The Breakfast Club cuts costs in a bid to improve performance
In financial accounts for the year ended 31 March 2023, Catsteps Cafes, which operates the Breakfast Club brand, reported a small reduction in operating losses as well as a rise in turnover.
The company lost £947,442 in the period compared to a loss of £1,053,234 the previous year with EBITDA falling to a loss of £75,887 compared to an EBITDA of £37,529 in 2022.
Turnover across the group improved, increasing by 17% from £15.4m to £18m.
The 17-strong group said that it had faced further challenges in the supply chain and utility pricing impacted by the war in Ukraine and for the first six months of the financial year reported a significant EBITDA loss. To address these challenges, a restructure of central costs was implemented removing £600,000 from its cost base, it says.
The second half of the year from October 2022 onwards saw the company return to monthly EBITDA profitability, delivering £438,000 of EBITDA for the last six months of the financial year, it reports.
Cost reviews across the business were also carried out, resulting in gross profit improving from 73.2% in April 2022 to 77.5% in March 2023.
“Whilst the first half of FY23 may have started out with some considerable challenges, the business has responded and met those challenges which has led to a significant improvement in financial performance over the last 18 months which has allowed us to expand the business in FY24,” the company says in its financial report.
The Breakfast Club operated thirteen sites during the reporting period, and has since opened a further two sites in central London, in Covent Garden and Soho.
The group says that both sites have started trading and that it is ‘buoyed by their early success’.
It also opened its first franchise site at Gatwick airport in partnership with SSP, in what it described as ‘one of the most exciting developments during the year’.
Two further sites are set to open with SSP this summer.
Post year end, the business sold its Battersea Rise restaurant after it failed to return to pre-pandemic sales levels, and says it is instead looking to re-invest in more central locations.
