Site closures push Burger & Lobster into £10.8m loss but revenue and spend increase
Writedowns related to the closure or sale of five sites pushed restaurant group Burger & Lobster into a £10.8m pre-tax loss in 2016, despite a 24% increase in revenue.
The results for the year to 1 January 2017 followed a difficult period for the company, which last year faced "significant doubt" over its future after a £7m loss in 2015.
That led to a restructuring and change in management team to put the business on a more even footing, which ultimately led to a new bank loan facility in April 2017.
Over the course of 2016, Burger & Lobster saw its turnover rise by 24% to just over £44m. However, exceptional items totalling just over £8.9m ensured that the company made a pre-tax loss of £10.8m.
Burger & Lobster attributed these exceptional items to the cost involved in closing the several sites, the cost of which was only partially recognised in the 2015 accounts. They included the ill-feted, 240-cover Cardiff site, its first outside of London, as well as a restaurant in Bath, and 195-198 High Holborn in London.
Two London sites, at 40 St John Street and 30 Old Bailey, were sold in February 2017 and September 2017 respectively.
Gross profit margins in 2016 increased to 55.6%, up from 53.3% the year before. Administrative expenses as a proportion of revenue fell by 8% over the same period.
Burger & Lobster said it has met all banking covenants since its new facility was arranged and that EBITDA and trading were now returning to "a budget performing level in order to meet all the terms required to repay the loan facility".
The company now has 18 restaurants and has seen expansion abroad through a succession of franchise agreements in international locations including Stockholm in Sweden, Bangkok in Thailand, Dubai, Kuwait and Jeddah in Saudi Arabia. It also runs two restaurants in New York City.
Having originally been known for charging £20 for either a burger, lobster, or lobster roll, the group, headed by co-founder and director Russian-born George Bukhov, took steps to improve profitability by restructuring its pricing policy in June last year. Burgers now range from £14 for the black bean burger to £30 for a beast burger (a burger topped with lobster meat, brie, truffle and tarragon mayo, fennel and Chinese cabbage). Meanwhile, lobsters cost £27 and an original lobster roll is £25.
The company indicated that revenue so far in 2017 is 10% ahead of 2016, with average spend up by 14% since September 2016 across London.
Burger & Lobster is now operating Deliveroo in its West India Quay, Threadneedle Street and Little Portland Street sites in London and it is also close to developing a "click and collect" system in a number of its sites.
Meanwhile, a new menu is being developed for Threadneedle Street and the company has put in place a new reservation system which it hopes will be more appropriate for its customers in the City.
It has also introduced picture menus for its cocktails in its West End restaurants and translated menus into Mandarin to cater for the Chinese customers which whom the concept has proven very popular.
Burger & Lobster: 'We made mistakes but we are stronger now' >>
Future of Burger & Lobster 'in significant doubt' after £7m loss >>
Profile: George Bukhov, Burger & Lobster >>
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