Breakfast Club focused on expansion despite drop in sales

The Breakfast Club restaurant chain is continuing to focus on expansion despite seeing turnover halve during the year ended 31 March 2021.

Catsteps Cafes Ltd, which operates the Breakfast Club brand, posted a pre-tax loss of £1.4m for the period with turnover dropping 51% to £7.6m.

Group earnings before interest, tax, depreciation, and amortization (EBITDA) dropped from £787,000 in the prior year to a loss of £606,000. At an operating level restaurant EBITDA fell from £2.2m to £218,000 during the year.

The company has been supported by its bank, shareholders and government support throughout the pandemic. This has included refinancing loans in September 2020 which are now due for repayment in September 2025.

Breakfast Club runs 13 restaurants in London, Brighton and Oxford and launched its most recent venue, in the former Cafe Rouge site Chelmsford, in November 2021.

It began a delivery service 39 days after lockdown in March 2020 which it said remains an "integral part" of the business, with a standalone delivery kitchen in Chiswick.

Breakfast Club said its management team are "actively looking at expanding further when the opportunity arises".

In late 2020 Breakfast Club founder Jonathan Arana-Morton put out an open call for applications for its managing director position after admitting the brand had failed to "realise its potential" of growing to around 30 sites. This led to Be At One cocktail bar founder Steve Locke joining on an interim basis in January 2021.

The company said: "The directors remain confident about the future trading prospects of the business despite relative uncertainty regarding Covid-19 related government restrictions. Despite making an operating loss, the directs are confident that the company will make an operating profit in FY22."

Breakfast Club's first site opened on D'Arblay Street in London's Soho in 2005.