Store refurbishments and new product development have helped drive growth at bakery and café chain Paul UK.

The business, which operates 36 outlets, reported group turnover up 12.3% year on year to £32.3m in the financial year ending 31 December 2016, despite the impact of business rates hikes and the National Living Wage.

Like-for-like sales were up 3% over the period, while group EBITDA (excluding head office costs and management fees) were £3.2m.

Paul UK said it made significant developments to the brand’s catering and delivery offer over the 12 months, investing in its central bakery and improving its online ordering portal.

NPD has also been a focus, with the business developing “new products putting the spotlight on the heritage of our brand and authenticity of our French bakery and patisserie”.

Two new site were opened over the year, in Notting Hill Gate and Earl’s Court, and the company reported both are trading well. Eleven stores have been refurbished, resulting in an uplift in sales in all sites, and five further stores are earmarked for refurbishment.

A new-format kiosk has opened at Paul UK restaurant Tower 42, and two new openings are planned by the end of the year.

“The fall in the value of sterling, business rate increases and the absorption of the National Living Wage provide challenging trading conditions,” said Paul UK CEO Jean-Michel Orieux.

“Through the continued refurbishment of our stores, development of our product range and central bakery plus commitment to our team and processes, we are confident Paul will continue to engage with our customers and perform well.”

Earlier this year, Paul appointed Kathryn Pretzel-Shiels as marketing director of its UK and US operations.