Annual Report 2016 - Azzurri Group

1 - Annual Report 2016 -OverviewBusiness reviewGovernanceFinancial statementsAzzurri Group Limited Annual Report and Accounts 2016 ContentsThe Azzurri Group is a market leader in the Italian casual dining sector, operating ASK Italian, Zizzi and Coco di Mama. The Group employs nearly 6,000 people, serving over 15 million meals a year in our growing estate of over 260 restaurants and s core brands ASK Italian and Zizzi are highly complementary, appealing to a broad customer base and lending themselves to different occasions. Both ASK Italian and Zizzi offer a memorable dining experience and great value for money, with typical spend per head (including value added tax) averaging 19. Brand reviews are included on pages 6 to 13. In April, the Group opened its first international site, opening its first Zizzi in the Republic of Ireland in Dundrum.

2 Further details are included within the Zizzi review on pages 10 to during the period under review, the Azzurri Group further strengthened its estate through the acquisition of Coco di Mama, one of London s fastest growing quick service food brands, offering a range of quality hot and cold Italian grab-and-go food, with a speciality in hot pasta and quality coffee. Further details are provided on page 2016 highlights03 Azzurri s brands04 Azzurri s strategy05 Chairman s statementBusiness review06 ASK Italian10 Zizzi14 Coco di Mama16 Financial review Governance18 Board of Directors 19 Strategic report21 Directors report24 Corporate governance report26 Independent auditors reportFinancial statements28 Consolidated profit and loss account29 Consolidated statement of comprehensive income30 Consolidated balance sheet31 Company balance sheet32 Consolidated statement of changes in equity33 Company statement of changes in equity34 Consolidated cash flow statement35 Notes to the financial statements67 Corporate Group Limited Annual Report and

3 Accounts 20162016 highlightsFinancial summary Total sales + year on year growth Adjusted EBITDA+ growth Capital investment (including premiums)+ growth Operating cashflow+ growthBusiness highlights Acquisition of Coco di Mama20 New openingsRepublic of Ireland First international Zizzi opened in Dundrum27 Transformations and refurbishments OverviewBusiness reviewGovernanceFinancial statements2 OverviewBusiness reviewGovernanceFinancial statementsAzzurri Group Limited Annual Report and Accounts 2016A zzur r i s brandsWe take our passion for simple, delicious Italian food and add a constant stream of fresh inspiration to make each dish individual and combine this with our love of art and design to create restaurants with personality and depth of character not seen in any other restaurant we do here from classic dishes to show stopping signatures.

4 Warm service to quintessentially Italian interiors is so that you can enjoy eating together as much as the Italians Coco di Mama, everything we do is focused on concentrate on simple, flavoursome and delightful dishes, combined with great service we re confident you won t find such value anywhere 112 New this year 4 Employees 2,300 Average spend per head 19To read more about ASK Italian restaurants please go to pages 6-9 Restaurants 145 New this year 11 Employees 3,400 Average spend per head 19To read more about Zizzi restaurants please go to pages 10-13 Shops 11 New this year 5 Employees 120 Average spend per head 4To read more about Coco di Mama shops please go to pages 14-15 OverviewBusiness reviewGovernanceFinancial statements3 Azzurri Group Limited Annual Report and Accounts 2016 Our strategy is to strive to be the leading Italian Food business in the UK, through: Running great restaurantsDrive growth in profits from existing restaurants through.

5 Continual innovation and evolution of the proposition improved operational focus on restaurant basics to deliver quality and value to our customers use of increasingly sophisticated marketing techniques to engage with our customers and encourage frequency of visit proactive management of our cost base to continually improve margins Expansion Grow the core business through the roll-out of our key brands as well as exploring new and international markets Innovation Seek to add further incremental business through new concepts and other revenue streamsAzzurri s strengthsOutstanding: Brands Quality Service Value People & culture Trading record Growth potentialA zzur r i s st rateg yOverviewBusiness reviewGovernanceFinancial statements4 OverviewBusiness reviewGovernanceFinancial statementsAzzurri Group Limited Annual Report and Accounts 2016 Chairman s statementThe last 12 months have seen further significant progress on all fronts for the Azzurri Group .

6 Like-for-like revenue growth, new openings and EBITDA growth in our core brands, Zizzi and ASK Italian, have been complemented by the acquisition of the growing fast casual brand, Coco di Mama in July last year and by our very first overseas site, Zizzi, opening in Dundrum, Republic of Ireland, in a market backdrop of sharp increases in new restaurant openings, Azzurri has successfully continued to grow. This has been achieved through the strength of our brands, further investment in our restaurants and people, and innovation in our menus. Our partnership with Deliveroo, which started in June 2015, has enabled us to reach customers through the growing home delivery market. Since the majority acquisition of Coco di Mama, we have worked with the Founders to develop one of the most exciting up-and-coming brands in the grab-and-go sector.

7 The business has doubled in size during Azzurri s ownership with ambitious plans to continue that journey. None of this could have been achieved without the dedicated leadership of the Founders, who have remained with the business, and who have managed to preserve Coco di Mama s unique culture while at the same time embarking on a period of such ambitious our first site in the Republic of Ireland, this year Azzurri opened 11 new Zizzi sites and 4 new ASK Italian restaurants, alongside 5 new Coco di Mama stores. We have resilient businesses and strong brands, which, together with the capability and dedication of our teams, leave us well positioned for the future. The versatility of Zizzi s brand has enabled it to open a third location in Cardiff and a fourth in Manchester, while also securing Azzurri s first site in Westfield London.

8 ASK Italian, with a site at The O2, secured its first opening in London since 2003 as well as openings in Taunton, Newcastle and cornerstone of the success of ASK Italian and Zizzi over recent years has been continued reinvestment in sites and the evolution of the brand and proposition. 27 restaurants were refurbished during the year, meaning that every site in the estate has received investment within the last 6 years. Both Zizzi and ASK Italian evolved their designs further this year, launching a new look-and-feel with outstanding will continue to invest in new and existing sites across all of our brands in the coming year. Additionally, we are developing plans to launch an additional restaurant brand, from start-up, in the next few months.

9 Radio Alice is planned to open in November 2016 a high quality, fast casual pizzeria, which will further strengthen our portfolio of has been another year of huge progress for Azzurri and its component businesses. Looking forward, the referendum result has created uncertainty in the economy, although this has not impacted our performance to date. We have resilient businesses and strong brands, which, together with the capability and dedication of our teams, leave us well positioned for the future. Harvey SmythChairmanOverviewBusiness reviewGovernanceFinancial statements5 Azzurri Group Limited Annual Report and Accounts 20166112 Restaurants 4 New reviewGovernanceFinancial statementsAzzurri Group Limited Annual Report and Accounts 20167 OverviewBusiness reviewGovernanceFinancial statementsA transformed estate and a stronger brandThis year was another highly successful year for the ASK Italian brand and saw the completion of our major repositioning programme that commenced in 2010.

10 Our estate now fully reflects this modernised design, and the latest refurbishments continue to deliver the same excellent on the success of our prior year new openings in high profile sites such as Manchester and Edinburgh, we opened a further 4 new restaurants all in similarly prime locations. Our look has continued to evolve and we have enhanced our design giving us the confidence to commence a new programme of major transformations that will replicate the key food, service and design elements and fuel our future development and investment in our food, people and service has resulted in further positive have been more successful than ever at engaging with our customers through focused promotions and campaigns. Through the use of sophisticated segmentation and targeted marketing, combined with our continued focus on restaurant basics and strong operational controls, we were able to deliver another strong year of profit the estateWith an additional 4 new openings, we now have 112 ASK Italian restaurants trading across the UK.