REG - Various Eateries PLC - Year End Trading Update

Various EateriesAnnouncement

25/10/2022 07:00

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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: +44 (0)20 7220 1666
 Broking

 Harry Ansell
 Nominated Adviser

 Katy Mitchell

 Alma PR               Financial PR adviser               Tel: +44 (0)20 3405 0205
 David Ison                                               variouseateries@almapr.co.uk
 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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