Nightcap – ongoing rail strikes lead to H1 lfl decrease of 5.8%: Nightcap – the owner of The Cocktail Club, the Adventure Bar Group and the Barrio Familia group of bars – has reported a 5.8% like-for-like revenue decrease in the 26 weeks to 1 January 2023, “largely due to the ongoing rail strikes”. The company said: “Management estimates that the 13 rail strike days over the half year will have cost the company approximately £1.2m in Ebitda as a consequence of the deliberate targeting of mainly Thursdays and Saturdays as strike days, two of the three most lucrative weekly trading days for the company and the hospitality industry as a whole.” During the half year, the group said revenues increased by 48.7% to £23.5m (2021: £15.8m). It said this represented a like-for-like revenue increase of 4.7% for Q2 FY2023 against Q2 FY2022 and a 10.1% increase for H1 FY2023 against the equivalent period in FY2019. It reported a pre-tax loss of £900,000 for the period (2021: £500,000). It said: “The board considers that the 10.1% increase in like-for-like trading against FY2019, across the businesses acquired since 2021, demonstrates the successful implementation of the company’s strategy to acquire drinks-led hospitality groups that are considered to have significant potential for additional value creation through roll-out and efficiency savings. As well as rapid, sustainable growth, we continue to focus on our profit conversion, and in this respect, we are delighted to report a strong Adjusted Ebitda of £4.1m for the half year. Whilst this is an increase of over 25% on the comparable period in 2021, we estimate that the rail strikes had an impact of approximately £1.2m on the business at the Ebitda level during the half year. Through very strong Q2 FY2023 trading, led by Christmas, we saw, for the first time, the underlying long-term potential of the group’s portfolio of 36 bars. We achieved a 60.9% increase in revenue compared to Q2 FY2022 and a 4.7% increase on a like-for-like basis and delivered a Christmas trading period exceeding expectations with a record amount of corporate Christmas parties, pre-sold events and New Year’s Eve almost entirely sold out across all bars.” The company said that 30 bars traded throughout the half year period, with 36 bars being operated at the end of the half year period, reflecting the openings of six new sites – two The Cocktail Club bars, two Tonight Josephine venues and two Barrio bars during September and October 2022. It said that Christmas trading period “exceeded expectations with record amount of corporate Christmas parties, pre-sold events and New Year’s Eve almost entirely sold out across all bars”. The company said: “13 new sites have traded on average just over six months at the end of the period, with an early trading and maturity profile that puts them on track to deliver the group’s target of 75% annual return on investment (ROI) on total capital invested in new bars in their third year of operation. Several sites are on track to beat the 75% ROI target in their first year of operation.” As at 1 January 2023, the group’s net debt was £4.1m with £750,000 of the group’s total bank debt scheduled for repayment during FY2023. The business said it continues to see “extremely attractive opportunities within the property market” and look forward to the ongoing roll-out of all of its key brands. It said that trading has “remained resilient” since the start of 2023. It said: “The group continues to trade in line with market expectations and the outlook is encouraging. Board welcomes potential resolution regarding rail strikes, although is conscious of the impact that further rail strikes could have.” Sarah Willingham, chief executive of Nightcap, said: “Nightcap has had a fantastic half year. Our incredible team opened six bars in six weeks across the country, whilst also delivering a Christmas that exceeded expectations and records in terms of corporate parties, pre-sold events and a nearly sold out New Year’s Eve across all 36 sites. The new sites have opened well with trading continuing to build week-on-week all the way through to the end of February 2023. Whilst rapidly building the leading premium bar group in the UK in a very attractive market for property deals, we continue our focus on strong cost controls, proven by our impressive cash generation of £4.1m from operations during the period thanks to the unwavering dedication of our talented and highly motivated team. We look forward to the second half of the year with confidence and once again we thank our customers for coming to our sites and enjoying themselves with friends in a fun, relaxed party atmosphere and leaving knowing they have had a night to remember.”
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Confidence rises with signs of business activity increasing: Business confidence in Britain is rising, the latest economic surveys suggest. The Times reports that with expectations of future activity picking up sharply from a record low in October in the wake of the ill-fated Truss/Kwarteng administration and its much-criticised mini-budget, a survey by Accenture and S&P Global, the corporate advisers, has found that business confidence is at its highest level since the Russian invasion of Ukraine 12 months ago. The survey found that a positive 43% net balance of manufacturing and services sector companies expect activity to increase over the next 12 months. That is nearly double the level of the optimism in a similar survey of their eurozone peers. Hospitality firms have registered positive sentiment for the first time in a year. The survey reports fewer British companies predicting an increase in their output prices. The easing of price pressures and an improved demand outlook indicate that companies are hopeful of boosting their profits over the next 12 months. Businesses also signal greater optimism towards hiring. However, predictions for capital expenditure and research and development plans are less encouraging. The newspaper says that a separate survey from BDO, the accounting group, tells a similar story of optimism on output and employment prospects, but it warns of continuing fears of heightened inflation and the drag that imposes on the economy. In BDO’s indices, a mark above 95 indicates economic expansion; one below 95 suggests a contraction. The output figure is at its sharpest monthly rate since January 2022, up 3.18 points at 94.10, while the “optimism” index has risen by 5.48 points to 97.36. Its employment index has been in decline over the winter but it has pepped up marginally to stand at 110.18.
Fever-tree shakes up sales with mixers for cocktails: Fever-Tree will this week add another leg to its business to put some fizz in its sales when it launches its first cocktail mixers. The Times reports that having recently added an adult soft drinks range alongside its classic tonics and other mixers, the company is now launching mixers to add to spirits to create cocktails. The three appearing on supermarket shelves from this week will create a margarita, a mojito and an espresso martini, while a passion fruit martini mixer will appear this summer. To promote the new range, Fever-Tree is investing more than £1m in both on and off trade activations, above the line and at sporting events and festivals this summer. Tim Warrillow, chief executive, told the newspaper that while consumption of cocktails was “skyrocketing” in bars and restaurants, many people were put off from making them at home by the quantity of ingredients required. “Consumers no longer have to squeeze copious amounts of limes or buy niche liqueurs and syrups that end up being half used and gathering dust in the back of a cupboard,” he said. The new mixers, which are also being launched in the US, will initially be sold in Sainsbury’s and Waitrose stores and on Ocado at a recommended retail price of £4.50. In the on-trade, they will be sold in Mitchells & Butlers brands such as All Bar One, and later this year they will be distributed throughout Fever-Tree’s international operations.
