31 March 2009
Trading Update
The Clapham House Group PLC (‘Clapham House’ or the ‘Company’)
Clapham House (AIM: CPH), owner and operator of Gourmet Burger Kitchen (‘GBK’), The Real Greek and Tootsies, today provides the following trading update in advance of the release of its preliminary results for the year ended 29 March 2009 on Tuesday, 7 July, 2009.
Trading Update
The Company expects to report preliminary results for the year ended 29 March 2009 in line with market expectations, driven by growth in sales from continuing operations in excess of 15%.
GBK has continued to deliver good sales performances, particularly given the general UK economic climate. Returns on capital invested in new and existing GBK restaurants are strong. We have successfully opened six GBK restaurants in the financial year in Baker Street, Westfield and Spitalfields Market in London, Bristol Cabot Circus, Cardiff City Centre and Liverpool One. This brings the total number of GBKs in the UK to 49, of which 28 are within Greater London and 21 are nationwide.
Since the purchase of six GBK London restaurants in November 2004, we have opened 43 restaurants throughout the UK. GBK restaurants are trading well in a variety of locations from Edinburgh to Brighton and Cardiff to Canary Wharf and as such we are confident of GBK’s significant roll-out potential to at least 150 restaurants across the UK.
Our overseas partners have opened six restaurants during the financial year and there are now 10 GBK restaurants operated under franchise outside of the UK and 3 restaurants under construction.
Sales at The Real Greek and Tootsies have been satisfactory, despite the weak UK economy. During the period, The Real Greek opened two restaurants at London’s Spitalfields Market development and at Westfield London. There are 8 The Real Greeks in London and 23 Tootsies/Dexters across the UK, one of which operates under franchise at Bristol airport.
Opening Programme
In the coming financial year to 28 March 2010, we will continue to focus on the growth of GBK, both directly in the UK and under franchise internationally. We are witnessing a correction in UK property valuations as landlords have begun to adjust their rental expectations for new properties and leases. We expect this realignment to accelerate over the next 12 months and will plan our expansion to take best advantage of this.
Debt / Banking Facilities
As announced at our interim results in December 2008, we renewed and extended our main banking facilities until June 2012. Total Company banking facilities are £21.7m and we continue to trade comfortably within the covenant limits. We expect to report Net Debt as at 29 March 2009 to be in line with expectations.
Review of Goodwill and Fixed Assets
Between now and the announcement of our full year results in July, we will complete our annual review of the balance sheet book carrying values of goodwill and fixed assets; this is likely to lead to a non-cash impairment charge. Such an impairment charge will have no impact on the cash flows or the banking arrangements of the Company.