Savor Limited Analysis

Overview

Savor Limited is the listed entity of Savor Group. Established in 2011, Savor Group is one of New Zealand’s largest hospitality businesses with 13 iconic venues in Auckland, including Azabu Ponsonby, Azabu Mission Bay, Ebisu and Non Solo Pizza, each with its own unique concept, culture and offering. Savor has a reputation for originality, the quality of its products and the high standard of service that is consistent across the company portfolio.

Savor Limited (formerly Moa Group Limited) was formed at the NZX listing of the Moa Brewing Company Limited in 2012. Savor Limited acquired the operations of Savor Group in 2019 in order to obtain size and scale in the hospitality industry. Moa Brewing Company Limited was sold in February 2021 to independent interests

Performance

The following information was extracted from Savor Limited's half year results, released 22 May 2024:

Savor Limited (NZX: SVR) (“Savor”, “the Company”, or with its subsidiaries “the Group”), New Zealand’s premier hospitality group, presents its results for the financial year ended 31 March 2024.

Highlights:

• Savor’s operating earnings for FY24 were $8.8m, near the top end of the guidance range provided to the market in March.
• Savor recorded a net profit after tax of $1.9m before one-off items, compared to a loss of $0.9m in the prior year (reported net profit after tax was $0.7m compared to a loss of $2.3m in the prior year).
• Operating cash flow continued to be strong, with the Group recording $7.8m compared to $4.1m in the prior year (adjusted for timing differences).
• The Group finished FY24 with a ratio of debt to operating earnings of less than 1 times (2023: 2.17).
• The Group’s hard-fought delivery on efficiencies and costs controls improved net margin of over 4% compared to the prior year. Savor’s 2024 net margin was 14.2% (10.0% in 2023).

The Group’s cost base has been rationalised even further with many of the venue level decision making being driven out of head office which allowed for further margin expansion while holding prices static for our customers for over a year now.

Delivering a positive net profit before tax also means that Savor is able to utilise the significant historical tax losses accumulated, resulting in further cash flow benefits going forward.

The Group finished the year with a total leverage ratio of less than one to one, ensuring maximum flexibility heading into the uncertain winter trading period, building resilience and contingency into the Group’s funding structure. This has continued into the new financial year with the refinancing of the Group’s banking arrangements with ANZ, allowing for better access to funds.