Fri 6th Oct 2023 - Exclusive: Five Guys UK FY turnover tops £278m, continues to believe there is ‘strong growth prospects’ here Exclusive – Five Guys UK FY turnover tops £278m, continues to believe there is ‘strong growth prospects’ here: Better burger brand Five Guys saw its turnover in the UK for the year to 31 December 2022 increase 17% to £278.6m (2021: £237.3m) reflecting an “increase in store count and like-for-like growth”. The company, which opened 20 sites during the period and closed one taking its estate to 155 sites, said it believed that there are “strong growth prospects in the premium burger market and intend to continue the roll out of Five Guys in the UK”. The company said: “While there was some effect of covid at the start of the year the impact was significantly reduced compared with 2021. The company benefited from the temporary reduction in VAT rate from 20% to 5% during 1 January 2021 to 30 September 2021 and to 12.5% during 1 October 2021 to 31 March 2022. In 2022 the UK experienced higher inflation than had been seen in recent years and, whilst the company was not completely immune to this, we were able to manage our cost base effectively and implement modest price increases to offset the impact of rising input costs. Operating profit decreased to £30.7m (2021: £50.9m) with the reduction reflecting the reduced benefit from VAT rates. The company reported a profit after tax of £8.7m (2021: £26.2m).” The business saw pre-tax profit for the year decline from £33.58m to £11.57m. At the end of the year, the company employed 4,900 people (2021: 3,940). The group’s parent company – Five Guys European Holdings – operated 242 sites across the UK, France, Spain and Germany, at the end of the period. Revenue for this wider group increased in the year by 31.7% to £452.4m (2021: £343.4m). Operating profit for the year was £17.6m (2021: £24.6m) with the reduction reflecting the “reduced benefit from UK VAT rates, partly offset by stronger trading as conditions improved as the covid pandemic came to an end”. In 2022, 34 new stores were opened and one was closed across its entire estate. The wider group had £127.3m bank debt at the end of the year, of which £117.6m is maturing on 20 June 2024 and £9.7m is repayable in instalments up until 2026. The group had £246.3m of investor loans at the end of the year maturing in June 2028. The wider group saw its pre-tax losses widen to £35.7m (2021: £23.77m). It said it was in a “net liability position due to historic start-up losses and the nature of its operations”. The company said: “The group is now generating strong operating cash flows and it continues to invest in new store openings.” In June, John Eckbert, chief executive of Five Guys UK, told Propel the business sees scope for a further 150 sites here, and that a transport hub opening is the “last boundary that lies ahead” for the brand. Eckbert said the British business had “exceeded expectations” and is now looking at opening sites in airports and train stations. He said: “We hired a data algorithm company, and it told us five years ago that we probably had another 70 sites that we could build here. We have now built those 70 sites and now it tells us there's another 150 sites that we could build. In fairness to it, we’ve proven new markets in those secondary stores – for example, we have opened up into retail parks. Teesside, where our debut, and so far, only drive-thru site is, is a single data point. If that’s a single data point for what drive-thrus can be, that’s a whole other white space to colour in.” It recently opened its second drive-thru in the UK, near Bury St Edmunds. The now circa 160-strong UK business opened the site in Barton Mills, near Mildenhall, with a restaurant site on the former Handmade Burger Co unit in The Waterfront scheme, Lincoln, opening on the same day. Five Guys features in the Propel Turnover & Profits Blue Book, the next edition of which will be released to Premium subscribers next Friday (13 October). Five Guys’ UK turnover of £278.6m is the 34th highest in the database. The Blue Book ranks companies by turnover, profit and profit conversion, listing directors’ earnings for the past five years. Companies can now have an unlimited number of people receive access to Propel Premium for a year for £995 plus VAT – whether they are an operator or a supplier. The single subscription rate is £495 plus VAT for operators and £595 plus VAT for suppliers. Email jo.charity@propelinfo.com to upgrade your subscription.