Hostmore reports revenues of £159m in first year as listed company

Hostmore, parent company of Fridays, has reported revenues of £159m for the year to 2 January 2022, its first year as a publicly listed company, up from £129.1m the prior year.

The business also reported narrowed pre-tax losses of £1.58m compared to £20.19m during the prior period, as well as earnings before interest, tax, depreciation and amortisation (EBITDA) of £35.45m, up from £23.45m.

Like-for-like revenue from when restrictions began to lift in May 2021 to the end of the period was up 4% ahead on the 2019 financial year, despite the impact of the Omicron variant in the key December trading period.

Strong cash generation meant the group was able to reduce its net debt from £28.6m to £12.2m. Along with cash holdings of £32.1m and an undrawn revolving credit facility of £20m, the company said it had significant liquidity headroom to counter potential risks and fund continued growth, with six new sites to open this year including its new Fridays and Go concept in Dundee, new 63rd and 1sts in Edinburgh and Cambridge, and Fridays restaurants in Chelmsford, Barnsley and Durham.

Like-for-like revenues for the eight weeks ending 27 February were around 3% lower than the 2019 financial year.

Notwithstanding the ongoing impact of Covid-19 and the Ukraine invasion on both consumers and costs, the business said it remained positive about prospects for the year ahead and balance sheet strength and liquidity headroom provided flexibility for expansion via organic growth and acquisitions.

Hostmore demerged from Electra in November last year.

Robert Cook, Hostmore’s chief executive, said: “While we will no doubt face new macro-economic challenges as we proceed this year, together with the challenges raised by the Ukraine crisis, we are now well-positioned to consider opportunities for both organic growth via our existing brands, including the very first Fridays and Go quick service concept restaurant which opens in Dundee later this week, and the acquisition of small disruptor brands that are seeking investment capital to grow.

“The growth of the group will provide existing and new employees the reward of enhanced career progression while delivering on our goals to the benefit of all stakeholders, including our loyal shareholders.”

The group also confirmed Neil Johnson’s intention to retire from the board at the end of the AGM on 27 May 2022. As Electra’s chairman, he initiated and oversaw the demerger, at which time he became Hostmore’s chairman.

In his place, Gavin Manson is to succeed as non-executive chairman of the board, currently a non-executive director of Hostmore. Until January 2022, he was chief financial and operating officer of Electra.

David Lis, senior independent director, said: “In Gavin, we have someone who brings broad commercial and governance experience, together with significant knowledge of Hostmore, its strategy, management and stakeholders, and who therefore provides the continuity of leadership that Hostmore needs as a newly listed business.”

Manson said: “I am delighted and honoured that, subject to me being elected as a director of Hostmore at the AGM, I will be appointed to succeed Neil Johnson as chairman of Hostmore. I am confident that Hostmore is well positioned to take advantage of significant growth opportunities and I very much look forward to working with Robert Cook, the board and the management team in delivering Hostmore’s strategy to the benefit of all stakeholders.”

Hostmore operates American-themed casual dining brand Fridays, and cocktail-led bar and restaurant brand 63rd+1st. The group has 87 restaurants in the UK and Jersey and is seeking to add rapidly growing, early-stage businesses to its hospitality portfolio, as well as to extend its offering in other experience-led leisure concepts and expand its existing brands into new franchise territories.