Sat 18th May 2024 - Exclusive: Big Table Group FY sales up 10%, seeing ‘great results’ from acquisitions, remains interested in opportunities Exclusive – Big Table Group FY sales up 10%, seeing ‘great results’ from Banana Tree and TRG Leisure acquisition, remains interested in acquisition opportunities: The Big Table Group – the operator of Las Iguanas, Banana Tree, Café Rouge and Bella Italia – has reported a 10% increase in sales to £223.2m in the year to 30 October 2023 and said that it was presently “seeing great results from both the continued growth of the Banana Tree brand as well as the recent TRG Leisure acquisition”. For the year to 30 October, the business, which operated 158 sites at the period end, reported group Ebitda of £12.9m, which the company said was “extremely encouraging” and reflected a 45% increase versus the prior year (£8.9m), when adjusted for the prior year VAT benefit. It said: “This improvement is significant given the FY23 results also include the impact of £3.4m additional energy costs.” Full year turnover was £223,189,000 (2022: £206,170,000), up 10% on the prior year, when adjusted for the prior year VAT benefit. Pre-tax loss stood at £7,878,000 (2022: pre-tax loss of £2,956,000). Gross profit margin was 42.6%, which was 2.2% points ahead of prior year and “reflects the ongoing focus of the group in mitigating inflation, optimising the cost base and ensuring that operations and ways of working drive a stronger economic model”. The Epiris-backed business said: “The strong results demonstrate the resilience of The Big Table Group within the wider casual dining sector, which continues to be challenged by the impact of cost of living on consumer visits and spend. The group also benefits from having no bank debt, and therefore is not exposed to the increasing costs of debt that other operators in the sector may be facing. The biggest challenge to the sector was rising inflation which had commenced during 2022 but which had greater impact in 2023. The cost of food, beverage, energy and various other cost lines rose materially, which required the group to proactively respond and mitigate. The success of this strategy meant that restaurants were able to mitigate inflation without simply passing on the rising costs to guests, which is important when consumers are facing the same cost challenges.” The company invested more than £3.8m on development capital expenditure during the year, which included new sites, brand conversions and refurbishments. It opened two new Las Iguanas sites and completed six Banana Tree conversions. It also closed seven restaurants – four Café Rouges, two Bella Italias and its lone Mulberry site. The company, which operated 158 restaurants across the UK at October 2023, employing more than 4,000 people and serving over 11 million guests each year, acquired the then nine-strong Banana Tree brand in September 2021 and has since grown it to 20 sites. At the end of October last year, it completed the deal for the 75-strong TRG leisure division, which includes Frankie & Benny’s and Chiquito, at the end of October, for £1, with The Restaurant Group paying a cash contribution of £7.5m. Also included in the division are the Firejacks, Coast To Coast, Filling Station and EST brands, plus a number of delivery-only brands. On the TRG Leisure division acquisition, it said: “There is a profit conversion differential to our existing sites, which provides an opportunity to improve profitability of the acquired sites. Our success over the last two years in existing sites provides a solid playbook for delivering significant improvements on cost base inflation and labour management improvements in the newly acquired sites. With the first few periods of trading, we have already seen material green shoot opportunities. In addition to material growth opportunities within those sites, we also think there may be some sites that may suit other brands within the group, and so we expect to test several conversions during the year ahead.” Big Table Group chief executive Alan Morgan told Propel: “Our strengthened trading performance and strong economic model, together with the recent acquisition of 75 additional sites, provides a great platform for growth in 2024 and beyond. Our portfolio of brands targets wide demographics, which together with our national geographic spread, provides a balanced estate that is not overly concentrated or dependent on a particular market or geography. While there will remain some level of sector headwinds, we remain confident that we will successfully navigate the year ahead. Encouragingly, we are already seeing great results from both the continued growth of the Banana Tree brand as well as the recent TRG Leisure acquisition.” On current trading, Morgan told Propel: “Overall, there is still a softening in the market, but the benefit we have at The Big Table Group having a broad portfolio of brands is that when some of the brands are more challenged, we have others who perform well.” In terms of what brands are leading the way at present, he said: “I’m really pleased with Bella Italia’s current performance and Banana Tree is performing exceptionally well as it continues to deliver some really strong sales across both the original and new sites.” He said the company expects to do a few more conversions between its own brands this year. He said: “In addition, we will have at least one new Las Iguanas opening towards the end of the year, as well as a few new Banana Tree sites across the next 12 months.” On the TRG Leisure division, Morgan said: “The division is trading broadly in line with when it came across to us just over six months ago – i.e. like-for-like sales not quite yet where we want them to be. However, we’re seeing signs of improvement in some areas and the profitability of the business has dramatically improved in a short space of time, now making a material contribution to the overall group profit.” Morgan reiterated that the business is in “no hurry to make any big decisions on specific brands in the division”. He said: “Our focus has been on improving the profitability of the Leisure division and this has seen great improvements. That said, we saw an opportunity with our Chiquito restaurant in Bolton to test a conversion to Las Iguanas, which has some elements of the latest thinking for the Las Iguanas brand (which can also be seen in Brindley Place, Brighton and Arcadian). This opened today (18 May) and we’re excited to see how that performs. We are also expecting to convert one of the single brands to a Banana Tree in the next couple of months.” Earlier this year, the business ran a short-term pop-up in London’s Victoria trialling fast-casual versions of some of its brands. Morgan said: “We had some great learnings from our fast-casual trial, many of which have helped with some of our core dine-in and delivery brand improvements. The learnings from the trial have also helped us with any potential acquisitions we review, but for the moment it’s not something we’re putting any further focus on from a development perspective. But that could change.” One of the concepts included in the trial was the group’s delivery brand Super Nonna, on which Morgan said: “It’s doing okay. We are implementing some new menu improvements and it remains a core part of our delivery offer. However, there are some great delivery brands that came to us from the TRG Leisure business, some of which are performing even better (Bird Box and Kick Ass Burrito in particular) so our recent focus has been on getting these brands into more of our restaurants across the estate.” On whether the business was looking at making further acquisitions to enhance its brand portfolio, he told Propel: “We have been reviewing (and will continue to review) many opportunities as they come up and I’m definitely interested in the right opportunity. We’re certainly seeing more of these come to market, but they are not necessarily all attractive, or right for us.” Big Table Group features in the Propel Turnover & Profits Blue Book. It’s turnover of £206,170,246 for the year to 30 October 2022 is the 46th 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 kai.kirkman@propelinfo.com to upgrade your subscription.