Ivy Collection sees profit and turnover grow despite inflationary headwinds, lines up Nottingham launch as it looks to add to estate: The Ivy Collection, the Richard Caring-backed restaurant chain, saw its profit and turnover grow in the year to 31 December 2023, despite inflationary headwinds. In 2022, the company had grown its turnover by more than £100m, driven by the expansion of its Ivy Asia brand. And although the company opened no new restaurants in 2023, accounts just published to Companies House show its turnover grew from £302,927,000 to £314,744,000 in the year. This included £143,000 in franchise income compared to nothing in the previous year. Its pre-tax profit was up from £29,046,000 to £37,695,000 while its adjusted Ebitda increased from £54,787,000 to £57,584,000. This included £4,245,000 in exceptional items (year to 1 January 2023: £737,000). Among these were £1,942,000 in management restructuring and other employee related costs, £1,620,000 in contract terminations and £683,000 in disposal of other assets. Pre-opening costs were only £388,000 compared to £6,365,000 in the previous year. No dividend was paid, the same as in the previous year. Post year end, the joint facility of which the company is a guarantor was increased to reflect a term loan commitment of £15m and a revolving credit facility of £15m. Since the year end, the company has also opened new sites in Belfast (for its Northern Ireland debut), Liverpool, Canterbury and Bournemouth and is set to open a new restaurant in Nottingham – in the former Hugo Boss store on Bridlesmith Gate in Nottingham city centre. Caring also announced in January 2024 that he was exploring a sale of the restaurant group, with his advisers slapping a £1bn price tag on the business. Although Caring said in September that he was close to clinching a sale, no deal has yet gone through. In his statement accompanying the accounts, director Christopher Robinson said: “Trading surpassed the prior period with no additional site openings. While inflationary pressures reduced consumer confidence in contrast to the bounce-back highs of the prior post-pandemic period, the group’s proposition proved compelling value for our customers which contributed to another impressive year. This is notable considering the cost headwinds faced in the first half of the year from energy prices and knock on costs from the supply chain and interest rate hikes. The group now operates 50 sites across the UK and Ireland. Despite improvements in labour scheduling, increases in legislative living wages as well as new site training have increased labour percentage as customer service levels are maintained. Pleasingly, adjusted Ebitda improved compared to the prior year from good control of administrative overheads. During the period, the expiry date of the term loan and revolving credit facility was extended for a further 12 months through to 29 April 2025. At the period end date, the amount outstanding under the facility was £216m (year to 1 January 2023: £190m). The business plans to increase market share with additional sites, develop its menu offering and uphold customer service levels in the next 12 months.”

23.5 Degrees grew turnover to £93m and almost tripled profit before sale to Starbucks, focusing on opening drive-thrus in coming years: 23.5 Degrees grew its turnover to £93m and almost tripled its profit before being acquired by Starbucks, and said following the sale, it is focusing on opening drive-thrus “in the coming years”. Starbucks acquired 23.5 Degrees, its largest franchisee with an estate at the time of 113 sites, for an undisclosed sum in October 2024. Since the acquisition, 23.5 Degrees, which was founded in 2013, has opened five further sites and currently has 118 locations. Its new openings have all been drive-thrus, which the company said is “underpinning its strategy to keep rolling out this type of assets in the coming years”. Accounts just published to Companies House show that in the year before its sale to Starbucks, ending 31 August 2024, 23.5 Degrees grew its revenue from £83,539,389 the previous year to £93,081,875. The company also grew its pre-tax profit from £1,024,771 in 2023 to £2,805,750. No dividend was paid compared to £3,965,695 in 2023. Average monthly employee numbers grew from 1,724 to 1,871. At the year end, the company had £7,744,914 cash at bank and in hand (2023: £7,976,048). Following the sale, directors Mark Hepburn, Luca Contardo and Barry Mulholland all resigned as directors. In their place, Alex Rayner, Starbucks’ UK vice president and general manager, and Michael Lingham, Starbucks’ UK finance director, were appointed as directors. Lingham, in his statement accompanying the accounts, said: “The year to 31 August 2024 marked another year of growth in underlying sales and new site openings. Revenue from delivery aggregators remain flat year on year. Whilst there has been localised disruption within the store estate due to false perception of brand association with Middle East conflict, underlying trading (transactions and sales) remained strong. Inflationary pressures seen in 2023 eased since the start of the new fiscal year (September 2023) and the company has benefited from a rebalancing in commodity prices, and the benefit from a lower rate electricity contract from November 2023, at half the cost per kWh previously paid. Overall, the business performed strongly by sticking to its operating model of putting its partners and customers at the front of decision-making processes. This has been developed and honed over the last decade and as a result continues to deliver industry leading transaction growth and partner loyalty. All open stores traded throughout the year and the business has successfully rolled out 12 more drive-through stores, and significantly increased its pipeline of future stores, underpinning the next 3-plus years of growth. The sale represents a positive move for 23.5 Degrees, and is a natural evolution for the business, ensuring that its stores and its teams will continue to thrive under the ownership of Starbucks. Starbucks recognised 23.5 Degrees’ significant success and growth over the last decade, and the integral role that it has played in bringing the unique Starbucks experience to customers across the UK and will continue its success. The directors are delighted with the business performance this financial year and its continued expansion under the Starbucks brand in the UK.” 23.5 Degrees features in the Propel Turnover & Profits Blue Book. The company’s turnover of £93,081,875 for the year ending 31 August 2024 is the 128th 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 Premium Club 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.