The business that runs bar brands Banyan, Box and Manahatta stated in its 12-month accounts for its financial year (FY) ended 31 March 2022 it has received a £19m investment from the Business Growth Fund (BGF) for a minority stake that will pave the way for Arc Inspirations to double in size in the next three to five years.
Highlights in its accounts include record group sales and profits of £38.9m and £7.5m (adjusted EBITDA (earning before interest, taxation, depreciation and amortisation)); strong recovery from Covid; a pipeline of five new sites to open in 2023; appointment to board of first ever ‘people and culture director’; and two awards at The Publican Awards.
Co-founder and CEO Martin Wolstencroft said: “This was an exceptional and transformational year for our company. We started it with significant restrictions still in place during the first quarter, and we ended it by posting record sales and profits, concluding a new growth partnership with BGF, and being awarded two industry ‘Oscars’ – for best managed company and best operations team.”
No restrictions
He continued: “This is a testament to our team and culture. We are now able to contemplate a year without any trading restrictions for the first time since 2019. While clearly challenges remain, the business is extremely well-positioned with a clear growth plan, an exceptional pipeline of new sites, strong customer brands and two new strategic partnerships, which when combined will enable the business to capitalise on market opportunities over the next five years.”
On its success, the company said it was “remarkable” that despite trading under some level of restrictions for approximately half of our FY, it had produced record numbers for the period with sales of £38.9m and underlying profits of £7.5m. It added this was significantly ahead numbers in the year to March 2020 which, bar a few weeks, was before the pandemic impacted our business, with sales up 27% versus that period, and like-for-like sales up 18% (versus year to March 2020). It said: “When our business was allowed to trade restriction-free, from 19 July to 12 December, sales were up 37% on the same period prior to Covid (in the financial year to March 2020).
“Our strong momentum has continued into the new financial period (FY23), with like-for-like sales in Q1 up 19% compared to the same period prior to Covid (April-June 2019).”
Arc Inspirations has appointed Nazareen Johnson as its people and culture director, who has had “an immensely positive impact on our business since joining in August 2021”.
Two financing deals
On its pipeline, the company has made two key strategic partnerships during the year. Firstly, a new banking agreement with HSBC, including a separate £5m facility for capital investment. Then, in March 2022, it agreed a landmark deal with BGF – one of the UK and Ireland’s most active investors in growth companies – which saw £19m injected into the business in return for a minority stake.
Arc said: “Our expansion is set around our cluster model; operating our three high-quality premium and complimentary brands Banyan, Box and Manahatta in close proximity to each other. This approach is best illustrated in Leeds and Manchester city centres, where our three growth brands operate very successfully within a radius of a few hundred metres.
“We have identified five new prime sites in key cities to our property pipeline, which are expected to open in the current year. As a result, we will open three new Manahatta cocktail bars, in Newcastle, Nottingham and Sheffield; and two new Box premium sports bars in Nottingham and Birmingham.
“We continue to seek more site-growth opportunities in key cities across the country, with our plan to double the size of the business in the next three-to-five years.”
The business operates eight Banyan venues, seven Manahatta sites and three Box sports bars.
