The Breakfast Club trims costs in a bid to boost performance
Posted by Emma on 4th Apr 2024
The Breakfast Club's strategic approach to cost management has significantly enhanced its financial outcomes, as evidenced by the recent fiscal report for the year ending 31 March 2023. Catsteps Cafes, the parent company behind The Breakfast Club, detailed a notable improvement in its operational efficiency, showcasing a reduction in operating losses alongside a commendable increase in turnover.
Source & Copyright - https://thebreakfastclubcafes.com
In the reported period, the company's losses narrowed to £947,442 from £1,053,234 the previous year, while EBITDA shifted to a loss of £75,887 from a positive EBITDA of £37,529 in 2022. A pivotal factor in this financial turnaround is the 17% growth in turnover, rising from £15.4 million to £18 million.
The 17-venue group encountered hurdles, notably in supply chain disruptions and elevated utility costs, primarily due to the conflict in Ukraine. The first six months of the fiscal year were particularly challenging, resulting in a significant EBITDA loss. However, through decisive action including a restructuring that eliminated £600,000 in costs, the company rebounded in the second half of the year, achieving £438,000 in EBITDA profitability in the final six months.
Further bolstering its financial health, The Breakfast Club undertook comprehensive cost reviews, leading to a gross profit margin increase from 73.2% in April 2022 to 77.5% in March 2023. This resilience and strategic response to adversity underscore the company's ability to navigate financial challenges and seize growth opportunities.
Source & Copyright - https://thebreakfastclubcafes.com
During the fiscal year, the company managed thirteen locations, later expanding its footprint with new openings in Covent Garden and Soho. Additionally, the launch of its inaugural franchise at Gatwick Airport, in partnership with SSP, marked a significant development, with plans to inaugurate two more sites with SSP.
Despite selling its Battersea Rise restaurant due to underperformance, The Breakfast Club is optimistically reallocating resources towards more central locations, confident in its trajectory of expansion and success.
We welcome your thoughts and comments below on The Breakfast Club's strategic decisions and their impact on the business's financial performance.