Message From Kris:

January 2010

Report on the full year (to 26th September 2009) and an update on recent trading.

This week Convivial London Pubs has released its full year results. The company has enjoyed an outstanding year’s performance. In summary:

• Total turnover increased 6.8% from £5.01m to £5.35m. Like-for-like turnover increased by 5.4%. The Company traded with an unchanged estate of eight freehold pubs. Additionally the Company leased The Stag in Ascot on a short-term contract from April until September.
• Pub EBITDA grew by 31% from £1.16m to £1.52m.
• Operating profit increased by 209% from £255k to £788k.
• Administrative expenses fell by £192k from £3.35m to £3.15m. This was driven by a reduction of £167k in the combined management charges and accountancy fees, plus a 4% reduction in wage costs at like for like pub level. The cost of directors’ remuneration also fell by £22k.
• Cash flow before financing grew by 129% from £261k to £598k.
• Interest charges fell by £80k.
• PBT for the year is £435k. In the prior year the Company made a pre-tax loss of £1.49m after an impairment charge of £1.2m. There have been no further impairments this year.

The new financial year has started well. Like for like sales for the thirteen weeks to 26th December are up marginally. During the first two months of the year (October and November) pub EBITDA grew by 3%. In the same period, and driven by lower interest charges and reduced head office costs, PBT was ahead by 34%. These results are in line with Board expectations.

Convivial has made significant improvements in its cash position and continues to trade well within its bank facilities and covenants.

CEO Kris Gumbrell commented:

“We are delighted with our first year of trading under the new management team. Convivial has gone from strength to strength this year. The team has worked hard; we have conserved cash, focussing on developing people and motivation within the business. The drive has been to innovate and encourage our managers to be more proactive. Despite the uncertain trading outlook, we still see opportunity in our core business and we remain focussed on delivering quality and value for money. In the last quarter we have seen a deceleration of growth and we do not believe that London is immune to the national economic picture. However our controls and lower financing costs have resulted in EBITDA and PBT growth in the first 8 weeks of the new financial year. We shall continue to seek opportunities that can fit and add value to our core business. We see the current climate as very challenging but not without opportunities to grow our business.”

We thank you for your ongoing support and look forward to hearing from you and seeing you in the business should you be in London.

Best regards

Kris Gumbrell
CEO
Convivial London Pubs PLC

enquiries@conviviallondonpubs.com

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