The owner of Patisserie Valerie has reported a rise in full-year sales and profits as tight cost controls helped it overcome soaring inflation, with the group also considering opening a new production plant in Manchester.
Revenue at Patisserie Holdings, chaired by serial entrepreneur Luke Johnson, grew 9.7 per cent to £114.2 million in the 12 months to 30 September, while pre-tax profit rose 17.1 per cent to £20.2m.
The group pointed to inflationary wage and ingredient cost pressures over the period, although it said this appears to be “easing”.
British businesses have been hammered by rising costs following the slide in sterling after the Brexit vote. But Johnson said: “Our indulgent, affordable treats remain attractive to customers, and our flexible business model has enabled us to mitigate inflationary cost pressures.”
Patisserie Holdings also said that it is reviewing options for an additional production facility in the Manchester area with capacity to serve 70 stores, as well as baking goods within all of its stores.
“Both of these initiatives will provide additional capacity to the group as well as releasing savings and efficiency and improving product quality,” the firm said.
Stores are currently serviced from its main bakery in Birmingham and from seven satellite bakeries across the UK.
Online sales rose 26 per cent to £4.8m in the period as the company said its engagement with consumers via social medial platforms such as Facebook, Instagram and Twitter is reaping rewards.
Patisserie Holdings, which also operates Druckers, Baker & Spice and Philpotts, opened 20 additional stores in the period, including further forays into Scotland and Ireland. The company trades from a total of 199 stores and is targeting 20 new stores for 2018.
Patisserie Holdings also entered into a supply-only agreement with Sainsbury’s during the year, and will operate from 18 of the supermarket’s counters by year end.
Johnson added: “We have delivered another year of excellent financial results, achieving our targets in a challenging environment.
“We opened 20 new stores many of which are performing ahead of expectations, and the performance of our new bakeries in the Republic of Ireland is encouraging.”
The board has recommended a final dividend for the year of 2.4p per share, marking a 20 per cent increase on the year before.
The group told investors: “We continue to target new towns and cities for store openings and in the year opened in 12 new geographical locations. Many of these stores are performing ahead of expectations and reinforces the demand for the Patisserie Valerie brand.
“Due to the highly cash generative nature of the business, the rollout programme is funded entirely from operating cash flows. All of our new stores were profitable from the first week of trading and we expect all of these stores to achieve the payback target of 24 months.
“We continue to engage with our customers via social media. We have run a number of online competitions in the year, one of which resulted in the customer-designed Madame Valerie gateau.”