4.4m).
Once again, 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 and funds to comfortably fund our anticipated expansion plans for the foreseeable future.
Outlook
Finally, there are indications that the vital signs of the UK economy are improving, and therefore having delivered a continuous record of growth throughout its recent period of difficulties, there is every reason to be positive about our future performance. We have enjoyed an encouraging start to the year and with a strong site pipeline in place, the Board is confident of further success in 2014.