Patisserie Valerie owner announces intention to float on AIM
BIRMINGHAM-based pastry shop and café owner Patisserie Holdings has announced its intention to float on the London Stock Exchange.
The group, which operates the Patisserie Valerie, Druckers and Philpotts brands, said it intended to proceed with the initial public offering and apply for the admission to trading on the Alternative Investment Market (AIM).
The company is the second West Midlands retailer in as many months to float on AIM following Poundland’s move in March.
The group, which operates five brands in total, strengthened its case to investors by saying its experienced management team had a proven sector track record and the business was favourably positioned across both the coffee shop and branded casual dining markets. These together are forecast to be worth circa £6bn and forecast to grow at over 8% per annum.
On the trading front, it said its all-day format and affordable proposition yielded an average café spend per head of £8.84 (excluding Philpotts).
It added there was broad customer appeal for the business, spread across a portfolio of five differentiated brands.
Today the business operates from 138 stores and the Flour Power City Bakery, which it said proved its ability to operate a business across a wide range of different formats and geographical regions.
In order to grow the business it said it had identified 250 potential new sites and its past trading record showed 99% of stores open for more than 12 months were profitable on a store contribution basis. The average payback on new store openings is less than 24 months.
The group saw year-on-year growth of 21.4% in 2013 with revenue of £60.1m (2012: £49.5m), while reported EBITDA for the 52 weeks to September 30, 2013 was £12m – up 25.1% on the prior year).
The rollout programme is expected to be financed from internally generated cash flow and a maiden dividend is expected to be paid in respect of the financial year ending September 30, 2015.
Paul May, chief executive of Patisserie Holdings, said: “We have built a strong business around a portfolio of appealing brands supported by our own bakeries and logistics. Our stores combine high quality, value for money, affordable treats with efficient service in a visually appealing environment.
“We trade in flexible locations that attract consumers for breakfast, a casual lunch, a quiet meeting in the afternoon or a relaxing dinner. This flexibility drives all day trading which benefits us even during the traditionally quieter mid-morning and mid-afternoon periods.
“With this favourable positioning across fragmented markets, we believe we are well-placed to continue to deliver strong organic growth, with additional opportunities for potentially attractive acquisitions of other, smaller branded groups.”
