18 Jul 2022 07:00
18 July 2022
Barkby Group PLC
("Barkby", the "Group" or the "Company")
Trading and Strategy Update
Barkby Group PLC (AIM:BARK), the diversified business group, is pleased to provide the following update on trading for the financial year ended 2 July 2022 and an update on the Group's future strategy.
Financial Performance
Group revenues are expected to increase by c.29% to £19.4m, with EBITDA returning to a positive contribution of £1.6m for the year. As set out in further detail below, the Board has resolved to dispose of certain of the Group's non-core divisions and investments, and these will be deemed as discontinued operations in the Group's financial statements. It is expected that the continuing core business will report revenue of £10.4m and EBITDA of £2.5m for FY2022*.
Barkby Group | Barkby Group - Continuing Operations | |||
2022 | 2021 | 2022 | 2021 | |
£m | £m | £m | £m | |
Revenue | 19.4 | 15.1 | 10.4 | 2.8 |
EBITDA | 1.6 | (2.5) | 2.5 | (1.5) |
Net Profit* | (0.8) | (4.4) | 1.6 | (2.5) |
* Financial expectations noted above are preliminary, and subject to year-end financial close and audit review processes
Operational Highlights
Barkby Real Estate
· Focus on building and scaling a substantial portfolio of modern ESG compliant real estate investments
· £31m GDV development pipeline in construction or legally committed
· Completion of the sale of Saffron Walden for £3.45m on 31 May 2022
· Construction has commenced on our commercial schemes at Wellingborough and Maldon
· Planning applications have been submitted at Huntingdon and Swindon and we expect decisions over the summer
Barkby Pub Co
· Revenue up 122% to £6.0m (FY2021: £2.7m) benefitting strongly from normalised trading and pent-up demand post COVID-19
· EBITDA of £0.5m (FY2021: loss of £1.4m)
· Addition of The Coach and Horses at Chiselhampton to take the pub estate to eight units
· Board considering future strategy for Barkby Pub Co
Barkby Investments
· Entered into a binding agreement for sale of the Group's stake in Verso Biosense Group Ltd for £2.6m in cash, being the total cost of the investment to date. This is expected to complete in August.
· The Board has resolved to sell and is actively marketing the following businesses and investments;
§ Workshop Coffee
§ Cambridge Sleep Sciences
§ Centurian Automotive
Future Strategy
Following the exceptionally challenging trading conditions brought about by the COVID-19 pandemic, the return to more normalised trading conditions has seen all of the Group's divisions return to a positive trajectory and the Board is now in the process of an evaluation of the Group's ongoing strategy.
To date, the Group's performance has been underpinned by the property development business, which focuses on capital light property development in roadside developments. These developments have usually involved securing options over land and then obtaining planning permission, securing tenants and overseeing construction financed by non-recourse debt. Completed developments have been sold to financial investors for a total value of c.£10.5m since IPO. The Directors now believe that there is an attractive opportunity to focus the Group's primary resources on this division.
The Directors believe there is an opportunity to hold completed developments rather than sell to a financial investor and to acquire further developed sites. It is anticipated that these sites will be primarily modern roadside developments with strong ESG credentials that are able to meet the increasing demand from retail outlets for drive through or out of town locations. The Group is currently exploring a number of routes to maximise the opportunity from pursuing this pureplay real estate strategy and considering funding options, including both equity and debt.
In the short term the Board has resolved to dispose of all the Group's other businesses and investments, with the exception of Barkby Pub Co. The proceeds from these disposals will be used to invest in the real estate strategy and reduce the debt on the Group's balance sheet. The disposals will also ensure that the Group is clearly focused on roadside property development and is more likely to be attractive to new investors.
Further details of the new strategy and progress with the disposals will be provided when the financial results for the year ended 1 July 2022 are announced. This is currently expected to be in October 2022.
Commenting, Charles Dickson, Executive Chairman, said:
"I am delighted to report that Barkby has enjoyed a record year in terms of revenue and EBITDA, with the Group benefitting from the easing of COVID restrictions and a resulting swing back to EBITDA profitability.
"We listed on AIM in January 2020, just before the start of the COVID-19 pandemic and have had our first two years as a listed business heavily disrupted by this. As we now emerge from this period, we are determined to focus on scaling our existing and established real estate business, with a particular focus on ESG compliant roadside developments in the form of drive-thru's, trade counter, last mile logistics, convenience food and light industrial commercial buildings. We will therefore be exiting our non-core assets and businesses over the coming months.
The performance of the Group since the lifting of all COVID-19 related restrictions in February 2022 has been hugely positive and we look forward to the next financial year with confidence. We look forward to providing shareholders with more detail in October when we release our full year results."
Enquiries:
Barkby Group PLC | |
Charles Dickson, Executive Chairman Douglas Benzie, Chief Financial Officer | |
finnCap Ltd (Nomad and Broker) | +44 (0) 20 7220 0500 |
Carl Holmes/Simon Hicks (corporate finance) Tim Redfern/Richard Chambers (ECM)
| |
Camarco (Financial PR) | +44 (0) 20 3757 4994 |
Jennifer Renwick/Phoebe Pugh
|
Notes to editors
Barkby Group PLC is a diversified group of high growth, high quality businesses run by an entrepreneurial and experienced management team. The existing wholly owned businesses units within Barkby include; Barkby Real Estate, Barkby Pub Co. and Barkby Investments (Comprising of Workshop Coffee, Centurian Automotive, Cambridge Sleep Sciences and a minority stake in Verso Biosense).
This announcement contains inside information for the purposes of article 7 of the Market Abuse Regulation (596/2014/EU) as it forms part of UK domestic law by virtue of the European Union (withdrawal) act 2018 ("MAR").