The fast-growing Thai tapas concept has acquired a prime site in the upmarket Clifton Village area of Bristol, known for its wealthy sophisticates and vibrant student population.
“I’ve wanted to open in Bristol for quite a while – it’s a great city with possibly the most exciting restaurant scene in the country right now – I can’t wait to become part it,” said Giggling Squid owner Andrew Laurillard.
Giggling Squid will invest around £100,000 refurbishing the Princess Victoria Street site, currently operational by an 88-seater Strada restaurant, and expects to open after Christmas, creating around 20 new jobs.
The latest opening is part of an impressive expansion plan, which has seen sales growth is 93 percent this year, compared to 65% last year and 63% the year before. Profits increased 123% in the past year. The company now employs 297 staff, up 105% on last year. The latest EBITDA figure is £1.4m
A change of bankers, from HSBC to Barclays, has created a £2 million credit facility, which combined with investment from profits, will fund further expansion for the next 7 openings.
The group expects sales to double this year and again next, as 5 of its existing sites broke trading records in August. August is normally a month when rival establishments experience falling sales when regular customers are away on holiday. Two of the existing 10 restaurants opened since August last year, whilst Hove is currently closed for repairs following flooding.
Laurillard believes that group sales have reached “exit velocity” and is actually being more cautious about the rate of expansion. He plans to de leverage the business with the new £2m loan. Although five properties are in the hands of lawyers, as with existing sites, new ones will continue to be acquired only in the right locations at sensible price.
“It’s possible to double turnover without doubling the number of outlets – and because most restaurant costs are fixed, a 15 percent rise in turnover, will often double actual net profit,” he said.
In week one this year [5th April 2014] sales were £112,000. The conservative forecast for next year is £239,000 and £412,000. That is allowing for the addition of a projection of just 5 new sites next year (mostly toward the end of the year, with a limited contribution to group sales figures) and a modest target of 4 the year after.
“We were sad to leave HSBC after a successful 12 year relationship with them. They were the only high street lender in Brighton who would fund our initial business plan for a tapas restaurant way back in 2002 and since then they have been very supportive of our growth, especially at the key moment when we set up Giggling Squid in 2008 in the teeth of the economic hurricane. However, looking forwards we felt that the business would be better served by a change of lender so support future ambitious growth plans,” explained owner Andrew Laurillard.
The move to Barclays will save Giggling Squid around 3 per cent or £24,000 per year in interest payments. It will also remove personal the guarantees demanded by HSBC.
“We pitched our business out and Barclays came back with a compelling proposal combining competitive pricing, sensible covenants and favourable repayment terms. Also, great chemistry with the team lead by Jenni Himberg-Wild who did an excellent job of persuading us that Barclays were the right partner to take us to the next level,” he said.