The owner of Patisserie Valerie is eyeing up acquisition targets after it delivered double-digit profit and sales growth, despite taking a hit from the Beast from the East.
Patisserie Holdings, the company behind Patisserie Valerie, said it was affected by bad weather during its first half, but that its control over its supply chain meant it could limit the impact on profit.
Pre-tax profit grew by 14.2% in the six months ended March 31, up from £9.7 million to £11.1 million.
Revenue climbed 9.1% to £60.5 million. The firm hiked its interim dividend by 20% to 1.44p per share.
The group has delivered a strong set of results in a sector which has well-documented challengesLuke Johnson, executive chairman of Patisserie Holdings
Luke Johnson, executive chairman of Patisserie Holdings, said: “The group has delivered a strong set of results in a sector which has well-documented challenges.
“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.”
However, the firm was stung by a rise in labour costs associated with the national minimum wage, the national living wage and the apprenticeship levy.
Over the period, this resulted in an additional £300,000 cost to the business. Reviews on rents and business rates across the retailer’s portfolio added £200,000 to its costs.
Patisserie Valerie opened 10 stores during the period, and now trades from 206 stores.
Website sales were up 62.5% from £1.6 million to £2.6 million after the company relaunched its website in February, and became more active on social media.
The chain has also launched a number of initiatives to drive sales, such as new menus, a “slice of the month”, and in-store bake-offs.
The board is aiming to open 20 new stores over the year, with outlets in Lancaster, Battersea and Belfast Forestside set to open by the end of this month.
Patisserie Valerie also has a partnership with Sainsbury’s. It supplies Patisserie Valerie branded counters in the supermarket, and currently operates from 31 stores and 14 “click and collect” sites.
The bakery brand will soon enter a further 10 Sainsbury’s supermarkets.
Patisserie Valerie’s success comes as a host of restaurant chains struggle under the weight of business rates, and a squeeze on consumer spending.
A number of groups have shut stores and slashed rents under a Company Voluntary Agreement (CVA), a form of insolvency that must be approved by landlords.
Jamie’s Italian, Byron and Prezzo have all embarked upon CVAs this year in a bid to stay afloat.