Patisserie Holdings: Interim results for the first half 2018

Birmingham / UK. (rcp) Patisserie Holdings PLC, the leading UK branded café and casual dining group, reports its interim results for the six months ended 31 March 2018.

Financial Summary

(six months ended …) 2018-03-31 2017-03-31 Change
Revenue 60.5 million GBP 55.5 million GBP 9.1 percent
Gross profit 47.1 million GBP 43.3 million GBP 8.7 percent
Ebitda(*) 13.6 million GBP 12.2 million GBP 11.6 percent
Pre-tax profit 11.1 million GBP 9.7 million GBP 14.2 percent
Basic earnings per share 8.98 Pence 7.95 Pence 13.0 percent
Diluted earnings per share 8.92 Pence 7.88 Pence 13.2 percent
Interim dividend per share 1.44 Pence 1.20 Pence 20.0 percent

(*)Ebitda is calculated as operating profit before depreciation and amortisation.


  • Group revenue of 60.5 million GBP up by 9.1 percent (2017: 55.5 million GBP)
  • Gross profit of 47.1 million GBP up by 8.7 percent (2017: 43.3 million GBP)
    • Gross margin of 77.8 percent (2017: 78.0 percent)
  • Ebitda of 13.6 million GBP up by 11.6 percent (2017: 12.2 million GBP)
    • Ebitda margin of 22.5 percent (2017: 22.0 percent)
  • Pre-tax profit of 11.1 million GBP up by 14.2 percent (2017: 9.7 million GBP)
  • Operating cash flows of 11.9 million GBP (2017: 9.3 million GBP) with Ebitda cash conversion of 108 percent (2017: 96 percent)
  • Strong balance sheet position with net cash of 28.8 million GBP (2017: 16.2 million GBP)
  • 10 new stores opened to date all funded from operating cash flow with a strong pipeline
  • Trading from 206 stores
  • Diluted earnings per share of 8.92 Pence up by 13.2 percent (2017: 7.88 Pence)
  • Interim dividend up 20 percent to 1.44 Pence per share (2017: 1.20 Pence per share)

Luke Johnson, Executive Chairman, said: «The group has delivered a strong set of results in a sector which has well documented challenges. Our vertically integrated and flexible business model enables us to deliver consistent profits with our affordable treats remaining popular with our very diverse customer base. We remain focused on organic growth and with a strong balance sheet continue to assess acquisition opportunities which will have a strategic and cultural fit».

Chief Executive’s Review – Results

I am delighted to announce our interim results for the six months ended 31 March 2018, during which we continued to deliver growth in revenues and profit.

Revenue for the period was 60.5 million GBP, an increase of 5.0 million GBP or 9.1 percent (2017: 55.5 million GBP). Revenue from our largest brand, Patisserie Valerie, was up 5.4 million GBP or 13.2 percent to 45.8 million GBP (2017: 40.4 million GBP). Due to a store closure in the prior year, revenue from our other brands was down 0.3 million GBP or 2.6 percent to 14.7 million GBP (2017: 15.1 million GBP).

Ebitda for the period was 13.6 million GBP, an increase of 1.4 million GBP or 11.6 percent (2017: 12.2 million GBP) and pre-tax profit was 11.1 million GBP, an increase of 1.4 million GBP or 14.2 percent (2017: 9.7 million GBP).

Basic earnings per share were 8.98 Pence per share (2017: 7.95 Pence per share) and diluted earnings per share were 8.92 Pence per share (2017: 7.88 Pence per share), an increase of 13.0 percent and 13.2 percent respectively.

The period started well with a good build up to Christmas with our new festive range, including the limited edition Reindeer slice, selling well. Sales were slightly hampered by the adverse weather conditions. However thanks to our vertically integrated supply chain and the flexibility of our workforce we were able to limit the impact on profit. We finished the period strongly with a record Mother’s Day weekend and a good lead up to Easter.

The group achieved strong sales from our website of 2.6 million GBP in the period, up 1.0 million GBP or 62.5 percent (2017: 1.6 million GBP). This was driven by our social media strategy and the relaunch of our website in February 2018, which provides customers with an enhanced user experience, including video imaging of our products, tablet/mobile compatibility and a streamlined checkout process. The revamped website is proving successful.

We established a new product development team towards the end of the prior year and are currently trialling a number of initiatives in selected stores including a new menu, a new savoury range and in store bake-off of morning goods. In January we also launched Slice of the Month which is proving popular. All of these new product initiatives are helping to drive incremental sales.

Our partnership with Sainsbury’s continues. We have a supply only agreement for a limited Patisserie Valerie range to be sold at Patisserie Valerie branded counters within Sainsbury’s stores. We currently have counters in 31 Sainsbury’s stores in addition to 14 click and collect locations. We will shortly be entering a further 10 Sainsbury’s stores.

We continue to work hard to control our gross profit margin which remained at 77.8 percent (2017: 78.0 percent). We benefited in the period from a number of contract renegotiations, and in some cases we switched suppliers to mitigate inflationary pressures, along with production efficiencies from investment in our bakeries in the prior year. We remain proactive in managing our cost base and in some cases we have seen a reduction in some of our core ingredient prices.

Labour inflation now has the biggest impact on profit with National Minimum Wage, National Living Wage and Apprenticeship Levy costing an additional 0.3 million GBP in the period. Ongoing labour inflation is built into our budgets and is being absorbed as the group continues to grow. Staff retention and wellbeing is a key area of strategic focus for us and we are investing in training, rewards schemes and career planning for our employees.

Rent and rates reviews added 0.2 million GBP of cost in the period and we have now had rent reviews at all of our key sites. We also made a number of smaller savings on various non-direct spends which had a cumulative positive impact of 0.4 million GBP.

Estate Development

We have successfully opened 10 new stores to date and are on track to deliver the Board’s annual target of 20 new openings.

The openings included five new geographical locations at Basingstoke, Wigan, Cwmbran, Chesterfield and Carlisle. In addition we opened new stores in Glasgow, Liverpool, Cardiff, Milton Keynes and Sutton Coldfield.

The new store in Glasgow is our 13th store in Scotland and the addition of stores in Cwmbran and Cardiff takes the number of stores in Wales to four.

Our new openings are performing in line with management’s expectations.

We currently have builders on site in three locations; Lancaster, Battersea and Belfast Forestside. These stores are expected to be open by the end of May 2018. The Belfast Forestside opening will be our fifth store in Ireland and will be serviced from our bakery in Belfast. All of the Irish stores continue to perform strongly and provide management with growing confidence in the prospects for the region.

In the period we closed two stores following lease expiries and we exited one concession arrangement.

All of our new openings are profitable from the first week of trading and are all funded from operating cash flows. We have an exciting pipeline which is well developed.

We remain confident in our ability to grow our estate and continue to believe that there is a large addressable market in the UK and Ireland.

Cash flow + Financing

In the period we generated operating cash flows of 14.7 million GBP, up 2.9 million GBP or 24.9 percent (2017: 11.7 million GBP). We paid 2.8 million GBP in corporation tax and spent 5.0 million GBP in capex on our estate leaving free cash flows of 6.8 million GBP, up 1.9 million GBP or 40.0 percent (2017: 4.9 million GBP). We returned 2.4 million GBP to shareholders in dividend payments and generated 2.9 million GBP of proceeds from the exercise of employee share options resulting in net cash at the end of the period of 28.8 million GBP (2017: 16.2 million GBP).

Our experienced Estates team continues to deliver high quality new stores at an average expenditure of 0.25 million GBP per site, which continue to deliver payback in less than 24 months.

The final dividend for the year ended 30 September 2017 of 2.4 Pence per share or 2.4 million GBP in total was paid to shareholders in the period. The Group remains cash generative and the Board has declared an interim dividend for this financial year of 1.44 Pence per share representing a 20 percent increase year on year. The interim dividend will be paid on 13 July 2018 to shareholders on the register at the close of business on 1 June 2018.

Our business model converts profit to cash efficiently and delivers consistent and predictable cash flows. The Group continues to be funded from operating cash flows and reserves, and with a cash balance of 28.8 million GBP at the period end, is well positioned to make strategic acquisitions should appropriate opportunities arise.

Current trading and outlook

Trading after the period end is in line with management’s expectations. We have just launched our new summer menu which includes a new range of ice creams and iced lattes. Three new stores are due to open shortly and with a well-developed new store pipeline I am confident of a good second half to the year.

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