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Wed 12th Feb 2025 - Update: Bagel Factory in ‘much stronger position’ after completing ‘reset programme’, new store openings drive 57% turnover boost |
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Bagel Factory in ‘much stronger position’ after completing ‘reset programme’, new store openings drive 57% turnover boost as company on track for 40 locations by end of 2025: Bagel Factory, which is owned by Cremonini Group, one of the largest European food operators, has said it is in a “much stronger position” after completing its “reset programme”. It comes as the 34-strong business, which operates a portfolio of company-owned stores alongside its franchise operations, reported that new store openings drove a 57% turnover boost in the year to 31 December 2023, and said it is on track to reach 40 locations by the end of 2025. During the year, the company opened new stores in Ealing Broadway and Westminster tube stations, Luton airport, Southampton’s West Quay shopping centre, and in London’s Covent Garden and Liverpool Street. The business, which was acquired by the Cremonini Group in the summer of 2012, reported turnover of £4,819,529 for the year, up from a restated £3,057,465 in 2022. Of this, £4,549,518 came from sales of bagels and related products (2022: £2,853,122), £90,000 from wholesale income (2022: £64,343) and £180,011 from rental income (2022: £140,000). The company’s pre-tax loss of £691,479 in 2022 was narrowed to £157,096. Director Gloria Cremonini said: “During the financial year ended 31 December 2023, the business performance has significantly improved, with an increase in turnover of 57.6% year on year, recording a profit at Ebitda level and a reduction in loss by £534,383. The drivers of this improvement are the expansion of business, with the opening of six additional new stores, the standardisation of the food offer, the introduction of the loyalty scheme with the Bagel Factory app, the refresh in the brand image and the investment to replace obsolete equipment. Furthermore, the Bagel Factory Group as all, including the other legal entities the subsidiary Bagel Nash (Retail) and the associated company Oi! Bagel Trading, has reached the first positive net profitable year since 2016. The shareholders have continued to develop the approved strategic and expansion plan, with the aim to take the company to a different level with opening new stores. To support this plan, the company has invested further in the development of the e-commerce site and has launched a new loyalty scheme, the Bagel Factory App, to increase and retain the customer base and enhance service and product offer. The app features a new rewards program and click and collect experience. The company has completed a reset programme from the end of the covid-19 pandemic, retaining only the profitable sites and putting in place a clear management structure and filling all the key functions in the head office, ready to support the company growth and improvement in the financial performance. The financial performance of 2023, the budget of 2024 and the plan of 2025 indicate that the company has improved significantly, taking the path of steady growth and expansion, and that the company is in much stronger position for the years ahead. Although there is still operative loss, which is due to the fact that The Great American Bagel Factory is supporting the majority of the overheads of the subsidiaries and associated companies, this is significantly lower than 2022, with a decreased by 81.6%. Furthermore 2023 includes additional cost which were incurred to expand the company for setting up the new sites. These total costs amounted to £175,000. The administration expenses have increased by 12.3% in comparison to 2022 due to increased activities. However, the levels of administration expenses are still below pre covid-19 period due to efficient cost control and new rental agreements with the main landlords. The depreciation right of use assets has increased by 25.1% to £551,802 due to the rental agreement for the new sites and the end of the covid-19 discounts and concessions which reduced considerably the lease cost in 2020, 2021 and in 2022. The staff costs have increased compared to 2022 by 35.8% to £1,828,841, driven by the recruitment of additional staff for the new stores, filling additional head office position to support the company growth and, most importantly of all, the minimum wages increase of 9.7% imposed by the UK government. The net cash flow shows an overdrawn balance of £2,845,943 driven by the investment for the opening of new sites which amounted to £1,081,284. This has been covered by the increase of the shareholders intercompany loan to £7,546,796 by £1,300,710. The business plan of the Bagel Factory Group for year 2022-2025, approved by the shareholders, outlines an expansion plan with reaching 34 stores at the end of 2024 and 40 stores at the end of 2025, with strong focus on enlarging sites portfolio, improving profitability and controlling food and labour costs. The budget 2024 and the financial plan for the years 2025-26 approved by the shareholders in December 2023 indicates that the company has successfully overcome the pandemic period and it is in stronger and more stable financial position.” No dividend was paid (2022: nil). Post year-end, the company has made its debut in Liverpool (Liverpool ONE destination), Sheffield (Meadowhall shopping centre) and Kent (Bluewater shopping centre). It also opened its first high street store in Scotland, on the corner of Edinburgh’s Hanover Street and Rose Street, and third store in Manchester, in Circle Square. Last month, the company added to its London footprint with an opening in Kensington Arcade – its 14th location in the capital.
Premium Club members to receive two updated databases this week: Premium Club members will receive two updated databases this week. The latest Propel UK Food & Beverage Franchisee Databasewill be sent today (Wednesday, 12 February) at 12pm. The database will feature ten new additions plus updates to existing entries. It now has 190 entries and more than 80,000 words of copy. Among the new entries are ChicKing franchisee FoodFixx, Papa John’s franchisee MKD Holdings, Domino’s franchisee Sodha & Company and Black Sheep Coffee franchisee SUR Coffee Group. Premium Club members will then receive the next Turnover & Profits Blue Book on Friday (14 February), at 12pm. The database will feature 79 updated accounts and ten new companies, taking the total to 1,066. A total of 655 companies are making a profit while 401 are making a loss. The Blue Book is updated each month and ranks companies by turnover, profit and profit conversion, listing directors’ earnings for the past five years. Premium Club members also receive access to four other databases: the Multi-Site Database, the New Openings Database, the UK Food and Beverage Franchisor Database and the Who’s Who of UK Hospitality. All Premium Clubs members will be offered a 20% discount on tickets to Propel paid-for events including Excellence in Pub Retail (May 2025) and discounts on specialist sector reports such as the Propel 500 and International Brands report. Operators that are Premium Club members are also 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 insightover 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 supplier. Email kai.kirkman@propelinfo.com today to sign up.
Labour MPs push for four-day week in Employment Rights Bill: A group of 13 Labour Party MPs and one Green MP are pushing for a four-day working week to be included in the government’s flagship Employment Rights Bill. The backbenchers are supporting an amendment to the Bill which, if successful, would create a panel of experts to consider proposals. The panel would then provide advice on “how a transition could be made from a five-day working week to a four-day working week with no impact on pay”, reports The Daily Mail. The Bill is currently going through the Commons and is being spearheaded by deputy prime minister Angela Rayner. It includes a swathe of new protections for workers such as a ban on zero hours contracts, an end to ‘fire and rehire’ tactics and greater rights to sick pay and flexible working. Downing Street has signalled it would reject the amendment on a four-day working week tabled by the group of MPs. A No.10 spokesman said: “Our plans on the Employment Rights Bill are set out in public and there is no deviation from that. In general terms, it’s not government policy to support a general move to a four-day working week for five days working pay.” Peter Dowd, the Labour MP who put forward the amendment, said that with technology like AI enabling people to work more efficiently, the benefits “must be passed back to workers”. He added: “A four-day, 32-hour working week is the future of work, and I urge my party to back this amendment so we can begin a much wider transition.” More than 200 companies have confirmed this year that they have made a permanent switch to a four-day week, and most said their employees worked 32 hours a week or less. Proponents of a shorter week say people are happier and less likely to suffer from burnout when they work fewer days, while critics say people would be paid a full-time salary for part-time work. Joe Ryle, campaign director at The 4 Day Week Foundation, said: “As hundreds of British companies and one local council have already shown, a four-day week with no loss of pay can be a win-win for both workers and employers.” Devon holiday park operator sees turnover boost due to price increases and rise in occupancy: Devon holiday park operator Lancaster Leisure, owned by the Lancaster family, saw a turnover boost in the year ending 31 December 2023 due to price increases and a rise in occupancy numbers. The company, which operates holiday parks at Woolacomb Bay, Twitchen House and Easewell Farm as well as the Woolacomb Bay Hotel, reported an increase in turnover from £20,782,593 in 2022 to £21,760,767. Pre-tax profit dropped from £5,489,838 in 2022 to £4,410,940 as costs rose by almost £1m and administration expenses by almost £2m. No government grants were received (2022: £2,667) and dividends of £24,496 were paid (2022: £3,024,486). Director Lisa Todd said: “The directors report that group turnover has increased by £0.98m due to occupancy numbers increasing throughout the holiday parks and increase prices due to the inflationary pressures in the economy. This has resulted in a strong balance sheet position for the group and net cash resources are on a firm footing. Forward bookings are promising, but as with any seasonal business, forward visibility of income is limited. The group has a very strong balance sheet, and at the end of the year, net assets totalled £59,647,832 (2022: £56,305,576).” Work is underway to introduce an outdoor swimming pool, splash park, water slides and wave rider at Twitchen House, and there are also plans for significant work to the tennis courts area at the Woolacombe Bay Hotel. Staffordshire leisure group – several income streams in the pipeline will bolster revenues and operating profits in 2025 and beyond: Staffordshire leisure group Waterworld Leisure said it has several income streams in the pipeline that will bolster its revenue and operating profit in 2025 and beyond. The business operates an indoor aqua park, adventure mini-indoor golf attraction, four fitness clubs, a swim school and childcare business, and last year launched a new £250,000 immersive play village. The company saw its turnover rise from £9,810,210 in 2022 to £10,649,066 in the year to 31 December 2023, while adjusted Ebitda was up from £6.4m to £6.9m. While pre-tax profit dropped from £25,402,660 to £6,330,818, the 2022 figure included exceptional items relating to a reorganisation of properties within its portfolio (the 2021 pre-tax profit was £4,438,259). Dividends of £4,139,101 were paid (2022: £4,150,000). Director Mohammed Chaudhry said: “The group has performed well overall and produced another year of solid and consistent results, despite the many macro challenges resulting in negative impact on discretionary spends. As a large user of energy to service our leisure complexes and pools, there has been pressure on margins due to significant rises in utilities across the group, but we have mitigated some of the rises by investing in combined heat and power units, new liquid pool covers and energy management software to drive efficiencies. Post year end, a large solar energy project is in progress that will provide 40% to 50% of our electricity requirements. We have no debt and a substantial net balance sheet with sizeable net current assets. This allows us to capitalise on any new commercial opportunities as and when they present themselves. The 2024 year is in line with forecasts despite continuing headwinds, but we have a number of income streams in the pipeline that will bolster revenues and operating profits in 2025 and beyond.”
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