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2016-05-10

RESTAMAX PLC INTERIM REPORT FOR 1 JANUARY-31 MARCH 2016: Turnover grew by more than 11 per cent in January-March 2016

Restamax Plc
INTERIM REPORT 10 May 2016 at 8:00 a.m.
RESTAMAX PLC INTERIM REPORT FOR 1 JANUARY-31 MARCH 2016

Turnover grew by more than 11 per cent in January-March 2016

TURNOVER AND INCOME

Group's result for January-March 2016
Entire Group:
The Group's turnover was MEUR 27.2 (MEUR 24.5), growth of 11.3 per cent.
EBITDA was MEUR 2.8 (MEUR 2.9), decrease of 4.0 per cent. Operating profit
was MEUR 0.2 (MEUR 0.8), decrease of 74.1 per cent.

Restaurant business:

The turnover of the restaurant business segment was MEUR 23.1 (MEUR 22.4),
growth of 3.0 per cent. EBITDA was MEUR 2.3 (MEUR 2.6), decrease of 9.6 per
cent. Operating profit was MEUR 0.0 (MEUR 0.7), decrease of 96.6 per cent.

Labour hire business:

The turnover of the labour hire business was MEUR 6.5 (MEUR 4.3), growth of
51.2 per cent. EBITDA was MEUR 0.6 (MEUR 0.4), growth of 30.7 per cent.
Operating profit was MEUR 0.2 (MEUR 0.1), growth of 35.7 per cent.
In January-March 2016, the turnover of the entire Restamax Group increased by
over 11 per cent while EBITDA dropped by 4 per cent and operating profit
declined by approximately 74 per cent. Factors affecting the result include
the exceptionally cold weather in January, which influenced restaurant sales
in January. The Group's seasonal restaurants in the north of the country
achieved a reasonably good result, however. A challenging period for the
restaurant business, Easter was in the first quarter of the year, and this
reflected in a rise in the personnel costs, and in a decline in the turnover,
of the Group. The operative management of the Group did not react quickly
enough to the change that took place in the demand for services after
year-end. The opening of new restaurants and the closure of some old ones
also affected the result. Last year's reference period, i.e. the first
quarter of 2015, was strong in terms of the result.

PROSPECTS FOR 2016

Profit guidance (as of 23 February 2016):

Restamax expects the Group's turnover to increase and profitability to remain
on a good level in the 2016 financial year.

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| KEY FIGURES |
| |
| Restamax Group in total |
| (EUR thousand) 1-3/2016 1-3/2015 1-12/15 |
| KEY FIGURES, entire Group |
| Turnover 27,212 24,450 113,618 |
| EBITDA 2,778 2,895 16,536 |
| EBITDA, % 10.2% 11.8% 14.6% |
| Operating profit 204 788 7,266 |
| Operating profit, % 0.7% 3.2% 6.4% |
| Review period result -74 488 4,809 |
| To shareholders of the parent company 142 638 5,050 |
| To minority shareholders -216 -150 -241 |
| Earnings per share (euros) to the shareholders of the parent company 0.01 0.04 0.31 |
| Interest-bearing net liabilities 28,838 21,405 29,313 |
| Gearing ratio, % 72.2% 53.9% 73.2% |
| Equity ratio, % 45.0% 50.1% 44.4% |
| Return on investment, % (p.a.) 1.5% 5.0% 10.8% |
| Net financial expenses 209 170 1,195 |
| |
| Restaurant business |
| (EUR thousand) 1-3/2016 1-3/2015 1-12/15 |
| Turnover 23,124 22,443 100,315 |
| EBITDA 2,316 2,562 14,801 |
| EBITDA, % 10.0% 11.4% 14.8% |
| Operating profit 22 654 6,492 |
| Operating profit, % 0.1% 2.9% 6.5% |
| |
| KEY FIGURES |
| Material margin, % 74.0% 74.1% 74.3% |
| Staff expenses, % 30.4% 29.6% 28.5% |
| |
| Labour hire business |
| (EUR thousand) 1-3/2016 1-3/2015 1-12/15 |
| Turnover 6,527 4,316 24,151 |
| EBITDA 558 427 2,161 |
| EBITDA, % 8.5% 9.9% 8.9% |
| Operating profit 182 134 775 |
| Operating profit, % 2.8% 3.1% 3.2% |
| |
| KEY FIGURES |
| Staff expenses, % 87.1% 85.9% 85.2% |
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CEO MARKKU VIRTANEN
The first quarter of 2016 was challenging

Between January and March 2016, the turnover of the entire Group increased
more than 11 per cent, EBITDA dropped by 4 per cent and operating profit
declined by 74 per cent from the previous year. Last year's reference period,
i.e. the first quarter of 2015, was good.
The unusually cold weather in January affected the sales of our restaurants in
January. Our seasonal restaurants in the north of the country achieved a
reasonably good result. Easter is a challenging period for the restaurant
business, and this year it was within the first quarter. In part, this showed
as an increase in the personnel costs and as a decrease in the turnover of
our business operations. Moreover, our operational management was not
prepared to react swiftly enough to the change in the demand of our services
that took place at the beginning of the year. This was a good reminder of how
susceptible the field is to shifts in economic trends and how situations on
the restaurant markets can change very rapidly. Our result was also affected
by the opening of new restaurants and the discontinuation of a number of old
ones.
In both the restaurant and labour hire sector, the result is primarily made
towards the end of the year, and the first quarter is always the weakest.
During the review period, we opened a Passion Food&Bar restaurant and Pizzeria
Bella Roma in Jyväskylä, a Classic American Diner restaurant at the Jumbo
Shopping Centre in Vantaa, and we purchased the business operations of the
Namu and Showroom restaurants located in Helsinki. Expanding our operations
to Southern Finland also supports our growth strategy. It is our goal to
continue to improve our position in the Helsinki Metropolitan Area. The
openings and investments carried out in the first quarter, along with the
acquisition last year of a majority shareholding in Hernesaaren Ranta Oy,
strongly support this objective.
Recovery and thousands of new jobs in the restaurant field

The economy is estimated to see some gradual growth in early 2016. Consumer
expectations for the spring are low, which implies that the travel and
restaurant sector will have a slow period at the beginning of the year.
Consumer expectations collapsed by last summer, and overall confidence in the
economy is currently clearly below the long-term average. However, there are
signs of recovery over the long term. For example, according to forecasts
prepared by ETLA, the Research Institute of the Finnish Economy, Finland's
GDP will grow by slightly less than one per cent in 2016. This growth is
expected to increase in 2017 and 2018.
The Finnish Hospitality Association MaRa's forecasts indicate that turnover in
the restaurant field increased by about 4 per cent in the first quarter of
2016. Restaurant food sales are increasing but the sale of alcohol continues
to decline. Up to 64 per cent of the turnover of the restaurant field comes
from food sales. According to monitoring by MaRa, the turnover of fast food
restaurants in Finland increased by as much as 7.1 per cent.
Thousands of new jobs are expected to emerge in the travel and restaurant
sector by 2020. New restaurants are being opened particularly in growth
centres and new shopping centres. Fast food restaurants in the Helsinki
Metropolitan Area are expected to create up to 2,000 new jobs over the course
of 2015 and 2016. The growth prospects are strong especially in growth
centres, where the demand for restaurants and other companies providing
experiences is high. These prospects are effectively supported by Restamax's
investment in the SuperPark indoor activity parks at the turn of the year,
the opening of the Classic American Diner at the Jumbo Shopping Centre in
Vantaa in February, and the opening of the Lintsi American Diner at the
Linnanmäki amusement park in April.
New goals guiding operations

We began 2016 by focusing our efforts on the new long-term goals set by our
Board of Directors. Our goal is to expand our restaurant operations abroad.
At the same time, we will also continue our profitable growth in Finland in
the restaurant and labour hire businesses. Our turnover target for 2018 is to
reach MEUR 180 by the end of that year. EBITDA and operating profit are
expected to remain on a good level.

The expansion abroad gives us the opportunity to export our existing brands to
new market areas. We can establish ourselves in other countries with our
numerous restaura...

Författare Hugin

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