Bow Street Group PLC. (LSE:BOW) — Full Year results for the year ended 28 December 2025

0:01 Good morning, ladies and gentlemen, and welcome to the BOW STREET GROUP PLC full year results investor presentation. Questions are encouraged. They can be submitted at any time via the q and a tab that's just situated on the right hand corner of your screen. Please just simply type in your questions and press send. The company may not be in a position to answer every question it receives during the meeting itself. However, the company can review all questions submitted today, and we'll publish our responses where it's appropriate to do so on the Investor Meet company platform. Before we begin, we would decide to submit the And I would now like to hand you over to Executive Chairman, David Page. David, good morning, sir. Good morning. Good morning, everybody. This is a presentation for our full year results from last year. As it says in the title page, we're improving the performance of the company, and we've got a revised growth strategy which will drive the turnover and profits of the business.

0:59 If we explain, this company is on AIM, and it used to be called Tasty till we got involved. And we changed the name to BOW STREET GROUP, which is where we met for a cup of coffee to talk about this project middle of last year. And Nick and I got involved, having been involved in many restaurant groups before, and the purpose is to turn the business around into profitability and then use it as a base to buy our businesses. Currently, BOW STREET owns and operates two restaurant brands. Wildwood is an Italian business which sells pizzas, pastas, grills, and trades from 26 sites. And Din Tea is an Asian business which operates at three sites.

1:52 So Tasty had, like everybody else, a very difficult COVID, and it emerged from COVID and into that procedure where some of the sites were left. But we came became involved in September 25, and we raised 10 over £10,000,000. We were appointed chairman and chief executive, and we have three ways we're gonna improve the company. We are investing in the existing restaurants, which we'll go onto a little bit later. We're investing in technology within the and we're buying somewhere between four to six restaurant businesses over the next three years and expanding.

2:41 Trade has stabilized since we've become involved and is on an improving arc as we announced this morning, and we'll go into a bit later. And we are pretty enthusiastic after six months of being involved with the business. We can see lots of light at the end of the tunnel at the end of this year and going into 2027. Nick? Good morning. I'll take you through the financial highlights from the year ended 12/28/2025, financial year just ended. Revenue for the group was reported at 31,300,000. That was down 14 and a half percent. The this was in line with management expectations, and the the reduction came primarily from the re reduced number of sites as David mentioned.

3:35 In in 2024, a number of sites were exited as part of a restructuring plan. And since then, four more sites were exited during the year in 2025. So our site numbers at year end was 32 down from the 36. We saw a very strong Christmas, and we previously announced that the like for likes in December was up 1.3%. And for the year, we reported adjusted EBITDA of 2,100,000, down from 3.6. We did recognize an impairment charge during the year of 7,300,000. The majority of that, just over 7,000,000, was recognized at half year in the interim results.

4:23 That's really an impairment on the right of use assets and some of the property, plant and equipment in some of the loss making sites. Post year end, we we dispose of three more sites, which we'll come on to a little bit later in the presentation. So operating loss was reported before highlighted items, so the only one offs of 500,000 against a small profit the previous year of point four. The net cash balance at year end was 11,100,000 up from 3.3. As David mentioned, we raised £10,000,000 back in September, and there's a significant amount of funds not yet deployed.

5:09 The refurbishments really started going in the new financial year. Yes. In September, I toured the whole of The UK. I ate in every restaurant at least once, spoke to all the staff and all the managers. And what I found was an incredibly loyal group of people, and food was absolutely delicious. They are some of the more profit more popular restaurants in the towns that you can see on the right in The UK. And for instance, Northwich, I said, you know, which is the busiest restaurant in Northwich? We are, they said with great pride.

6:01 So we're moving at a pace to actually spend money on these stores because they haven't really had any money spent on them since COVID, and it's showing great results. We've got 280 points over the business we can actually improve in terms of operations. We're going through the whole estate. We're spending money where we think it's worth spending money. We have refurbished completely a handful of sites, which we announced this morning are showing plus 18% like for like sales because of the money we spent on them. And there are lots of further improvements we are we are planning throughout the calendar year. We're gonna take a break in July and August because during those times, the restaurants are very busy. So we're gonna take a break and start the refurbishing program again in September.

6:56 And we put in some incentive schemes for the employees, including some share options to make sure that everybody in the team is incentivized and we're all moving in the same direction. On the next page, we can go to what we've spent shareholders' money on in the in the last since January. Top left is Canterbury, brand new signage and lighting, lovely new outside tables and chairs. You've got Billerica in the middle. Looks a bit like Saint Tropez, but in fact, it's in Essex. Bottom left, you've got Ely. Bottom right, you've got Lincoln, and Epping is is is top right is Lincoln. Bottom right is Epping.

7:44 And all these restaurants have had new blinds, new signage, new chairs, new tables, coated paint all throughout the restaurant, new artwork. And in none of these above that we spent more than 80 or £90,000, and they've all shown dramatic increase in sales. Customers are really appreciative of us refurbishing the whole estate and then the staff, obviously, the morale is soaring. We've got some interior shots. Wherever possible, we're trying to increase the spend per head by putting in bar areas and soft burnishing. Top left and middle bottom is Lincoln.

8:31 We've Salisbury top right with a new bonkhead and some sound absorption material in the in the wall there, which is quite useful when you have a cacophonous restaurant. And then you've got Epping on the right hand side and Plymouth on bottom left, all of which are the early ones we spent money on, but the rest of the state is coming throughout the year, and the sales will follow. So not only we are spending money on our existing estate and turning around both the what was negative sales, and now they're positive, but that will only improve over the next six months to eighteen months.

9:17 But we're also using the company as a as a platform to help entrepreneurs who want to get involved and expand their businesses, but are are for one reason or another need help. And they might need help with money. They might need help because we've both done it before on a number of occasions, expand businesses. And we hope they will come to us for the structural benefits of scale buying buying synergies, we can give them and explain that if they take paper as well as cash for their businesses, they will be on a journey with us in terms of improving the the the the worth of their businesses.

10:02 We've signed a few NDAs in the last six months, and we're close to haggling on a couple of businesses. It's just a question of price and structure. What we are looking at is successful businesses between two and fifteen sites. It's gotta be between 10 and £30 ahead. We don't really wanna go into the high end because we think it's more more recession proof if we're if we're the ten to thirty bounds ahead. We've got to be able to open them around The UK and even possibly abroad. We don't mind really whether it's a counter service or table service. It's just there needs to be businesses that we're proud to own and popular with the public. We love to work with an in place entrepreneurial team that have either founded the business or want to grow it with us, Hence, them taking paper so that they're on the journey with us cash and paper for their businesses.

11:01 We could possibly convert some of the sites we've got already. We the sites we've got currently, we think that certainly 25, 26 could be turned into very profitable units. So maybe we'll look at the other three or four that to convert into acquired brands. And as I said right at the beginning, if you're part of a bigger group, you can get lots of cost synergies in public solar and energy and other other purchases. Mister Wong will talk about tilt systems and things like that. Yes. So so the third problem of the growth strategy was investments in technology and operations. So on the technology side, the business had a very old EVOS system in each restaurant.

11:51 So we are in the process of upgrading that to bring it up to date. Obviously, a lot more trade is now going through, you know, delivery platforms, takeaway, click collect. So it's important that the EPOS is really up to date. We have been looking at integrating all our customer systems that whether it's bookings or, as I mentioned, delivery and click collect. We'd like to really harness the information that we're getting from all these systems into the core CRM. And so then we can leverage that in terms of contact with database and also the behavior of our customers to better understand how we behave, what they're looking for in the restaurants, and how they're spending.

12:37 And we'll be looking to design and launch a loyalty program using this this platform not only to to give more value to our customers, but also to give us better visibility of the frequency of visits and enrich our sort of the data understanding that we'll get. On the labor side, where historically there's been significant increases on things of living wage and also employment costs, we're looking to improve on efficiency as the sales improve over investment program, and a lot of that will come from release of smart scheduling. And so the AI tools is now available in the market to help our managers better manage their their resources.

13:26 On the other sort of cost area that we'll be looking at is really energy. Obviously, it's become much more topical over the last couple of months. And so we have started introducing monitoring programs in across the state, and we're now investing in the next slice of technology to really better understand item by item in the restaurants, how they're consuming the the energy and how we can support our teams to reduce on the energy consumptions. The last piece of work is around KPIs. We have started putting in new KPIs into the business, and we have a new dashboarding system that pulls together all the data from the various sources that we have and sharing that with all our operators, and this is being rolled out in the next four weeks.

14:15 Well, quite a long journey, but it's something for this calendar year. If I can quickly take you through our current trading and outlook. Since the year end, we've seen very strong sales growth in our business. For the first quarter ended March across The States, we've seen a 5% improvement on us on our revenues. And in fact, in March, that's improved to 6.1%. As David mentioned, in some of the refers refurbished sites, there are four of them who've completed their refurbishment in q one. We've seen in March an 18.3% improvement in the like for likes. And that's really encouraging because it's showing that the refurbishment program is doing what it's supposed to do, and it's given us strength to deliver on the refurbishment across the rest of the state.

15:18 We've also seen some underperforming locations that were in negative like for like territory before September last year turned to positive growth in q one just purely from basic remedial works. And I think when we when we get around to those sites and doing a full refurbishment, we'll see some better, even better performance. We've continued to manage the portfolio of the estate, and we've closed and disposed of two Wildwoods since the year end and one dim tea. All three of them were on short leases, and that's helped us to reduce the losses in the business and also reduce the fixed costs within the business.

16:11 We've launched a trial menu in Wildwood in in February across six restaurants, and we've received some very positive customer feedback. And we and we expect this to support the performance of the estates as we roll out. We will be introducing very small price increases with the many rollouts this summer to cover some of the costs that we've seen in the labor and employment cost increases this April. Our net cash position as of Monday night was £9,000,000. This is down from the 11.1 at the year end as a result of investment we've we've gone through. And, obviously, q one typically is the quietest quarter of the year.

17:07 I hand back to Davis and just sum up on the outlook. So in summary, we are talking to a number of parties, and we signed NDAs on businesses that we want to acquire. And we are discussing the earn out strategy with them and whether they want cash or paper or both, and how we can help them grow their businesses over two or three years as we have done before with businesses like Gourmet Groglie Kitchen and Frankenmacke. And although the Gulf War hasn't helped, we're still seeing really good sales. Maybe they'd be needing more if if there hadn't been a Gulf War going on. We're making sure that our cash resources are spent as we said they were were going to be. We we probably we said we were gonna spend just over £2,000,000 on the existing estate. We might actually spend a bit less now because we've we are seeing that a spend of 80 to £90,000 in a restaurant does does pay back really, really quite quickly.

18:14 And we think the by the end of this year, we'll be motoring, and next year, we believe we'll be profitable. So Nick and I are in after six months of being involved in business, we're very enthusiastic. And we're looking forward to the second half of the year and and and the next financial year where we believe we will report improved trading and profits and buying some businesses. So if I can ask for some questions through the moderator, that'd be great. Absolutely, David, Nick. That's great. And thank you very much indeed for your presentation this morning. Ladies and gentlemen, please do continue to submit your questions just by using the Q and A tab that's situated on the right hand corner of your screen. Guys, we have received a number of questions throughout your presentation this morning. And thank you to all of those on the call for taking the time to submit their questions.

19:06 But, guys, perhaps if we dive straight into it, the first question that we have here, after closing loss making sites, how many locations remain marginal? And what is the forward pipeline of closures versus turnarounds? Well, we get a weekly report, and most of the restaurants are green and positive every week. And there are four or five down the bottom that are red in terms of sales, about the same in terms of profitability. So we're gonna give those restaurants some capital expenditure and see if we can get them all trading as green. But if we can't, then we're have to look at the bottom two or three over this next twelve months. There's a question of how well they do, and we're gonna they're gonna be judged quarter by quarter, really, on whether we keep them or not.

19:58 Perfect. Thank you. The next question asks, how immediately did you see an improvement in performance post refurbishments? Immediately. Immediately. You know, if you spend some money on a new blind and signage and people think a new restaurant's opened, you know, they they may may not have noticed it for four or five years because they've just driven past or walked past. But if you put in new signage, a new new blind, and new lighting, people come in, you know, 20% 25% of people come in straight away. This is why the pub business over hundred years had had a constant refurbishment program. They do know that spending money on the estate actually brings more people in.

20:48 Thank you. Just turning to the next question. How are your conversations with potential acquisition targets progressing? Well, we've signed NDAs on all of them, so I can't give go into details, but they are a couple of them are down to how much split between cash and shares and and earn out. So we are we must have received ten, fifteen proposals from different people in various cuisines, and we're just analyzing them all on a on a weekly basis, really, and more more are coming in every week. But we we particularly like one or two businesses that we are down to the negotiations of price and split of price between casualties.

21:38 Thank you. We have someone asking well, first congratulations on a great start, and then asking, what like for like number do you need to cover the increases in minimum wage and business rates this year? So we we are looking at a couple of percentage points. We are fortunate that on the business rates, we are we seeing an inflationary increase rather than some of the sort of larger numbers that some of the competitors have had to face. So it's really the the the minimum wage increase and employment costs that we're covering with a couple of percentage points increase. Thank you. And just a just a follow-up. What sort of like for likes will you need to get in order to hit forecast in 2027?

22:29 So the the the forecast is the market, I believe, is is looking at about 7% increase from FY '26. Well, we we don't want to get market too excited because the macro outlook, as we all know, you know, is uncertain. We're doing very well at the moment, and we're touching wood and keeping our fingers crossed that this growth continues. We're we're doing what we can internally to to fuel the growth, but, you know, we are exposed to national and macro worldwide issues. Thank you. We have someone asking how big of an impact will the new menus have, and when can we expect an impact on performance as a result of this?

23:20 We've trialed the new menu in between six and eight stores. One one an extra store wanted it in because they just wanted it early, so we put that in a few couple weeks ago. Refurbishments do more to like for like trade than the new menu. The new menu is more accessible. We're changing a few dishes. We actually had a final cook off last night, but we ate almost all the dishes again. And so that new menu can go across the estate mid May, and it we believe because of adjustments, it will probably show a slightly higher spend per head and which will cover the minimum wage increase in April. Yes.

24:07 So we'll have four or five weeks without that cover of the minimum wage, but we that's the tradition we took. Thank you. Just segueing on, how would you summarize the competitive situation in your locations? Do you expect capacity coming out? Yeah. People are closing restaurants. Some some businesses are in difficulties. And but you get you wander around the high streets, and the good restaurants are busy. You know? We were in Boes Street yesterday for this menu tasting, and I walked down Boes Street on a Tuesday night, and I know it's in Copenhagen, but most of the restaurants are in Brazil, well as ours. So in in every well, I've been around so long, but in every economic downturn or travel difficulties, you always found a find a shakeout in the market.

25:04 And I think it may be higher end, high high high spend per head restaurants, which if they don't cut the mustard and don't deliver it every time, although far too expensive, they will they will suffer, get into difficulty. There's no there's no and and and a secondary response to that question, there's no difficulty in finding new sites. There are plenty of sites available on high streets. Thank you. And I know you touched on m and a during the presentation, but we have a question here asking, how are you approaching valuation on m and a? Well, obviously, as a buyer, as low as low a multiple as possible, but we we want to buy things. So we we do want to make sure that we've got the profits over two or three years. Hence, the earn out process, Nick. I mean Yes. You know, multiples actually go up and down with the economy and how the economy if the economy is booming, the multiples go up. And at the moment, multiples are very low. So if you've got cash and paper as we have, it's quite a good time to look around to buy, like you said.

26:13 Thank you. And perhaps one final question that we've got here. What are the available trading tax losses? There's a significant amount of losses that's not currently recognized on the balance sheet. This could be deferred as tax asset of about £6,000,000. That's not recognized at the moment. Obviously, we'll keep that under review in the in the coming years as the as the business carries on with the with the growth that we've been seeing. But there's definitely tax losses there that's probably passed. Perfect. Thank you. And that's all of the questions that we've had come in this morning. So thank you very much indeed, guys, for being so generous for your time and addressing all of those questions. And, of course, if there are any further questions that do come through, we'll make these available to you immediately after the presentation's ended for you to review.

27:00 But, David, perhaps before really now, just looking to redirect those on the call to provide you with their feedback, which I know is particularly important to yourself and the company. If I could please just ask you for a few closing comments just to wrap up with, that'd be great. Yeah. We were very pleased that people we knew in the city and private individuals backed us with £10,000,000 of new money. We put in £600,000 each, and we realized that all business is a risk, but we think this is now we were right, and we're turning the business around, and the sales are really improving, not least because we went around and met all these people who worked for the company for ten, fifteen years who were really enthusiastic, really loyal. The food tastes good. We are, in fact, the ivy, but better value.

27:48 So we the interiors are amazing of the restaurants, and we're just refurbishing them and making sure the customers have good time. Perfect. David, Nick, that's great. Thank you once again for updating investors this morning. Could I please ask investors not to close this session as you will now be automatically redirected to provide your feedback in order the management team can really better understand your views and expectations? This might take a few moments to complete, but I'm sure it'll be greatly valued by the company. On behalf of management team of BOW STREET GROUP PLC, we would like to thank you for attending today's presentation. That now concludes today's session. So good morning to you all.