Patisserie Holdings' gross profit soared 8.7% to £47.1m in Q1
It also reported an EBITDA of £13.6m, up by 11.6% and an EBITDA margin of 22.5%.
Luke Johnson, executive chairman, said, “The group has delivered a strong set of results in a sector which has well documented challenges. Our vertically integrated and flexible business model enables us to deliver consistent profits with our affordable treats remaining popular with our very diverse customer base. We remain focused on organic growth and with a strong balance sheet continue to assess acquisition opportunities which will have a strategic and cultural fit.”
Revenue for the period was £60.5m, an increase of £5.0m or 9.1%. Revenue from its largest brand, Patisserie Valerie, was up £5.4m or 13.2% to £45.8m (2017: £40.4m). Due to a store closure in the prior year, revenue from our other brands was down £0.3m or 2.6% to £14.7m.
EBITDA for the period was £13.6m, an increase of £1.4m or 11.6% (2017: £12.2m) and pre-tax profit was £11.1m, an increase of £1.4m or 14.2% (2017: £9.7m).
The period started well with a good build up to Christmas with the brand's new festive range, including the limited edition Reindeer slice, selling well. Sales were slightly hampered by the adverse weather conditions. However thanks to its vertically integrated supply chain and the flexibility of our workforce, the company was able to limit the impact on profit. It finished the period strongly with a record Mother’s Day weekend and a good lead up to Easter.
The group achieved strong sales from its website of £2.6m in the period, up £1.0m or 62.5%. This was driven by Patisserie Holdings' social media strategy and the relaunch of its website in February 2018, which provides customers with an enhanced user experience, including video imaging of our products, tablet/mobile compatibility and a streamlined checkout process. The revamped website is proving successful.
Patisserie Holdings established a new product development team towards the end of the prior year and are currently trialling a number of initiatives in selected stores including a new menu, a new savoury range and in store bake-off of morning goods. Its partnership with Sainsbury’s continues and Patisserie Holdings has a supply only agreement for a limited Patisserie Valerie range to be sold at Patisserie Valerie branded counters within Sainsbury’s stores.
Labour inflation now has the biggest impact on profit with National Minimum Wage, National Living Wage and Apprenticeship Levy costing an additional £0.3m in the period. Ongoing labour inflation is built into our budgets and is being absorbed as the group continues to grow. Staff retention and wellbeing is a key area of strategic focus for Patisserie Holdings and it is investing in training, rewards schemes and career planning for its employees.
