Transcript Slide 1

Investor Presentation
November 2013
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What We Do
•Meat based retailer with 20 retail stores in Yorkshire,
Lincolnshire, Nottinghamshire & Derby
• Vertical integration. In house processing, warehousing and
logistics (2 factories)
• Varied product offer, Competitive pricing, Loyal customer
base.
• 65% Raw Meat; 35% hot food to go
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Retail stores
8 Legacy Stores - 45% of total sales.
Individual shop performance is
extremely consistent with a very
loyal customer base.
4 Markets - 13% of total sales. Markets in city
centres continue to trade well, whilst footfall to
smaller town centre based markets has been on
the decline in recent years.
8 Newer stores -42% of total sales. All
new stores are now running at
profitable levels.
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In House Processing & Distribution
Cold storage
Frozen storage
Cutting
De-boning
Packing & labelling
Wholesale &
catering
Sausage & burger
production
Own fleet of
refrigerated trucks
Delivery to own
stores & catering
customers
Capacity to double
throughput
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Retail Proposition
•Product Variety, Quality & Value
• Pre packaged meats sold in multi deck displays. Up
to 40% cheaper than the supermarkets.
• Hot cooked preparation/hot & ambient serve over
counters – lunchtime takeaway & meals to take
home
• Key lines plus products on offer constantly changing
•Quick distribution/turnover on promoted goods
•Mix & Match Multi Buy Offers
•Satisfied customers returning each week
•Special offers communicated outside front of store
•Market trader experience on the high street
•Tried and tested customer recruitment method
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Varied Product Offer
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Customer Feedback
• 40% of customers say the recession did affect their
meat buying habits – most reduced the amount they
spent on meat by either
1. Shopping less frequently and making purchases
last longer.
2. Buying cheaper cuts
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90%+ of customers highly rate our quality and value
for money – which is an exceptional performance
underlined by the loyalty of our customer base.
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Key points – Interim results to July 2013
• Like for Like (LFL) sales up 5% in the 6 months to the end of July
(2012 : +4%).
•Overall sales have increased to £9.8m (2012 : £9.3m).
•Gross profit increased 6% to £4.3m (2012 : £4.1m).
•Gross margin up at 43.9% (2012 : 43.6%).
•EBITDA significantly improved at £0.5m (2012 : £0.3m).
•PBT up 3 fold at £0.3m (2012 : £0.1m)
•Earnings per share up to 0.473p (2012: 0.155p)
•Interim cash dividend announced at 0.09 pence per share
•Generated £0.5m cash in the 6 months to 31st July, 2013 (2012: £0.3m)
•Net Cash position £0.3m (31st January 2013: £Nil)
•We are encouraged with current trading, like for like sales for the first 8
weeks of the second half are up 10% with gross margin in line with first half
performance.
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Why Are We Doing Better?
•Management have introduced
o Improvements in IT communications, sales reporting and
analysis
o CCTV installed and monitored in each store
o Clocking systems at each store
o Assistant Manager Training
o Sales promotions
o Wastage Management
•External factors are relatively stable – Input Prices and product
availability.
•Trading environment is better - Customers still want value but
appear to have more money to spend.
• No adverse weather in the period restricting footfall in town
centers
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New Store Openings
8 new stores opened between July 2008 and February 2011
Lessons learned :
• High cost of capex, coupled with difficulty in predicting relevant
footfall.
• High level of expertise required in store to butcher, pack, sell,
cook, manage stock, hygiene & wastage, means that new recruits
take time to settle in.
• The larger format stores in major town centre locations are the
most profitable and are showing the best returns on capital
employed – based on an initial capital outlay of £350k payback
occurs within 2 to 3 years
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Opportunities for 2013 and beyond
Continue to drive performance going forward via:
Quality of the Hot Food Offer to improve footfall
o Training programme for cooks to improve consistency &
quality
o Area Supervisor employed to audit standards
o New sandwich offer introduced
Improving the training and succession planning for
shop managers
o The best managers can improve results dramatically
o New Assistant managers have been identified and trained
o Apprentices are being employed & trained.
Using tactical promotions to improve sales
o Sellers employed at stores to improve turnover
o New Pack sizes introduced – 3 for £20
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Growth Strategy 1
Why current format presents roll out challenges?
o High Capex
o Affordable high footfall sites
o Complex operational requirements requires skilled
management and time to establish.
o Break even point relatively high
Challenges
Higher
Risks
Controlled
expansion
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Growth Strategy 2
We are currently developing a new model which
addresses these issues:
“ HOT FOOD TO GO” only
• Operationally simpler to manage
• Most food prep done centrally
• Fewer food safety issues
• Better consistency of quality
• Less local complexity
• Fewer retail staff
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Growth Strategy 2 (Continued)
• Higher returns possible
• Much lower capex
• Smaller retail footprint
• More cost effective
• Lower break even point
• Opportunity to open more stores & scale more quickly
PLEASE BE AWARE THAT THIS IS ONLY A CONCEPT AT THIS
STAGE. We are testing the commercials and evaluating the layout,
capex and operational costs. Success is yet to be tested.
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Appendix – Listing & Board details
AIM Listed PLC April 2008
• Large Institutional shareholders
Isis
Henderson
Unicorn
Schroders
• Directors holding
32%
9.1%
8.8%
8.5%
5.5%
32%
Board Members
Richard Rose( Chairman) –Chairman at Booker, Anpario and DRL(AO.com)
Kevin Boyd (Managing Dir) –started as a butcher/manager at Crawshaws
Lynda Sherratt (Finance Dir) –previously Littlewoods & Ford
Colin Crawshaw (Buying Dir) –pre listing owner/manager of Crawshaws
Mark Naughton-Rumbo (Non Exec) –previously CEO Whittards.
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