Breakfast Club tops list of fastest growers in eating and drinking out

Breakfast Club Canary Wharf Doctor Kluger

The Breakfast Club, the café and bar group, has topped a list of the fastest-growing companies in the UK’s eating and drinking-out market.

The business is at number one in this year’s AlixPartners Growth Company Index, the annual list of the 50 fastest-growing companies in the UK’s bar, pub and restaurant sector, compiled with specialist research and insight group MCA (formerly M&C Allegra).

Launched in London’s Soho in 2005 by Jonathan Arana-Morton and his sister-in-law Alison Rooney, the company now operates eight Breakfast Club venues, most of which feature hidden bars.

Last year, it opened its first site outside of London in Brighton as well as its biggest unit, in Canary Wharf which is home to cocktail bar Doctor Kluger (pictured). It generated a compound annual growth rate (CAGR) of 147.4% – as measured over three sets of annual accounts.

Its performance saw it take top spot in the index ahead of Krispy Kreme (145.7%) in second place and brewer and bar operator BrewDog (138%) in third.

The other operators in the top 10, in order, are Bill’s (119.6%), Leon (118.0%), Wahaca (96.0%), Loungers (76.1%), Ed’s Easy Diner (70.6%), Corbin & King (64.9%), and New World Trading Company (63.0%).

Highest climbers in the list were Wasabi, up 29 places to 18th (32.4%), and Pho, up 21 places to 29th (16.5%). The highest new entry was New World Trading Company in 10th place, closely followed in 11th place by Byron (45.9%).

AlixPartners director Paul Hemming said: “This year’s result demonstrates the sector’s ability to deliver stellar profit growth when a high-quality operation is combined with a compelling consumer offer, and rolled out.

“Breakfast Club is a great example and has been achieved alongside a commitment to corporate social responsibility that stands out in the market.

“The results also highlight the sector’s strong performance with increased levels of growth across the top 50. In 2016 compound growth of 5.5% ranks 50th when a similar performance in 2015 would have placed a business at number 36.

“Sustaining high levels of profit growth is never easy and the risks of losing consistency and standards are very real. However, there are a strong core of businesses that have featured on every profit tracker and these should rightly be lauded as the stars of the industry.”

MCA editor Mark Wingett said: “As with previous years, the 2016 AlixPartners Growth Company Index has thrown up some interesting nuances, showing continued, concerted growth for the more established brands and a further strong showing from traditional brewers and pub operators.

“It has again highlighted that a new establishment is emerging with the likes of BrewDog, Bill’s, Loungers, Hawksmoor, Be At One and Leon cementing their places.”

The tracker, which is in its fifth year, is based on analysis of three sets of individual company accounts:

Profit: the index uses underlying profit (EBITDA) with director remuneration added back in – because private companies can take widely differing approaches to directors’ remuneration depending on ownership structure. As such, this variable is removed to avoid potential distortion of the key figure being measured. The figure is also adjusted for exceptional items, although pre-opening costs do not qualify.

Timeframe: the analysis has a cut-off date of 31 January 2016. Companies that have filed their 2015 accounts at this point will have their profits measured between 2013 and 2015; those that have not filed their latest (2015) accounts, will be measured based on the accounts between 2012 and 2014.

Qualification: to be eligible, companies must have a turnover of at least £3m in their latest accounts and profit of £300,000. Businesses must be registered in the UK and be independent, unquoted and holding companies. They still qualify if they have grown by acquisition.

Result: the process produces a compound annual growth rate or “CAGR” – an average rate of growth per year, across the three sets of figures.

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