Coppa Collective (LSE:COPC) — Acquisition and Strategy Update - Launching the Next Phase of Growth

0:02 Good morning, and welcome to the COPPA COLLECTIVE PLC Acquisition and Strategy Update Investor Presentation. Throughout this recorded presentation, investors will be in listen only mode. A session. Before we begin, I would like to submit the following poll, and I would now like to hand you over to CEO, Mark Loughborough. Good morning to you. Thanks, Alex. Good morning, everyone, and thank you for your time today. For those that I haven't met, I'm Mark Loughborough, the CEO of COPPA COLLECTIVE, formerly Verus Eateries. Wanna start with a simple point. The narrative around UK hospitality is broadly negative. Cost pressures, consumer weakness, and a sector that many probably see as challenged.

0:49 Reality is probably a little bit more nuanced. People are going out slightly less often, but when they do, they're spending more and they're becoming far more selective about where they spend that money. That creates a tougher market for the average operator, but also creates a very attractive market for businesses set up in the right way. And that's where we think we are now. We've been working hard to build a stronger, more focused, and more scalable business. And with COPPA COLLECTIVE, and now Linwood, we believe we've got the portfolio suited to how the market works today. What we wanna show you today is that we're a very different business to the one that some investors may remember and one that's hopefully worthy of your attention. The key point on this slide is the business now has the leadership team and board with real experience in building value in hospitality.

1:40 I joined in 2025 having spent over thirty years in hospitality, including fourteen years at Young's, where I was part of the leadership team that helped to transform the business into one of The UK's most admired premium pub companies. Alongside me is Sharon Badalek, our CFO, who joined in April 2023. Sharon has a strong track record of scaling businesses and delivering value, including including growing view cinemas and leading major transactions at Redcap. At a board level, we're supported by some of the most experienced operators in the sector. Hugh Osman's been involved in building and scaling businesses such as Pizza Express and Punch Taverns, while Andy Bacidoni has has been behind brands, Coke Brasserie and Strada.

2:26 And the wider board brings a strong PLC governance, m and a, and brand experience. So the point is this. This is a team that knows what good looks like, knows how to grow with discipline, and knows how to create value in hospitality over time. So why look at the business again now? There are four key points. First, FY twenty five was an inflection point. The operational work that we've been doing is now clearly coming through in the numbers. Second, that momentum has continued into FY twenty six with strong festive trading and positive like for like sales performance. Third, the Linwood acquisition broadens the platform, adding a third highly attractive growth channel. And fourth, the business is now set up to scale.

3:14 We have a stronger operating platform, clearer brand focus, and an ability to grow without materially increasing the central costs. So this is not the same business it was twelve or eighteen months ago. It's stronger, it's broader, and it has a much clearer direction of travel. I'll now hand over to Sharon to touch on how this is playing out in the numbers. Thanks, Mark, and good morning, everyone. This isn't a results presentation, so I won't go into detail. But if you look at FY 2025, the progress Mark has been talking about is very evident. We're back on a growth trajectory. Revenue is up and conversions have improved despite the economic backdrop. Both adjusted EBITDA and gross profit have increased significantly over the last two years.

4:01 And more importantly, like for like sales returned to growth. The second half was stronger and we saw momentum carry into FY 2026 with sales up 9% over the festive period at the group level and plus 12% at COPPA COLLECTIVE. So the message today is that this is a company now building on strong foundations and with the acquisition is in an even stronger position to drive long term sustainable growth. The reason we're confident is the portfolio is well matched to today's market. What we have now is a set of complementary premium formats that serve different occasions and different demand patterns while staying connected by the same underlying philosophy, quality, flexibility, and strong guest experience.

4:50 That matters because consumer behavior is shifting. The operators that are winning are those who have the models that can flex across multiple revenue streams as demand moves. Across the group, we've got exposure to all day premium hospitality, destination pubs with rooms, and high quality urban Italian dining. Each of those formats is deliberately designed to generate revenue in different ways from food and drink to rooms, events, and high frequency city dining, allowing us to pivot towards the area of strongest demand at any given time. That breadth is increasingly critical in today's market. And importantly, we're disciplined in how we grow. We select carefully. We integrate profit properly. We optimize performance, and then we scale.

5:40 So moving on to our brands. COPPA COLLECTIVE is our anchor brand and our primary near term growth engine. It's built around an all day, all occasion model that reflects how people actually wanna use hospitality today. In many ways, it offers the feel of a member's club, somewhere you can work, meet, eat, drink, and socialize throughout the day, but without the barriers to entry. What's important is the COPPA COLLECTIVE is not a single format. We operate against three distinct complementary models, townhouses, copper clubs, and clubhouses. Townhouses are typically multi floor spaces in affluent towns and cities, often in beautiful historic buildings. Copper clubs are single story formats well suited to smaller towns and urban high streets.

6:28 Our clubhouses are a broader, more destination led sites often in riverside locations offering the full mix of rooms, food, drink, events, well-being. All three are rooted in their local communities and designed as flexible spaces that guests can use throughout the day in whatever way suits them. That gives us a real advantage. It allows us to take the same core brand and adapt it to different locations, different asset types, and different demand profiles, but without diluting what makes it work. And that flexibility is what drives performance. Strong coffee and breakfast trade, solid lunch and dinner, and a meaningful contribution from drinks, events, and extended stays. Each site flexes towards where demand is strongest, driving high utilization and more resilient returns.

7:19 In today's market, that breadth and adaptability is a real competitive advantage. Notchi plays a different but equally important role within the group. It's a newer, smaller brand, and the focus at the moment is on developing it. The Italian market has become increasingly polarized with operators focused narrowly on pizza or pasta. That's left a gap for a high quality complete Italian offer. Notchie fills that space. Quality ingredients, simple, confident cooking, and a menu that's generous but without being overcomplicated. Importantly, it's also a capital efficient model. A focused menu and smart kitchen design drive strong productivity. It's well suited to midsize, well located urban sites, so Nocci gives us a scalable disciplined growth vehicle within the m 25.

8:15 So on to our latest brand, Linwood. Linwood is our premium pub collection, operating at the top end of the sector. As of this week, we've completed the acquisition of three sites. Fourth, the Wellington Arms, remains subject to landlord consent. And separately, we've agreed to acquire a fifth site, the Queen's Head, subject to an AECV process. Premium pubs of rooms have proven to be one of the strongest and most resilient models in hospitality today. They're also a sector where our management team has extensive experience. They combine food, drink, accommodation events into one single destination led experience. These are aspirational pubs, not because they're exclusive, but because of the quality of experience that they deliver, fresh British seasonal food, strong design, and warm confident service.

9:06 It's a model that performs strongly across multiple revenue streams and resonates particularly well in affluent market towns and rural locations. What particularly attracted us about Linwood is not just the concept, but the economics. The four initial sites generate around £10,500,000 of revenue and approximately £1,500,000 of site level EBITDA. As we integrate them into our platform, we believe there's an opportunity to improve our performance over time. These are established businesses with loyal customer bases and importantly, the majority of freehold assets. The acquisition has been funded through a new HSBC facility. So this is a disciplined value accretive transaction that strengthens the platform and supports the balance sheet.

9:57 We now have 23 sites across the group and we're making good progress on the other two Linwood sites, which will take us up to 25. As we explained in the FY 2025 results and reflected in this map, we're carrying out work to simplify the brands around COPPA, NOTCHY and now Linwood. So Tavlino and thirty one below will become COPPA COLLECTIVE earmarked to become NOTCHY. Across all three brands, sites are concentrated in affluent resilient catchments across London and South Of England. That gives us a strong demand characteristics, operational control and brand consistency. And importantly, it provides a clear and repeatable platform for expansion. Thanks, Sharon. On to our strategy then.

10:46 As we said, our approach to growth is disciplined and selective. COPPA COPCUB remains our primary growth engine with near term site opening activity likely to be focused there. Linwood will expand as the right assets become available, and Nocchi will scale carefully as we continue to refine the model. Across all three, we apply the same filters, quality of assets, returns, strategic fit, and cultural fit. So to be clear, we're not chasing growth for growth's sake. We're taking a very measured approach, very much focused on building sustainable long term value. Underpinning all of this, as we alluded to earlier, is a much stronger operating platform. We've improved the basics, service, menus, labor, and cost discipline.

11:32 We've strengthened the leadership team both centrally and at a site level, and we've built more depth across the business. We now have the capacity to grow the estate without meaningfully increasing the central costs. So finally, to bring it all together, this is now a more disciplined, better run business. The improvements are visible in the numbers. We have three complementary premium brands, a clear and controlled growth strategy, and a credible path to long term value creation. At the same point, the external environment is creating opportunity, reduced competition, better assets coming to market, and demand is concentrating around quality experiences. So we believe this represents a compelling moment for COPPA COLLECTIVE as we enter our next phase of growth.

12:20 Our next scheduled announcement is a trading update for the six months up to the 03/31/2026, which we plan to issue next month. We look forward to updating you on our progress then. Thank you for your time today, and we're happy to take any questions. That's great, Mark. Sharon, thank you very much indeed for your presentation. Ladies and gentlemen, please do continue to submit your questions you may have situated right corner of the table. While the company take a few moments to view those questions, I would like to remind you that recording of this presentation, along with a copy of the slides and the published Q and A can be accessed via investor dashboard. Mark, Sharon, we have received a number of questions from today's meeting, and the first here reads as follows. The hospitality sector gets a lot of bad press. A lot of operations seem under pressure.

13:09 Why are you different? It's a fair challenge. We there there are still operators out there, obviously, in the industry who are succeeding. I think what's important at the moment is to have the right model for what is a changing market and a changing sort of consumer behavior. One of the advantage if we think with the portfolio we've got is that we have the breadth of offer where we can pivot to where demand lies, which is increasingly important at the moment. So, yeah, we we feel we've got the right brands, the right models to fit what is a moving market and what's a change in consumer behavior. Perfect. Thank you, Mark. The next one here is, what are you trying to build the group into? What could it look like in, say, three years' time?

14:00 A a sort of a a premium, larger, more consistent premium hospitality group with, you know, expansion within the brands that we've just identified are are are three divisions. Not growth for growth's sake, but a sort of growth upon, you know, the company which we have currently. So, you know, more consistent returns, but, you know, a continuation of this approach to good capital allocation and returns for investors. Thank you. And the next question here is, what makes the assets a specifically good fit for the operating model rather than just attractive stand alone venues?

14:49 I'll assume that one's specifically to do with the Grosvenor assets that we took for the new Linwood division. They they will retain their individual personalities, but, you know, they very much fit within an area where we already operate, playing to a same market where we throughout those Cotswold and home counties where we have a lot of strong presence and understanding of those markets, Assets that very much fit that model that we discussed earlier with the premium breadth of offer. So, you know, they they yeah. Very much sort of fit hand and glove into our strategy and our current model.

15:34 Understood. Thank you, Mark. Moving on to question on m and a strategy. Is this the beginning of a more active m and a strategy? If so, what filters do you apply? And when do model earnings accretions filtering through post ownership? I mean, we'll look at opportunities where the quality, you know, is high and and premium and fits with our, you know, current circuit. So, you know, there's not sort of one fits all. We're obviously looking on rollouts of our current brands and expanding, but it will fit within our current portfolio. The accretion of, you know, post acquisition, you know, we will look at things like stronger labor deployment.

16:20 There's obviously purchasing synergies as part of that, you know, less waste, you know, consistent ex execution at site level, etcetera. So, you know, we're we're looking to overlay and, you know, the fact that we've got a very strong management board in place that can, you know, absorb these sites as well. You know, hence, you know, we're acquiring site EBITDA. We will look to improve on those. Thank you very much, Sharon. Another one on acquisitions. Congrats on an attractive acquisition. I was wondering why you didn't buy the whole of Grosvenor pubs and inns portfolio. We did obviously have the option to look at all of the sites. We feel the deal that we managed to do for the five assets, we feel that we got five great assets, five that really suited what we were looking for, and that the deal that we managed to get for those five assets was very attractive.

17:21 Thank you. Another investor here is saying, I understand some of your larger pub peers looked at these assets you're acquiring, but felt the catchment areas were too limited to make good returns. What is your response? I mean, obviously, everybody will take their own filters to decide on where's best to allocate their their capital. We we have a lot of experience in that area. These sit in very strong catchment areas, areas that are quite resilient to some of the pressures that we're seeing with consumers at the moment. So, yeah, we're very confident, very happy with the assets that we picked up. Thank you, Mark. Moving on topics here. Do you anticipate high feed prices this year? And to what extent could you could this impact margins?

18:13 Sorry. Could I just ask you to repeat that, Alex? Yeah. Of course. So do you anticipate higher food prices this year? And to what extent could this impact your margins? Yeah. I mean, I guess since, you know, for the last sort of five or six years, we've seen inflationary pressures coming through on food. We've we've always managed to navigate our way through that. We have the breadth of offer and the flexibility that allows us to pivot where we see certain cost pressures coming through to keep that overall basket realistic. So it's nothing that we haven't navigated over the last sort of five or six years, certainly. We'll continue to take that same approach of consolidating and finding the right supply lines. We are very much focused on British fresh seasonal.

19:01 So, of course, that domestic market actually plays a bit of an advantage when when there is sort of pressures coming sort of from abroad. Perfect. Thank you. And the last question here we've got is, so far, the company has been unprofitable. What do you plan to do differently to move to company into profitability? What are your profit forecasts for the next three years? We I mean, the scale is obviously the first thing that we're moving into. We have a a very strong central team that allows us to be able to scale without materially increasing our central costs. That obviously will start to come through to conversions. So the the next phase of growth for us really is about building upon the positivities that we've seen so far so far with a company that's in like for like growth that's increasing its conversions, that it's improving its margins.

20:00 So as we scale, we will only see the benefits come through for that. Thank you. And I said that was the last question, but we have had just one come through now. And it says, walk us through your energy and food cost hedges to counter these cost headwinds. We're we're hedged on our utilities. It's probably a good good point to have done that. So we're feeling very confident with that. We can obviously bring that through to assist Linwood, our new division. With regards to food pressures, as I've said, we are working with we have a very close relationship with suppliers who help us to move and pivot wherever we need to just to keep that overall food basket within what is a manageable inflationary number.

20:49 Okay. Thank you very much, guys. That addresses all the questions for today. But, Mark, before we direct investors to provide you with a feedback, which you know is particularly important to you and the company, could I just please ask you for a few closing comments? Yeah. Just to say, you know, hopefully, you will recognize that we're a very different business. We're very disciplined about what we're doing. We've shown some real progress in the last year. We're very in a very strong position, and we think it really sort of represents a compelling moment for the company as we move into this next phase of growth. Fantastic. Mark, Sharon, thank you once again for updating investors today. Could you please ask investors not to close the session as you'll now be automatically redirected to provide your feedback, which will help the company better understand your views and expectations.

21:38 On behalf of the management team, we would like to thank you for attending today's presentation, and good morning to you all.