Bar group Nightcap has said it will slow down its expansion plans due to current economic “uncertainty” as it posted a six-fold growth in revenue during its first full year of trading.
The AIM-listed company, which owns The Cocktail Club, the Adventure Bar Group and the Barrio Familia group of bars, generated £36m in sales during the financial year to July, when it opened 12 new venues.
The firm, founded by Dragons Den star Sarah Willingham, swung to a profit of £500,000 during the period from a £5.2m loss recorded a year earlier.
Adjusted earnings before interest, taxes, depreciation, and amortisation (EBITDA) grew to £6m, up from around £950,000.
Ms Willingham, the group’s chief executive, said she was “extremely proud” of the results, saying the group had “defined” its brands and fine-tuned their business models to optimise the respective roll outs of each.
During the current financial year Nightcap has already added a further five bars to its portfolio of 36 venues, including a Blame Gloria cocktail bar in Bristol, the first site for the brand outside of London.
Bosses said the company was exposed to the current cost of living crisis and inflation, amid rising energy costs, supply chain price pressures on cocktail ingredients such as spirits and mixers, capital expenditure on new site fit outs and pressure on wages and staff retention in the hospitality sector.
Ms Willingham said while there were a growing number of potential new sites available on “increasingly advantageous terms” build costs had also grown.
The entrepreneur added that during the first 13 weeks of the current financial year, trading had also been “adversely impacted” by record-breaking warm weather, train and train strikes.
She said: “With the uncertainty in the economic climate in mind, we will slow down our expansion plans of new site openings during the current financial year. Our focus will be to maximise returns from our existing and newly opened sites and then continue our roll out programme as market conditions improve.”
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