Year End Trading Update

RNS Number : 9506D

Various Eateries PLC

25 October 2022

 

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF THE MARKET ABUSE REGULATION (EU No. 596/2014) ("MAR"). THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN

25 October 2022

VARIOUS EATERIES PLC

("Various Eateries" or "the Company"

and with its subsidiaries "the Group")

Year End Trading Update

Continued healthy demand despite tough consumer environment

Various Eateries PLC, the owner, developer and operator of all day club, restaurant and hotel sites in the United Kingdom, announces an update on trading for the 52-week period ending 2 October 2022.

Performance

The Group delivered a solid trading performance in the period, with sales for the year expected to be slightly ahead of market expectations at over £40m, demonstrating the resilience of our proposition even in times of economic uncertainty.

Prior year performance comparisons remain difficult given the extended periods of Covid-related restrictions between March 2020 and January 2022. However, for the last six months of the financial year (4 April -2 October 2022), a period of relatively normal trading, the like-for-like sales performance of the Coppa estate was ahead of the same period in 2019* (the last year with uninterrupted comparable trading). Given challenges such as the impact of the cost-of-living crisis on consumer sentiment, unusually hot weather, train strikes and the death of the Queen, the Board believes this is a positive result.

The 2022 performance of Tavolino has also been encouraging, with central London footfall increasing as workers returned to the office. Noci, our new neighbourhood specialty pasta restaurant in Islington, has performed strongly since opening in March 2022, quickly becoming a firm favourite in the local community with demand steadily increasing and excellent reviews. We are actively seeking opportunities to grow the brand's estate and are confident it will form an important part of the Group's future.

We have had considerable success in mitigating many of the well-publicised challenges affecting the industry. However, we have not been totally immune to inflationary pressures and, to date, have deliberately resisted passing on price increases to customers in full. We firmly believe that this is the right strategy for the business, at least until there is more certainty around the future trajectory of inflation. While this strategy has resulted in reduced profitability over the 52-week period compared to market expectations, we are confident that, if the inflationary pressures do not subside soon, we can restore margins via a combination of menu engineering and modest price rises, without significantly affecting our overall customer value proposition.

The Group maintains a healthy financial position, with cash at bank of £9.3m as at 2 October 2022 providing the flexibility to mitigate headwinds where necessary while continuing to invest in the business.

Expansion strategy

During the period, the Group opened four new venues: Coppa Club Putney, Coppa Club Haslemere, Coppa Club Bath as well as the Group's first Noci in Islington.

Terms have been signed to open Coppa Club Cardiff and Coppa Club Guildford in the first half of calendar year 2023. The performance of our townhouse Coppa Club in central Bath since opening in August 2022 has been particularly encouraging, attracting city centre workers and residents through all parts of the day and night. Our Cardiff and Guildford sites will boast similar formats, and enjoy similarly healthy footfall, giving us a high degree of confidence in their prospects.

There is an increasing number of high-quality sites available on increasingly advantageous terms. However, build costs have increased significantly and the economic picture remains uncertain. We will therefore continue to exercise caution in our expansion plans as we move through the new financial year, only proceeding with prospective sites that meet very strict criteria for long-term, sustainable success.

Outlook

We are confident of delivering further progress in the new financial year. These are uncertain times and inflationary pressures are set to continue, but management is experienced at navigating adversity, and will continue to respond to challenges as and when they emerge while moving the business and its brands steadily forwards.

The diversity of our brands, site formats and locations, as well as the pricing points we operate at, put us in a strong position relative to many. Looking ahead, we will continue to be proactive in addressing rising costs, as we have by the hedging of commodity utility costs through to summer 2025, and are confident of being well-positioned when the economic situation stabilises.

Notwithstanding the near-term challenges, our proposition is aligned with long-term consumer trends and demand continues to grow at a healthy rate. While we have been conservative in the rate at which we have rolled out new sites to date and will continue in a similar vein in FY23, our confidence in the future of our brands and the efficacy of our long-term growth strategy is as high as it has ever been.

The Group expects to announce its final results in early 2023.

*calculated against all sites where there was a full week of sales in the comparable week in 2019

Yishay Malkov, Chief Executive Officer of Various Eateries, said:

"The Board and I are pleased with the sales outperformance in the year, particularly in the context of the well-documented challenges the industry has faced,. An uncertain reporting period impacted by first by Covid and later increasingly material cost pressures, we navigated it successfully with all our sites remaining competitive and with costs under control. At the same time, we continued to deliver against our expansion strategy at a sensible pace.

"Looking ahead, we will continue to mitigate the effects of the inflationary environment to the best of our ability and remain confident of continuing to make good strategic and commercial progress despite it. Economic conditions will eventually improve and, with compelling and differentiated brands, a strategy designed to capitalise on a changing competitive landscape and evolving consumer tastes, a strong balance sheet and a vastly experienced management team, we believe we are plotting the right course to emerge strongly."

Enquiries

Various Eateries plc
Andy Bassadone	Executive Chairman	Via Alma PR
Yishay Malkov	Chief Executive Officer
Oli Williams	Chief Financial Officer
WH Ireland Limited	Sole Broker and Nominated Adviser	Tel: [phone]
Broking Harry Ansell
Nominated Adviser Katy Mitchell
Alma PR	Financial PR adviser	Tel: [phone]
David Ison		[e-mail]
Lily Soares Smith
Pippa Crabtree

About Various Eateries

Various Eateries owns, develops and operates restaurant, clubhouse and hotel sites in the United Kingdom. The Group's stated mission is "great people delivering unique experiences through continuous innovation".

The Group is led by a highly experienced senior team including Andy Bassadone (Executive Chairman), Hugh Osmond (Founder), Yishay Malkov (CEO), Oli Williams (CFO) and Matt Fanthorpe (Chef Director, a non-board position).

The Group operates three core brands across 15 locations:

·	Coppa Club, a multi-use, all day concept that combines restaurant, terrace, café, lounge, bar and work spaces
·	Tavolino, a restaurant aiming to address a gap in the market for high-quality Italian food at mid-market prices
·	Noci, a modern, neighbourhood pasta-only concept which serves very high-quality dishes at reasonable prices

For more information visit www.variouseateries.co.uk

 

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