The Deltic Group Annual Results for the year ended 24 February 2018

Strong performance and further growth opportunities

17th July 2018 – The Deltic Group, the UK’s leading operator of late night bars and clubs, is pleased to announce its results for the 364 day period ended 24 February 2018. The key highlights are:

Key highlights

* Sales totalled £106.5m for the period (2017: £102.2m)

* Total sales growth of 4.2% and like-for-like growth of 4.9%

* Underlying EBITDA exceeded our forecast at £14.5m (2017: £13.2m)

* Record 7.5m admissions during the year, beating last year’s record of 7.2m

* Focus on pre-booked sales has been maintained; these grew by 8%

Business review

Having had some local market challenges in 2017, the Group is pleased to have returned to turnover, EBITDA and profit growth.

The estate refurbishment programme continued apace. During the financial year the Group invested £5.7m in refurbishing and relaunching ten bars and clubs across the country, which included Portsmouth PRYZM, a number of ATIKs, the company’s twin room brand, a Steinbeck & Shaw bar adjacent to Brighton PRYZM and a Bar&Beyond in Norwich.

The Group plans to invest a further £5.5m in the coming year thus completing the catch up refurbishment programme. Moving forward this will enable the company to divert more funding to be put to use on strategic acquisitions. The first of these acquisitions was successfully completed in March 2018 with the addition of The Terrace; a premium restaurant and club in Exeter.

The Group has also continued to invest in its customer experience. With social media continuing to play an important role in driving sales of premium products and experiences, it has launched dedicated social media and sales teams to drive social and customer engagement. The Group has also invested in the development of an AI Chatbot to improve engagement with its customers – a first for the late-night industry. The product is currently being trialled, with plans to roll it out across the business later this year. It continues to develop new technology-based initiatives which will improve customer service and save costs. The effectiveness of these initiatives already introduced is demonstrated in the record number of admissions.

Outlook

As demonstrated by the CGA Peach industry tracker, the trade of wet-led leisure businesses is outperforming other sectors of the leisure industry, against a backdrop of pressures being felt by consumers. While casual dining is struggling, late-night, wet-led is thriving and with the oversupply already removed from the sector in the years post 2005 and no new regulatory issues on the horizon, Deltic and other town centre operators are investing in their offerings. Business rates, energy levies, national minimum and living wage increases, changes in alcohol duties and the introduction of the apprenticeship levy have all provided cost headwinds that the company has worked hard to mitigate.

The Directors believe that as a well-funded operator that invests in its estate, staff and customer experience, the company has a strong platform for growth. In addition, they believe that continued targeted re-investment in the estate will allow the business to continue to go from strength to strength.

26 February 2017 24 February 2018 £000

Admissions 7,518

Turnover £106,463

Underlying EBITDA* £14,463

28 February 2016 – 25 February 2017 £000

Admissions 7,215

Turnover £102,195

Underlying EBITDA* £13,187

*Earnings before interest, tax, depreciation and amortisation adjusted to remove non-underlying items, one off venue launch costs and any one-off profits or losses on sales of assets.

Peter Marks, Chief Executive of The Deltic Group said “Our strong performance is testament to the hard work of our staff and management, our continued investment in the estate, and our focus on providing up to date contemporary designed clubs and bars, most of which dominate their local target market.

It also demonstrates what we already know – that there is a continued appetite for a great night out, and we’re pleased to see that performance has continued into this year. Current trading is in line with management’s expectations – we’re experiencing the usual seasonal downturn, which is exaggerated by the hot weather and England’s World Cup progress – but we’re confident this will pick up as we build to the peak trading period from September onwards.”

– Ends –

Enquiries

Hudson Sandler Nick Lyon, Lucy Wollam or Emily Jones at deltic@hudsonsandler.com or 020 7796 4133

Notes to Editors

* Deltic Group is UK’s largest operator for late night bars and clubs with 55 clubs and bars throughout the UK, from Aberdeen to Plymouth

* Employs over 3000 people

* The Group has a strategic focus on investing in its estate, people and entertainment to create great nights out for its customers

* The Group is dedicated to being a best in class responsible operator. In addition, it runs the “Echo Trust’’ charity fund, which regularly donates to children’s hospitals and schools in the local areas surrounding its venues

* Deltic is constantly pioneering new concepts including a broader choice of music rooms. PRYZM Kingston was the first to offer a female only area with a pamper room and opportunity to catch up away from the main dance floor and has also trialled a private dance floor concept at its Leeds and Brighton sites