Wed 26th Nov 2014 - Patisserie Valerie reports 37% increase in pre-tax profit Patisserie Valerie reports 37% increase in pre-tax profit: Patisserie Valerie has reported sales up 27.5% to £76.6m and adjusted pre-tax profit up 37% to £11.3, in its maiden first year results for the 12 months to 30 September 2014. Adjusted Ebitda (£15.3m) was up 27.2%. It reported a 100% increase in online sales to £2.6m (2013: £1.3m). The average store payback period of 23 months is ahead of 24-month target. A total of 19 new stores opened in the year (2013:19). The acquisition of sandwich maker Philpotts (Holdings) Limited in February 2014 added 23 stores to the Group. It had 148 stores at end of year (2013:108), made up of new openings and Philpott’s acquisition. During the year, it opened its first motorway service station at Beaconsfield, retail park stores and a first store in Wales. A total of 20 new stores are targeted for 2015. The company stated: “Trading in the first six weeks of the year has been good and the business continues to perform in line with management’s expectations. Since the year end we have already opened three new stores and the strong pipeline of new sites provides confidence that we can achieve the planned number of stores for the year, all funded from operating cash flows.” Executive chairman Luke Johnson said: “I am pleased to report another excellent performance for Patisserie Holdings in what has been a pivotal year in the development of the Group. The management team has delivered the eighth consecutive year of organic growth, acquired the Philpotts business and in May successfully listed the Company on AIM. Each of our five differentiated brands continues to grow and, with the Group’s strong cash generation funding our future organic growth, we are looking forward to another exciting year in 2015.” Chief executive’s Paul May added: “I am pleased to report our maiden results as a public company for the 12 months ended 30 September 2014, continuing our track record of growth. The Group delivered an increase in revenue of £16.5m or 27.5% to £76.6m (2013: £60.1m). Adjusted EBITDA, adjusted for one-off costs of £0.6m relating to the admission to AIM and £0.3m for the acquisition of Philpotts, was £15.3m, an increase of £3.3m or 27.2% (2013: £12.0m). Adjusted pre-tax profit was £11.3m, an increase of £3.1m or 37% (2013: £8.2m). Statutory pre-tax profit, after the above-mentioned one-off costs, was £10.4m which was £2.2m or 26.8% higher than the previous year (£2013: £8.2m). Adjusted basic earnings per share of 11.41 pence per share was 29.0% up on last year (2013: 8.85 pence per share) and adjusted diluted earnings per share was 11.10 pence per share which was 31.7% higher than last year (2013: 8.43 pence per share). All of our brands performed well in the year, and we are encouraged by the excellent growth in online sales which increased by 100% compared to the prior year. Revenue from our main trading brand, Patisserie Valerie (98 sites), was £51.1m in 2014 compared to £42.4m in 2013, an increase of 20%. Revenue from our two other trading brands which traded for the full 12 months, Druckers (22 sites) and Baker & Spice (4 sites) grew from £16.1m in 2013 to £16.5m in 2014. Flour Power City (1 site), our wholesale bakery acquired in May 2013 is now fully integrated into the Group. Sales improved from £2.4m in 2013 to £2.6m in 2014. The bakery also benefits from having additional production capacity and it is this operational gearing which has helped to control gross profit margins in the Group. These results are particularly pleasing in a year in which we also completed the acquisition of Philpotts and the admission of the Group to AIM. Although our primary strategy remains one of organic growth, we acquired Philpotts (23 sites), a premium sandwich retailer, in February 2014 for a consideration of £6.3m (including £2.2m to settle debt obligations and fees of £0.3m). With our expertise, as we modify the offering and incorporate the Group’s purchasing power, we expect further synergies and gross profit efficiencies as the entity is fully integrated into the Group. With our balance sheet strength we are well positioned to take advantage of future acquisitions opportunistically provided they meet the Group’s store payback period of 24 months. We opened 19 new stores in the year, just short of our target of 20 openings per year. Leases on two stores expired in the year and these sites were closed. One of these was the only loss-making store within the entire estate, inherited as part of an earlier acquisition. This brings the number of stores in our Group to a total of 148, all of which are profitable. The 19 new store openings are a mixture of traditional high-street shops and shopping centre outlets, including our first store in Wales, expanding our geographical presence. We also opened our first motorway service station outlet in Beaconsfield. All of our new stores are delivering a positive contribution. Of the stores opened in FY13, all 19 stores are trading well and the majority have already paid back the capital outlay well ahead of the 24 month target that we set. Encouragingly a number of stores opened in FY14 have also paid back their capital outlay already. We will continue our roll out strategy in 2015 and beyond and will look to open a further 20 stores in the year ending 30 September 2015. Since the year end we have already opened three new stores and are confident that we can achieve the planned number of stores for the year, all to be funded from operating cash flows.”