Wahaca completes refinancing, provides a strong platform for the business to develop and grow: Mexican-inspired restaurant group Wahaca has completed refinancing, which it told Propel provided “a strong platform for the business to develop and grow”. The business was responding to a report in the Sunday Times that highlighted a note in its full-year accounts for the year to 25 June 2023 warning that it was “plausible” that it might not have been able to refinance its debt. Wahaca co-founder Mark Selby told Propel: “The misleading article in the Sunday Times was published without including a response from Wahaca. Commentary was requested by the journalist and provided by the business, but not included within the article. At the time of submitting its accounts for the year ending June 2023, the business was in the process of finalising the refinancing of its existing facilities – a standard process which is subsequently complete, providing a strong platform for the business to develop and grow. We remain very pleased with how the business is continuing to perform even allowing for the cost inflation driven by the impact of the war in Ukraine and the cost-of-living crisis in the UK, the group has had a very successful year and continues to maintain a very healthy cash balance. The love and recognition for Wahaca as a brand remains very strong among consumers, with awareness continuing to grow in 2024 further to being named the UK’s most sustainable restaurant by Which? Magazine and with the opening of our Paddington restaurant on the near horizon. We are confident that all the good work the team has put into our food and drinks, into our people and their happiness and development and the overall guest experience stands us in very good stead for the year ahead.” The business will return to the expansion trail at the end of this month, with an opening in London’s Paddington. The new restaurant will be the group’s first opening under the Wahaca brand since 2018, and its 14th overall. The 150-cover site will be located at the heart of Paddington Square, a new dining destination integrated with Paddington Station. For the year to 25 June 2023, the company posted turnover of £39,718,000 (2022: £39,214,000), with a gross profit margin of 45.3% (2022: 50.9%). Adjusted operating profit was £3.1m (2022: £5.7m), while it posted a pre-tax loss of £720,000 (2022: pre-tax profit of £3,020,000). It said: “After allowing for the benefit from reduced VAT rates, the operating performance of the group was in line with prior year and the group continues to maintain a healthy cash balance of £10.7m (2022: £11.7m).” Last September, Selby, co-founder of Wahaca and DF Tacos, told Propel that the opportunity for the business to be the national Mexican brand is still there, and he is excited by the potential of the latter concept. The business currently operates 13 restaurants under its eponymous brand and six DF Tacos sites, including three in Market Halls.
Premium Club members to receive next New Openings Database and videos from Propel Multi-Club Conference this week: The next Propel New Openings Database and the videos from Propel’s March Multi-Club Conference will be sent to Premium Club members on Friday (5 April). The database features openings by casual dining operators such as
Pho, the Vietnamese restaurant group, which is launching sites in London and Norwich. Meanwhile, Japanese-inspired
The Blue Pelican is opening in Deal in Kent and the
Medlock Canteen debuts at the New Jackson scheme, on Manchester’s southern gateway. The database is published on a monthly basis and Premium Club members will also receive a 3,200-word report on the 54 new additions to the database. Premium Club members will also receive all the videos from the Propel Multi-Club Conference at 9am on Friday. They will include
Raja Adil, group chief executive of the Adil Group, talking about building one of the largest family-owned quick service restaurant operators in the UK; and
Sir Tim Martin, founder and chairman of JD Wetherspoon, discussing the current state of the UK pub market and the evolution of its offer. Premium Club members also receive access to five other databases:
the Turnover & Profits Blue Book, the New Openings Database,
the UK Food and Beverage Franchisor Database,
the UK Food and Beverage Franchisee Database and
the Who’s Who of UK Hospitality. Plus, all members will be offered a 20% discount on tickets to five Propel paid-for events – The Excellence in Pub Retailing Conference (14 May), Social Media for Profit (18 July), the Talent and Training Conference (1 October) and Restaurant Marketer and Innovator (two days in January 2025). Operators will also be able to send up to four members of staff to each of our four Multi-Club Conferences for free. Premium Club members receive their daily Propel Info newsletter 11 hours earlier than standard subscribers, at 7pm the evening before. They also receive videos of presentations at eight Propel conference events two weeks after they are held. This represents around 100 videos of industry insight over the course of the year. Premium Club members will be sent a dedicated monthly newsletter that will highlight key updates in the sector and direct subscribers to all the vital content their membership offers. Premium Club members also receive exclusive opinion columns every Friday at 5pm, which include the thoughts of Propel group editor Mark Wingett and a host of industry leaders from across the sector. A Premium Club subscription costs an annual sum of £495 plus VAT for operators and £595 plus VAT for suppliers. Companies can now have an unlimited number of people receive access to Premium Club for a year for £995 plus VAT – whether they are an operator or a supplier.
Email kai.kirkman@propelinfo.com today to sign up.
The Breakfast Club reports return to Ebitda profitability after removing £600,000 from cost base: London operator The Breakfast Club, founded by Jonathan Arana-Morton, reported that a significant Ebida loss in the first six months of its 2023 financial year ending on 31 March 2023, led to a “significant restructure of central costs removing £600,000 from our cost base”. The company added: “The second half of the year from October 2022 onward saw the company return to monthly profitability delivering £438,000 of Ebitda in the last six months of the financial year. The upturn in profitability has continued through the 2024 financial year. We operated 13 sites during the year and since the year-end, the significant improvement in performance has allowed us to successfully open a further two sites, in Covent Garden and Soho. Both sites have started well and we are buoyed by their early success. Post year-end the business decided to sell its site on Battersea Rise. This had been a hugely successful site for the business, but post-covid it failed to return to pre-pandemic sale levels, and we made the decision to sell and re-invest in more central locations. It is the first and only disposal of a site The Breakfast Club has undertaken.” The company opened its first franchise site with SSP at Gatwick airport. “We have two further sites with SSP currently planned which will open in summer 2024,” it added. Turnover increased17% to £18.02m and restaurant Ebitda improved by 10% to £2m. Loss before tax was £1,390,311 compared to £1,272,356 the year before. The company stated: “So whilst the first half of the 2023 financial year may have started out with some considerable challenges, the business has responded and met these challenges well which has led to a significant improvement in financial performance over the last 18 months which has allowed us to expand the business in the 2024 financial year.”
Thornbridge Brewery reports return to positive Ebitda in 2024 after torrid year resulted in a £566,099 loss: Thornbridge Brewery, the award-winning craft brewer based in Bakewell, Derbyshire founded by Jim Harrison and led by Simon Webster, has reported that the eight months to February 2024 saw a return to an Ebitda positive performance and double digit turnover growth. This followed a turbulent year to June 2023 where the company reported a loss of £566,099 (2022: profit of £36,916) on turnover of £14,671,271 down from £15,201,547. Of the 2023 year, the company stated: “As with the whole of the previous year we experienced further significant cost increases for all our key raw materials as inflation hit levels not experienced for more than four decades, with the Consumer Price Index (CPI) peaking at 11.1% in October 2022. The multiple double digit cost increases we suffered for this two-year period on items such as CO2, malt, hops, cardboard, aluminium, glass, transport and many other products which we use for brewing and packaging our beers was significantly higher than the headline figure. Despite this, our GP percentage reduced by less than 1% compared to the previous year due to an improvement in our product mix, as only limited price increases were able to be passed on to customers. Energy prices hit record levels during the financial year and direct costs of powering the brewery increased by a further 28%, following a 72% increase the prior year, becoming the second largest overhead behind personnel costs. As wholesale prices have started to reduce, we are now seeing a reduction in energy costs, which is having a significant positive impact on our profitability. As inflation started to ease during 2023, we undertook a group-wide review project covering every key process and supplier. The project is ongoing, with further savings to come but we have been able to reduce the annual cost of raw materials and other services by more than £400,000 in the period since the year-end. It was a year which saw further big changes in the trading landscape and a general reduction in demand due to the cost-of-living crisis. One of the key negative outcomes was the drive from supermarkets to reduce their craft beer fixtures, replacing them with more mainstream products. To address this shift, we launched a new range of 500ml bottle-conditioned beers, but the timing of these new listings commencing was delayed and the positive impact was not gained until after the year-end. These two facts resulted in a reduction of 25% in our off-trade sales during the year. A 22% growth in the on-trade during the year was unable to fully off-set this, resulting in a small fall in reported turnover compared to the prior year. Post year we have seen further strong growth in the on-trade.” The company reported its Taps subsidiary, running four community pubs in Sheffield and an events bar at Sheffield University, has seen strong, profitable growth during the reporting period and into the current year with a “record profit generated for the first eight months of the current year to date”. The leases on two smaller pubs ended in May and June 2022 and were not renewed.
Brindisa reports turnover up but profit down after margin squeeze: Brindisa, the Spanish restaurant, deli and wholesale company, has reported an increase in turnover but a drop in profit for the year ending 30 June 2023. The company, which operates six restaurants in London and two delis, saw sales increase 6.9% to £25,089,888 whilst profit before tax dropped from £851,325 to £496,494. Ebitda also dropped from £1,052,065 to £677,558. The company stated: “The year under review was characterised by economic instability and a cost of living crisis following a combination of climate shocks and the impact of the pandemic, which disrupted food and energy production and distribution and the global supply chain. Food inflation was one of the largest contributors to the spike in the inflation rate of the period. Despite the pressure on our margins from the increasing cost of our supplies, the business continued to see strong levels of trade for the period with sales growth of 6.9%.” A dividend of £122,000 was paid.
Innventure reports turnover up but profit down: Innventure, the eight-strong gastro-operator led by former Mitchells & Butlers executive Chris Gerard and his wife Fiona, has reported turnover rose 7.13% to £8.21m in the year to 30 June 2023. Profit before tax reduced to £184,801 compared to £389,215 the year before. The company added the eighth business during the year and the site was revenue positive. It added: “Higher operating costs have reduced year on year profits from the extraordinary performance of the prior year. However, it is pleasing to record the recovery of sales levels. A trading environment of increased costs across the line of the profit and loss continues and will be combined with consumer wealth erosion dampening demand. The ability of the company to raise prices sufficiently to compensate for inflation without loss of volume will be a huge challenge in the coming year.” The company has £3,094,765 in profit and loss reserves.
Burger King franchisee reports margin compression from inflationary pressures: Adil Restaurants, which operates Burger King franchisees and a property investment business, has reported turnover dropped to £16,233,541 in the year ended 31 March 2023 from £18,636,186 the year before. Ebitda dropped to £1,468,312 from £3,909,433 the year before. Profit before tax was £1,033,264 compared to £3,448,115 in the year previous. The company stated that the turnover drop was mainly due to the higher VAT applied to sales with “the majority of the stores within the group portfolio performing well with strong sales”. The company added: “The impact of VAT on sales along with inflationary pressures on food, beverages and packing materials haver caused Ebitda to reduce to £1,468,312 (2022: £3,909,433) and gross margins to fall to 62% from 68.21%. Rental income in the year reduced from £658,945 to £377,213. Net assets at the balance sheet date amounted to £20,696,832 (2022: £20,262,462).”
