Barkby Group PLC Trading Statement (0732I)

TIDMBARK

RNS Number : 0732I

Barkby Group PLC

10 August 2021

10 August 2021

Barkby Group PLC

("Barkby", the "Group" or the "Company")

Trading Update

Barkby Group PLC (AIM:BARK), the diversified business group, provides the following update on trading for the 12-month period ended 30 June 2021.

Commenting, Charles Dickson, Executive Chairman, said;

"The Group is now benefitting from the easing of COVID-19 restrictions and expects to return to profitability for the current financial year. Since the easing of lockdown restrictions on the 17 May, we have seen consistently strong trade across the pub business with the Group benefitting from pent up demand and a UK staycation boom.

Activity within the property development business has picked up significantly with six agreements to lease exchanged or in legals.

The Group's investments in SleepHub and Verso Biosense continue to make positive progress and we expect to see these mature over the next 12 months."

Operational Highlights

   --      Barkby Pubs 

o Return to positive cash generation in final quarter of the financial year.

o Pubs materially impacted by COVID-19 and national lockdown, but have traded ahead of expectations between 17 May and 30 June 2021, when restrictions in England were eased.

o Acquisition of a six-year lease of The Ebrington Arms.

o Trade for July 2021, post period end, has been extremely strong with like for like sales up 97% on the same period last year and up 10% on the equivalent period in 2019.

o Actively looking for further opportunities to add to our growing pub portfolio.

   --          Commercial Property Division 

o Enhanced planning permissions granted at Wellingborough and Saffron Walden, with a consequential uplift in value at Saffron Walden, which will flow through into the current financial year.

o New planning permission granted for 32,000 sq.ft. scheme at Huntingdon.

o Exchanged 15-year agreement to lease with Costa Coffee Ltd. at our Maldon scheme.

o A further five agreements to lease, across various sites, are currently in solicitor's hands.

   --          Life Sciences 

o Verso Biosense gained MHRA approval and has commenced a clinical study with University of Southampton.

o Successful launch of SleepHub in Europe, Australia and USA with strong demand from suppliers.

Financial Highlights

-- We expect Group Revenue for the 12-month period to 30 June 2021 to be GBP15.3m (FY 2020 - GBP12.0m). Due to the impact of COVID-19 trading restrictions, we expect this will result in an EBITDA loss of GBP1.6m before Cambridge Sleep Science startup costs of GBP0.9m (FY 2020 EBITDA loss of GBP1.7m).

-- Liquidity of GBP1.6m available as at 30 June 2021, the Board continues to maintain the support of its major shareholders.

Charles Dickson, Chairman of Barkby, said:

"I am delighted to say that trading in Barkby Pubs has been particularly strong since the easing of the government restrictions and the business has returned to positive cash generation. We have expanded our portfolio of high-quality pubs with accommodation to now include the Ebrington Arms in Ebrington, Gloucestershire. We continue to pursue further opportunities to expand the portfolio.

Our cash generative Commercial Property Development business has helped Barkby to weather the storm of COVID-19. The division is seeing strong momentum, with six agreements to lease exchanged or in legals. We are also currently in legal negotiations to acquire two further sites.

I am particularly excited by the progress of SleepHub during the period. We have had strong sales interest from distributors and I am pleased to say we have developed relationships with well known consumer brands including British Airways and Virgin Atlantic. The product is also now available on both Amazon and eBay. Cambridge Sleep Sciences continues to develop its proprietary technology and is in the process of building a second generation of SleepHub products.

The easing of government restrictions and the recovery of the UK economy will continue to benefit the Group. We look forward to the future with confidence, knowing that we have a highly diversified business with significant growth opportunities."

I am extremely proud of the way my colleagues have navigated the Group through the pandemic, and we are now seeing strong trading with the government restrictions fully lifted."

Current Trading

Since the easing of national restrictions on the 17 May, the Group's businesses have all resumed trading and we have been very encouraged by the performance within our business divisions. All divisions have started the new financial year well and activity within the property development business is returning to pre-pandemic levels driven by occupier demand. Centurian is trading in line with management expectations and activity within our Life Sciences business is continuing to make good progress. Trade at the Barkby pubs for July 2021, post period end, has been extremely strong with sales up 97% on the same period last year benefiting from pent up demand and boom in staycations with accommodation revenue up 25%, on a like for like basis, compared with the same period in 2019.

Barkby Pubs

The final six-month period of the year was again heavily impacted by COVID-19 related restrictions, with pubs closed for the majority of the period. Trading restrictions began to ease in mid-April when we re-opened all pubs for outdoor food and drink only. Despite a positive opening weekend, poor weather resulted in disrupted trading in April. From 17 May we welcomed customers back inside with a maximum group size of six or two households.

Given the disruption leading up to the summer, the second half of May and June were overall a very positive trading period with the business returning to both positive cash generation and profitability for the final quarter of the financial year. Forward order bookings are strong, and we are optimistic of a sustained period of good trade and profitability over the summer months as we benefit from the pent up demand and UK staycation boom.

We entered a new lease at the Ebrington Arms, an award-winning pub located in the Cotswolds, which we began trading on 30(th) June. Opening trade was very strong with GBP23k of sales in its first full week.

Commercial Property Development

Since the Group's interim results, there has been significant progress as the economy has recovered from national lockdown.

Wellingborough

On 15 July 2021 we obtained a further planning permission for a 14,100 sq. ft. mixed use retail and trade scheme incorporating a drive thru on the front of the site. We have two agreements to lease in legal process and strong interest in the remaining units. Construction is due to start in late 2021.

Maldon

We expect to obtain planning permission this month for a 15,400 sq.ft. mixed use trade and retail scheme at the end of August. We have now exchanged contracts with Costa Coffee Ltd. on a 15-year agreement to lease at a rent of GBP82,500 per annum. We are currently in legal process with two further prospective tenants and have strong interest in the final unit. We are planning to start construction in late 2021.

Huntingdon

We have been granted planning permission for a 32,000 sq. ft mixed use retail and trade scheme. We are in legal process on an agreement to lease from a national retailer on the first unit and have strong interest in the other unit.

Saffron Walden

The land was acquired by the Company in 2010 and is still held at book cost. A series of successful planning applications have been made since the land was acquired, and the site now has planning permission for the construction of 35 residential units.

A further planning enhancement that has reduced the affordable housing allocation from 14 units to 7 units has materially increased the value of the site. Although we had exchanged contracts to sell the site for GBP2.85m with a resulting profit on sale of GBP1.8m, our buyer does not wish to proceed due to the valuation uplift. We have therefore instructed agents to conduct a full marketing process. The site is ready for sale therefore we expect to complete the sale this calendar year.

Further opportunities

We are currently in legal negotiation to acquire two further development sites. We continue to explore opportunities to expand the real estate business, which we believe is core to the Group's business and where we see significant growth opportunities.

Life Sciences

Cambridge Sleep Sciences Ltd ('CSS')

SleepHub delivers scientifically formulated sounds to aid sleep, delivered through a patent protected base unit and pair of specifically tuned speakers. It was launched in November 2020 and as of 31 July 2021 a total of

534   units have been sold. 

Due to COVID-19, the bricks & mortar retail channel have been slow to adopt new products and e-commerce partnership agreements have been delayed. As bricks and mortar retail reopens, we are starting to discuss product placement with a number of UK retailers for an anticipated Q1 2022 launch.

Alongside established sales partnerships with British Airways, Virgin Atlantic, Defense Portal and Blue Light Card, we have recently launched on Amazon, eBay and Walmart's online store. We have a strong pipeline of potential new sales partners, with occupational health becoming a key focus. We have three separate partners in this area launching in Q4. Recent partnerships include Lumia3 and Nexus Digital.

Internationally, SleepHub has experienced strong sales and interest from North America and Australia. SleepHub has been purchased by a leading sleep clinic and an online retailer in the US, with a CPAP supplier launching in Australia and further distributors being signed up to increase the offering in this regional market. Our online sales into both regions continue to grow and are expected to increase as the product is made more widely available in local markets.

We are exploring licensing opportunities for the IP of SleepHub. We have had discussions with potential partners and see this as a significant revenue source as we develop the IP further. SleepHub is currently being tested by a major phone manufacturer and a global bed manufacturer.

CSS is currently developing a second generation of SleepHub products and expects these to be available in late Q4 2021. These will likely include wireless earbuds/headband, our own App and further technology enhancements to the product experience. This will also allow SleepHub to offer partner branding opportunities to corporate clients.

There are significant opportunities in the Healthcare space and CSS has started a further clinical study to validate the benefits of our technology. We have also stared trialing the device in disease areas where insomnia is a significant symptom. Our initial user trial with Parkinson's sufferers has been expanded with the sleep gains experienced continuing to be positive.

Verso Biosense Ltd (formerly known as Vivoplex)

In May 2021, Verso Biosense received approval from Medicines Health products Regulatory Agency ('MHRA') for the initiation of the first clinical study for its groundbreaking uterine sensing device and biosensing data platform.

Verso's first-in-class product monitors three key parameters in the uterine environment - oxygen, temperature and pH, for an extended period of time. These parameters are fundamental in embryo development and are tightly controlled in embryo culture for in vitro fertilisation (IVF). Verso's product and data platform continuously captures critical in-vivo, biosensing data to provide actionable insights for clinicians and patients on the IVF journey. Verso's product will facilitate optimisation and personalisation of fertility treatment.

The study, which is supported by the UK NIHR's i4i Programme in a joint project with the University of Southampton, aims to demonstrate the effective and safe use of this novel, wireless powered, uterine monitoring device in women of reproductive age. The study will test the Verso biosensing device in 20 women continuously over a seven-day period and is being conducted at the Princess Anne Hospital in Southampton. The successful conclusion of this study will enable Verso to apply for a CE mark on its first product, we expect this to be granted in 2022.

Liquidity

We have managed cash tightly through all three national lockdowns and we increased cash headroom by refinancing the current GBP3.5m Tarncourt facility into a new GBP5m facility with Tarncourt earlier this year, with an expiry of 30 June 2023.

The Group currently has available funding of c.GBP1.6m as at 30 June 2021. The Board have the full backing of its major shareholders, who have confirmed their continued support should the Board wish to raise further capital to take advantage of attractive growth opportunities.

Enquiries:

 
Barkby Group PLC 
Charles Dickson, Executive Chairman 
 Douglas Benzie, Chief Financial Officer 
 
                                              [phone] 
finnCap Ltd (Nomad and Broker)                 0500 
Carl Holmes/Simon Hicks (corporate finance) 
 Tim Redfern/Richard Chambers (ECM) 
 
                                              [phone] 
Camarco (Financial PR)                         4994 
Jennifer Renwick/Jake Thomas 
 

Notes to editors

Barkby Group PLC is a diversified group of high growth, high quality businesses run by an entrepreneurial and experienced management team. The existing wholly owned businesses within Barkby include; Commercial Property Development, Barkby Hospitality (comprising Barkby Pubs and Workshop Coffee) and Centurian Automotive Ltd.

In addition to these businesses, Barkby Life Sciences has invested in Verso Biosense, a digital health company aiming to transform Women's Health with precision medicine, and its subsidiary Cambridge Sleep Sciences Ltd has launched, SleepHub(TM), a device which improves and facilitates natural sleep.

Barkby's strategy is to accelerate and maximise opportunities within its existing businesses as well as continue to source and invest in cash generative, growth businesses with the ability to disrupt.

This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 ("MAR"), and is disclosed in accordance with the company's obligations under Article 17 of MAR .

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August 10, 2021 02:00 ET (06:00 GMT)