Hakkasan begins to stem losses following restructuring
London-based Hakkasan Group, which runs more than 50 hospitality venues across the world, has started to stem the substantial losses it made in its last financial year, following a restructuring.
The group made several closures last year, including Hakkasan Dubai in July 2018, Yauatcha Waikiki in August 2018 and Ivory on Sunset in September 2018, after making a pre-tax loss of $42.7m (£34.2m) on revenue of $325.5m (£260.7m) in the full year to June 2018.
Alongside the restructuring, the business has also changed its accounting period from 30 June to 31 December. In its latest set of accounts for the six months to December 2018, it unveiled a $4.4m (£3.5m) pre-tax loss on revenue of $152.4m (£122m).
While the change in accounting period made it difficult to make a direct comparison in the group's performance across the two periods, the business said its turnover for the six months to 31 December "compared slightly unfavourably" to the 12 months to 30 June 2018 as a result of a reduction in revenue at owned venues in the USA following the closures there.
In the UK, revenue grew, driven by an increase in management fees related to new white-label openings that the company runs for its partners, as well as growth in food and beverage sales at its own venues. In the rest of the world, Hakkasan Shanghai saw a decline in revenue, while the loss of revenue from the closure of Hakkasan Dubai was offset by a new restaurant management agreement there.
Meanwhile, the company also pointed to an increase in adjusted earnings before interest, taxation, depreciation and amortisation (EBITDA), which rose to $10.5m (£8.4m) in the six months to December 2018, compared to $5.7m (£4.6m) for the full year to June 2018.
The business ran 52 owned and managed venues as at 31 December 2018, compared to 54 as at the end of 30 June 2018. Restaurants include venues under the Hakkasan, Sake No Hana, Yauatcha and Searsucker brands, as well as nightclubs like Omnia in San Diego and the Hakkasan nightclub in the MGM Grand in Las Vegas.
In a statement accompanying the group's financial results, director Matthew Hurn said: "The six months to 31 December 2018 has been a period of stabilisation and restructuring within the owned brand portfolio and corporate offices. The group streamlined the portfolio with the closure of certain underperforming venues. There was growth in our managed portfolio, as a pop-up Hakkasan restaurant venue was opened with a development partner in Dubai, United Arab Emirates, in September 2018."
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