Bow Street Group (BOW) H2 2023 earnings summary

Executive summary

• Completed a 53-week period with 4.1% like-for-like sales growth, but profitability was hampered by rising utility, food, and labor costs, and lower footfall due to post-Covid work-from-home trends and transportation strikes.

• A major post-year-end restructuring plan was implemented, closing underperforming sites, renegotiating leases, and injecting a £750,000 convertible loan to stabilize the business.

• The estate was reduced to 53 restaurants at year-end, with further closures and lease renegotiations post-year-end to focus on a smaller, more profitable core.

Financial highlights

• Revenue for the period was £46.9m, up 6.5% year-over-year (2022: £44.0m).

• EBITDA before highlighted items was £4.4m (2022: £2.6m); pre-IFRS 16 EBITDA loss was £0.9m (2022: £2.6m loss).

• Operating profit before highlighted items was £0.3m (pre-IFRS 16: £2.6m loss; 2022: £4.4m loss).

• Loss after tax was £14.5m (2022: £6.4m loss), driven by £12.3m in impairment charges.

• Net cash inflow before financing was £2.4m (2022: £2.8m); cash at period end was £4.2m (2022: £7.0m).

• No dividend proposed for the year.

Outlook and guidance

• The restructuring plan is expected to deliver significant EBITDA improvement over the next two years, with a focus on cost savings and site rationalization.

• Management anticipates continued headwinds from energy, labor, and food costs, as well as consumer spending pressures, but expects profitability to improve towards year-end 2024.

• The group is exploring new concepts, partnerships, and expansion opportunities for 2025.