Patisserie Holdings Plc Regulatory News (CAKE)

Patisserie Holdings plc ('the Group')

The Group has continued its strong performance with double digit revenue and basic earnings per share growth.

Patisserie Holdings plc, the leading UK branded café and casual dining group, today reports its interim results for the 6 months ended 31 March 2016.

Financial summary

* EBITDA is calculated as operating profit before depreciation and amortisation.

Highlights

· Group revenue of £50.0m up by 14.4% (2015: £43.7m)

· Gross profit of £39.2m up by 16.1% (2015: £33.7m)

· EBITDA of £10.6m up by 21.3% (2015: £8.7m)

· Significant growth in pre-tax profit to £8.4m up by 20.6% (2015: £7.0m)

· Operating cash flows of £8.9m with cash conversion of 96%

· Basic earnings per share of 6.68p up by 21.5% (2015: 5.50p)

· The Group has maintained its strong balance sheet position with net cash at 31 March 2016 of £8.9m (2015: £3.0m)

· 12 new stores opened in the period all funded from operating cash flow in line with the Group's strategic plan.

· Trading from 177 stores at the period end

· Interim dividend of 1.00 pence per share (2015: nil)

Luke Johnson, Executive Chairman, said

"I am delighted to announce an excellent set of results for the six months to March 2016. The Group has continued to deliver strong growth in sales and profit in what is a competitive trading environment. We opened 12 new stores in the period all of which are performing well. Our pipeline for new stores is well developed and I look forward to another period of strong growth in the second half of the year".

Enquiries

Chief Executive's Statement

Results

I am pleased to report the results for the six months ended 31 March 2016. Revenue for the period is £50.0m, an increase of £6.3m or 14.4% (2015: £43.7m). EBITDA is £10.6m, an increase of £1.9m or 21.3% (2015: £8.7m) and pre-tax profit is £8.4m, an increase of £1.4m or 20.6% (2015: £7.0m).

Basic earnings per share is 6.68 pence per share (2015: 5.50 pence per share) and diluted earnings per share is 6.61 pence per share (2015: 5.46 pence per share), an increase of 21.5% and 21.1% respectively.

The performance of the Group's brands, during the first six months of the year, was good. Patisserie Valerie, our largest platform, delivered revenues of £35.0m from 126 stores, an increase of £6.1m or 21.1% (2015: £28.9m from 106 stores). Revenue from our retail brands, Druckers and Baker & Spice is £9.1m, an increase of £0.4m (2015: £8.7m) and revenue from Flour Power City, our wholesale bakery, is £1.8m (2015: £1.6m). Revenue from Philpotts, our premium sandwich retailer is £4.9m in the period, a decrease of £0.1m (2015: £5.0m) which is partly due to an earlier Easter period and partly due to a focus on higher margin corporate sales.

In the period we have experienced a number of known cost pressures and in the second half of the year we will also feel the pressure of the National Living Wage. We have worked hard in the period to mitigate these cost pressures and through efficiencies and savings particularly in our supply chain, we have been able to improve our gross profit margin by 1.0% which means that our overall cost base will remain stable to the year end.

We are continually working on new product development and launched our Glorious Gluten Free range in January following high customer demand. The gluten free range is the first step in expanding our offering to meet our customer's dietary requirements.

Estate Development

In the period we opened twelve new stores funded from operating cash flow including two designer outlets, one motorway service station, two brasseries, two shopping centres, one new store in Scotland, three concession stores in Debenhams and our first new Baker & Spice store.

We strategically opened a number of stores in locations where we did not have a previous presence, such as Preston, Durham, Cheshire Oaks and Bradford. These locations have lower rentals than more traditional larger city locations and with good sales these stores are exceeding management's expectations. The pleasing performance provides a good indicator of the demand for the growing Patisserie Valerie brand.

Baker & Spice is our premium brand which was acquired in 2009 and operates in exclusive areas of Central London. In March we opened our first store under this brand in Brighton.

The pipeline for the second half of the year is healthy and includes a number of carefully selected new geographical areas including our first store in Northern Ireland, an additional motorway service station and a factory outlet.

Cash flow & Balance Sheet

The Group remains solely funded from reserves and operating cash flows and at the end of the period had net cash of £8.9m (2015: £3.0m).

Operating cash generated in the period was £10.2m (2015: £9.2m) and after interest and tax payments, free cash flows available for investment were £8.9m (2015: £8.0m).

We invested £4.4m on property plant and equipment, which includes investment in new stores and a refresh of the existing estate.

During the period we paid £1.67m in relation to our maiden final dividend for the year ended 30 September 2015 of 1.67 pence per share. The Board is committed to a progressive dividend policy for shareholders and as such has declared an interim dividend of 1.00 pence per share which will be paid on 24th June 2016 to those shareholders on the register at the close of business on 27th May 2016.

Our focus remains on our store rollout programme. However we continue to assess acquisition opportunities which will add value to our operations.

Current Trading and Outlook

These results represent another strong performance from the Group. We continue to control costs tightly, make efficiencies in our supply chain and with the quality of the new site openings in the first half of the year, the developed pipeline and continued solid trading from our premium offerings I am confident of achieving the Board's expectations for the full year.

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE SIX MONTHS ENDED 31 MARCH 2016

CONDENSED CONSOLIDATED BALANCE SHEET

31 MARCH 2016

Registered no. 08963601

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE SIX MONTHS ENDED 31 MARCH 2016

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE SIX MONTHS ENDED 31 MARCH 2016

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE SIX MONTH ENDED 31 MARCH 2016

1. General information

Patisserie Holdings plc (the Company) and its subsidiaries (collectively the Group) operate in the casual dining sector offering cakes, pastries, snacks, meals and hot and cold drinks across the UK.

The Company is a public limited company which is listed on the Alternative Investment Market (AIM) of the London Stock Exchange and incorporated and domiciled in England and Wales. The registered office of the Company is 146 - 156 Sarehole Road, Birmingham, B28 8DT. This document along with copies of the Annual Report and Accounts may be obtained from the registered office or via the Investor section of the Company's website at www. patisserie-valerie.co.uk

2. Basis of preparation

The condensed financial statements have been prepared using accounting policies consistent with International Financial Reporting Standards (IFRS) and International Financial Reporting Interpretations Committee (IFRIC) interpretations as endorsed by the European Union and in accordance with IAS34 - "Interim Financial Reporting". The same accounting policies, presentation and methods of computation have been followed in the preparation of these results as were applied in the Group's latest annual audited financial statements.

The financial information for the year ended 30 September 2015 does not constitute the full statutory accounts for that period. The Annual Report and Financial Statements for 2015 have been filed with the Registrar of Companies. The Independent Auditors' Report on the Annual Report and Financial Statements for 2015 was unqualified, did not draw attention to any matters by way of emphasis, and did not contain a statement under 498(2) or 498(3) of the Companies Act 2006.

The condensed financial statements have been prepared under the historical cost convention and financial information is presented in sterling and has been rounded to the nearest thousand (£'000) unless otherwise stated.

3. Segmental information

Management has determined the operating segments based on the reports reviewed by the Chief Operating Decision Maker ("CODM") comprising the Board of Directors. During the six month period to 31 March 2016, there have been no changes from prior periods in the measurement methods used to determine operating segments and reported segment profit or loss.

The segmental information is split on the basis of those same profit centres, however, management report only the contents of the consolidated statement of comprehensive income and therefore no balance sheet information is provide on a segmental basis in the following tables.

The Group's segment operating profit reconciles to the Group's profit before tax as presented in its financial statements as follows:

4. Income tax expense

The tax charge has been calculated by reference to the expected effective current and deferred tax rates for the full financial year to 30 September 2016 applied against the profit before tax for the period ended 31 March 2016. The full year effective tax charge on the underlying trading profit is estimated to be 20% (2015: 21.0%).

5. Earnings before interest, tax, depreciation and amortisation (EBITDA)

6. Earnings per share

7. Property, plant and equipment

There were no assets held under finance leases during the period.