Novus reports strong earnings and eyes expansion

The group, which was acquired by LGV Capital and Hutton Collins in July for £100m, reported a 25.4% rise in sales for the period to £133.8m and said that all parts of its business were in double-digit growth. Adjusted EBITDA (excluding disruption costs of £500k) reached £17.3m.

Like-for-like sales across its 37-strong estate, which does not include the Balls Brothers and Lewis & Clarke business it acquired last March, increased 12.2% during the year.

Food sales continued to rise across the group, up 32% during the period.

The group said that its balance sheet had been strengthened following its acquisition by LGV and Hutton Collins, with bank debt reduced from £79.9m to £37.5m. LGV and Hutton Collins have injected c£35m into the business to purchase new sites, and around £8m is available each year for fitting out and refurbishing venues.

The company is looking to add a further 30 sites in London over the next three years, and chief executive Steve Richards told M&C Report​ he had never seen so many single site opportunities being brought to the market in the capital and that the group was “active in acquiring new assets and engaged in a number of processes”.

It is thought the company has run the rule over the Drake & Morgan business and a number of TCG sites.

He said: “With access to significant funding from our new owners we will strengthen our existing cluster footprint by acquiring between 30 and 40 outlets over the next few year, enhancing and extending Novus’ market leading position in the London premium market.”

In the long term the company, which also operates the Tiger Tiger brand, expects to look at expansion opportunities outside London in cities such as Manchester, Bristol and Leeds.

Richards said that despite seeing like-for-like sales increase by around 4% over the period of the Olympics helped by the group’s pre-booked business, central London had become “a ghost town” during the event.

He said that trading since the summer had been subdued but that bookings for Christmas were in double-digit growth, up on a strong year last year. Sales over the seven-week Christmas and New Year period make up 50% of the group’s profits.

“We anticipate that the London market will remain buoyant for the foreseeable future and over the next few weeks we are looking forward to a strong Christmas performance.”