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 20 November 2024:

Half Year results

Savor’s earnings for the first six months of FY25 were impacted significantly by the closure of Non Solo Pizza for renovations and the Seafarers business, as outlined at the Annual Shareholders Meeting (‘ASM’) in September 2024. Adjusting for the impact of these events, revenue for the half year was $25m, down only 6.5% compared to the prior year of $26.7m, a pleasing result given the challenging market conditions.

Operating earnings were $2.5m when adjusted for the same events, a decrease of 15.7% compared to the prior year of $3m.

Savor recorded an adjusted net loss after tax of $0.4m before one-off items, compared to a loss of $0.2m in the prior period (reported net profit after tax was $1.1m compared to a loss of $0.4m in the prior period).

The Group’s variable cost base continues to improve proportionally to revenue. With employee costs for the half year being approximately $1.7m less than the same period in the prior year and the bulk of the trading to come over the summer months these efficiencies will continue to improve bottom line results. This has been pleasing to deliver, given the significant challenges facing the wider market, and demonstrates the economies of scale of the Group with suppliers and the planning and monitoring tools available to maximise our labour base.

Savor is continuing to review each business unit to ensure its profitability warrants the overhead allocation as we look to both simplify the operations and grow the top and bottom lines. As part of this process the Group expects to vastly simplify the Group overhead structure and result in further cost savings.