GCINightcap reports positive interim results amid industry challenges
() , owner and operator of 46 premium bars, released its unaudited financial results for the 26-week period ended December 31, 2023 (H1 2024).
Nightcap reported a revenue increase of 42.1% to £33.4m, driven by the acquisition of Dirty Martini, the collaboration with The Piano Works over the Christmas period, and the maturing of sites opened in the previous financial year. IAS17 Adjusted EBITDA increased 5% to £2.1m. Like-for-like sales decreased 10% in H1, attributed largely to ongoing train strikes and the cost of living crisis.
Nightcap noted excellent performance over the Christmas and New Year period. Group performance for the 4-week period ended December 13, 2023 was £7.4m, a 65.7% increase compared to the equivalent period in 2022.
Cash was £3.1m on December 31, 2023 (excluding cash in transit) and total bank debt was £8.6m, resulting in net debt of £5.6m. Nightcap had 46 bars at period end, following the acquisition of Dirty Martini in FY23.
Sarah Willingham, CEO, commented: "I am pleased that we continue to show great progress in building the UK's leading bar group. Five acquisitions and 13 openings in just over three years is an incredible achievement. To deliver an increase in revenue of 42.1% and an increase in IAS 17 Adjusted EBITDA of 5% for the half year during such a tough period for the hospitality industry is down to the dedication of our incredible team."
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Overall, positive interim results from Nightcap amid a challenging year for the industry. The group expects a gradual recovery later in 2024 as lower inflation, lower energy costs, lower interest rates, and higher income begin to boost consumer spending. So far Nightcap is trading in line with market expectations.
The group now operates 46 bars in London and across the country, aiming to grow its estate to more than 100 bars in the medium term. As well as rapid growth, it is focused on the integration of new businesses, particularly Dirty Martini (which was acquired just prior to the beginning of the financial year) and, more recently, the integration of The Piano Works. Profit conversion remained strong as reported an increase in IFRS 16 Adjusted EBITDA of 20% to £4.9m from £4.1m in H1 FY2023. IAS17 Adjusted EBITDA increased by 5% to £2.1m for the half-year from £2.0m in H1 FY2023.
Nightcap's performance is impressive given the challenging trading conditions during the half. The group estimates the adverse impact of the rail strikes at £0.8m at the IAS17 Adjusted EBITDA level during the period. Yet, sales momentum remained strong as revenue rose 42.1% in H1, following a similar 48.7% revenue increase in the equivalent period for 2023. The accumulated growth since IPO is a result of 5 acquisitions made at appealing valuations, as well as the opening of 13 new bars on attractive terms offered by landlords during Covid and the cost of living crisis.
Nightcap is well-positioned for continued growth as consumer spending recovers, remaining on track to double the size of its estate in the medium term.
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