Half Yearly Report

Patisserie Holdings plc ('the Group')

Interim results for the 6 months ended 31 March 2015

Patisserie Holdings plc, the leading UK branded café and casual dining group, today reports its interim results for the 6 months ended 31 March 2015.

Financial summary

* EBITDA is calculated as operating profit before depreciation and amortisation and for 31 March 2014 also excludes exceptional items.

Highlights

· Group revenue of £43.7m up by 22.2% (2014: £35.7m)

· Gross profit of £33.7m up by 22.0% (2014: £27.7m)

· EBITDA of £8.7m up by 23.1% (2014: £7.1m)

· Significant growth in pre-tax profit to £7.0m up by 45.0% (2014: £4.8m)

· Operating cash flows of £8.0m up by 110.5%

· Diluted earnings per share of 5.46p up by 19.7% (2014: 4.56p)

· Net cash at 31 March 2015 of £3.0m (2014: £0.2m)

· 10 new stores opened in the period all funded from operating cash flow

· 156 trading stores at the period end

Luke Johnson, Executive Chairman, said

"We have delivered another strong set of results in the first half of 2015. Sales across all of the different formats in the Group continue to perform well and our brand awareness continues to grow. We have opened 10 new stores since the beginning of the year and trialled several new product launches, such as afternoon tea, all with pleasing results. The Group is well placed for a successful second half of the year and beyond."

Enquiries

Chief Executive's Statement

Results

I am delighted to report a strong set of results for the six months to 31 March 2015. During the first half of the year, the Group delivered an increase in revenue of £7.9m or 22.2% to £43.7m (2014: £35.7m over the same period last year). EBITDA was £8.7m, an increase of £1.6m or 23.1% (2014: £7.1m) and pre-tax profit was £7.0m, an increase of £2.2m or 45.0% (2014: £4.8m).

Basic earnings per share of 5.50 pence per share represented a 14.7% increase on last year (2014: 4.79 pence per share) and diluted earnings per share was 5.46 pence per share, 19.7% higher than last year (2014: 4.56 pence per share).

All of our brands performed very well in the first six months of the year. Revenue from Patisserie Valerie (106 stores) was £28.9m, up £4.6m or 18.8% (2014: £24.3m). We launched several new seasonal products in the period, including a winter menu and afternoon tea, which have all helped drive increases in revenues. We also trialled voucher deals via promotional websites which sold exceptionally well, and due to the strength of our brand, we were able to offer these deals at little or no discount.

On the back of our growth in online sales, we developed a new website which went live in January. The website has new features including 360 degree virtual tours of our cafes and a "create-a-cake" feature which is proving to be very popular.

Revenue from our other brands was also encouraging. Druckers (22 stores) and Baker & Spice (4 stores) grew from £8.5m in 2014 to £8.7m in 2015, whilst revenue from Flour Power City (1 site), our wholesale business, grew from £1.0m in 2014 to £1.1m in 2015.

Revenue from Philpotts (23 stores), a premium sandwich retailer which we acquired in February 2014, was £5.0m. Philpotts is now fully integrated into the Group and is operating with a streamlined back-office function and is benefiting from the Group's purchasing power. In the 12 months since acquisition, the business has performed ahead of expectations and contributed £1.3m of profit before tax to the Group and is on track to meet our payback hurdle rate set for acquisitions.

Estate Development

During the period we successfully opened 10 new stores (2014: 8) located across the UK in high-streets and shopping centres and across different formats from brasseries (1), service station (1), counter service (2), concessions (1) and full service (5). All of our new stores were acquired from existing cash and are all performing in line with expectations and trading profitably.

All 19 stores opened in the prior financial year continue to trade well and a number of these have already paid back the initial capital outlay, well ahead of the 24 month target.

The pipeline for new stores remains healthy. We have identified and secured or are in advanced discussions to secure new sites to enable us to deliver the 20 store target for the year.

Notwithstanding our focus on delivering on the organic store rollout, we are continuing to assess selective acquisition opportunities that we believe would be accretive to the Group.

Cash flow & balance sheet

Cash flow generated from operations was £9.2m (2014: £5.5m) and after interest and tax payments, free cash flows available for investment were £8.0m (2014: £3.8m).

We invested £3.6m in capital expenditure (2014: £3.9m) the majority of which was invested in opening new stores.

Net cash inflow in the period was £4.4m (2014: £1.3m) and at the end of the period the net cash position was £3.0m (2014: £0.2m).

Dividends

As previously announced, the Directors continue to anticipate a maiden dividend to be paid in respect of the financial year ending 30 September 2015.

Current Trading and Outlook

We have delivered a strong set of results in the first half of the year and look to continue this performance through the remainder of 2015. Trading to date remains encouraging and, with our premium brands, established management team and a strong pipeline for new stores, I am confident that we will deliver another set of positive results in line with the Board's expectations at the year end.

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME 

FOR THE SIX MONTHS ENDED 31 MARCH 2015

CONDENSED CONSOLIDATED BALANCE SHEET

31 MARCH 2015

Registered no. 08963601

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE SIX MONTHS ENDED 31 MARCH 2015

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE SIX MONTHS ENDED 31 MARCH 2015

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE SIX MONTH ENDED 31 MARCH 2015

1 General information

Patisserie Holdings plc (the Company) and its subsidiaries (collectively the Group) operate in the casual dining sector offering cakes, pastries, snacks, meals and hot and cold drinks across the UK.

The Company is a public limited company which is listed on the Alternative Investment Market (AIM) of the London Stock Exchange and incorporated and domiciled in England and Wales. The registered office of the Company is 146 - 156 Sarehole Road, Birmingham, B28 8DT. This document along with copies of the Annual Report and Accounts may be obtained from the registered office or via the Investor section of the Company's website at www.patisserie-valerie.co.uk

2 Basis of preparation

The condensed financial statements have been prepared using accounting policies consistent with International Financial Reporting Standards (IFRS) and International Financial Reporting Interpretations Committee (IFRIC) interpretations as endorsed by the European Union and in accordance with IAS34 - "Interim Financial Reporting". The same accounting policies, presentation and methods of computation have been followed in the preparation of these results as were applied in the Group's latest annual audited financial statements.

The financial information for the year ended 30 September 2014 does not constitute the full statutory accounts for that period. The Annual Report and Financial Statements for 2014 have been filed with the Registrar of Companies. The Independent Auditors' Report on the Annual Report and Financial Statements for 2014 was unqualified, did not draw attention to any matters by way of emphasis, and did not contain a statement under 498(2) or 498(3) of the Companies Act 2006.

The condensed financial statements have been prepared under the historical cost convention and financial information is presented in sterling and has been rounded to the nearest thousand (£'000) unless otherwise stated.

3 Segmental information

Management has determined the operating segments based on the reports reviewed by the Chief Operating Decision Maker ("CODM") comprising the Board of Directors. During the six month period to 31 March 2015, there have been no changes from prior periods in the measurement methods used to determine operating segments and reported segment profit or loss.

The segmental information is split on the basis of those same profit centres, however, management report only the contents of the consolidated statement of comprehensive income and therefore no balance sheet information is provide on a segmental basis in the following tables.

The Group's segment operating profit reconciles to the Group's profit before tax as presented in its financial statements as follows:

4 Income tax expense

The tax charge has been calculated by reference to the expected effective current and deferred tax rates for the full financial year to 30 September 2015 applied against the profit before tax for the period ended 31 March 2015. The full year effective tax charge on the underlying trading profit is estimated to be 21% (2014: 22.0%).

5 Exceptional items

6 Earnings before interest, tax, depreciation and amortisation (EBITDA)

7 Earnings per share

8 Property, plant and equipment

There were no assets held under finance leases during the period.

9 Share capital

The number of shares allotted, called up and fully paid remained at 100,000,000 and totalled £1.0m at 31 March 2015; there were no changes to share capital in the period from 30 September 2014 to 31 March 2015. In the prior year the capital structure of the company was reorganised, details of which can be found in the Annual Report and Accounts for the year ended 30 September 2014.