Patisserie Valerie sales up 16% as store openings continue

Patisserie Valerie owner Patisserie Holdings has reported double-digit increases in revenue and profits.

Announcing its first half-year results to 31 March 2017, the business reported total revenue up 11% year on year to £55.5m and pre-tax profits up 15.7% to £9.7m.

Revenue growth was driven by Patisserie Valerie – up 15.7% to £40.4m – with sales from the group’s other brands up 0.6%.

The business said it was continuing to target 20 new store openings per year, and had opened 10 in the past half-year. These are a mix of counter and full-menu offerings in locations ranging from high-streets, retail parks and concessions. Patisserie Holdings also opened its first store under the Philpotts brand it acquired in 2014.

“All of our new openings are profitable from the first week of trading and are all funded from operating cash flows,” stated the company.

Reporting a strong seasonal sales period, the company said sales from its winter menu were up more than 160%, while it had sold more than 103,000 mince pies. Over the half-year, the group’s Cakeclub loyalty club membership rose by 22,000 members to 383,000.

The results announcement comes a month after the business kicked off a 12-week trial to supply 12 Sainsbury’s stores with Patisserie Valerie (PV) product sold in store from PV branded counters at the same price they sell in the PV outlets.

Patisserie Holdings reported that food costs were now stabilising following an inflationary period in the first half.

“We are continually working on our supply chain to ensure we buy at the best market prices and have fixed price contracts on a number of key lines,” it added. “With further improvements in our supply chain and operational gearing from the growing group, we expect our gross margin to be broadly constant to the end of the year.”

The business has also been impacted by the National Minimum and National Living Wage, but said it had limited this through more effective rostering in stores. It said the wage increases brought in last month had added £0.5m to its wage bill.

“We have delivered another strong set of results with growth in both revenues and profit and excellent cash conversion despite the challenging market conditions and the current inflationary environment,” said executive chairman Luke Johnson.

“We have opened 10 new stores including our first international store in the Republic of Ireland, and the pipeline to the end of the year to achieve our target of 20 new store openings is on track.

“With a strong balance sheet and an experienced management team, we remain operationally focused on the organic delivery and continue to assess acquisition opportunities.”

Performance in the six weeks following the results period end has been good with a strong Easter period, reported the company.

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