NOHO PARTNERS PLC’S HALF-YEAR REPORT 1 JANUARY–30 JUNE 2022: The
best quarter in the company’s history – turnover and profitability
at record-high levels
NoHo Partners PlcHALF-YEAR REPORT 9 August 2022 at 8:15 a.m.
NOHO PARTNERS PLC’S HALF-YEAR REPORT 1 JANUARY–30 JUNE
2022
The best quarter in the company’s history – turnover and
profitability at record-high levels
APRIL–JUNE 2022 IN BRIEF
Entire Group
• Turnover increased by 161.5% to MEUR 90.2 (MEUR 34.5). • EBIT
increased by 991.2% to MEUR 16.1 (MEUR -1.8). • The EBIT percentage
was 17.9% (-5.2%) • The result for the financial period was MEUR
10.5 (MEUR -4.3), an increase of 347.4%. • Earnings per share were
EUR 0.45 (EUR -0.18), an increase of 349.0%. • Operational EBITDA
increased by 2,533.4% to MEUR 18.3 (MEUR 0.7).
JANUARY–JUNE 2022 IN BRIEF
Entire Group
• Turnover increased by 153.8% to MEUR 138.7 (MEUR 54.7). • EBIT
increased by 228.4% to MEUR 14.8 (MEUR -11.5). • The EBIT
percentage was 10.7% (-21.1%) • The result for the financial period
was MEUR 7.0 (MEUR -15.0), an increase of 146.5%. • Earnings per
share were EUR 0.27 (EUR -0.67), an increase of 140.8%. •
Operational EBITDA increased by 422.7% to MEUR 19.4 (MEUR
-6.0).
Unless otherwise stated, figures in parentheses refer to the
corresponding period last year.
KEY FIGURES |
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NoHo Partners Group, total |
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(MEUR) |
1 Apr.-30 Jun. 2022 |
1 Apr.-30 Jun. 2021 |
Change |
1 Jan.-30 Jun. 2022 |
1 Jan.-30 Jun. 2021 |
Change |
1 Jan.-31 Dec.2021 |
Turnover |
90.2 |
34.5 |
161.5% |
138.7 |
54.7 |
153.8% |
186.1 |
Operational EBITDA |
18.3 |
0.7 |
2,533.4% |
19.4 |
-6.0 |
422.7% |
11.3 |
EBIT |
16.1 |
-1.8 |
991.2% |
14.8 |
-11.5 |
228.4% |
-0.9 |
EBIT, % |
17.9% |
-5.2% |
|
10.7% |
-21.1% |
|
-0.5% |
Result of the financial period |
10.5 |
-4.3 |
347.4% |
7.0 |
-15.0 |
146.5% |
-10.3 |
Earnings per share (EUR) for the review period attributable to the
owners of the company |
0.45 |
-0.18 |
349.0% |
0.27 |
-0.67 |
140.8% |
-0.55 |
Interest-bearing net liabilities excluding IFRS 16
impact |
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126.9 |
163.7 |
-22.5% |
151.9 |
Gearing ratio excluding IFRS 16 impact, % |
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138.7% |
231.3% |
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203.1% |
Material margin, % |
75.1% |
74.0% |
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74.8% |
72.8% |
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74.4% |
Personnel expenses, % |
31.9% |
37.0% |
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34.0% |
41.2% |
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36.0% |
FUTURE OUTLOOK
Profit guidance as of 22 June 2022:
NoHo Partners estimates that, during the financial period 2022,
it will achieve total turnover of approximately MEUR 300 and an
EBIT margin of over 8% in the restaurant business.
The Group’s long-term guidance remains unchanged: The Group aims
to achieve turnover of approximately MEUR 400 and an EBIT margin of
approximately 10% during 2024. The company aims for the ratio of
net debt to operational EBITDA, adjusted for IFRS 16 lease
liability, to be under 3 and for dividends to be paid during the
strategy period 2022–2024.
The company published its last monthly report on the development
of its business for June 2022. Going forward, the company will
report on the development of its business and publish financial
information on a quarterly basis.
Previous profit guidance (10 May 2022):
NoHo Partners estimates that, during the financial period 2022,
it will achieve a total turnover of approximately MEUR 300 and an
EBIT margin of approximately 7% in the restaurant business.
The Group aims to achieve turnover of approximately MEUR 400 and
an EBIT margin of approximately 10% during 2024. The company aims
for the ratio of net debt to operational EBITDA, adjusted for IFRS
16 lease liability, to be under 3 and for dividends to be paid
during the strategy period 2022–2024.
The Group will update the estimate for the next financial period
on an annual basis in conjunction with the publication of the
financial statements release. The company will provide monthly
reports on the development of its business during the second
quarter of 2022.
The market
The COVID-19 pandemic has had a significant impact on the
company’s business operations, market and the restaurant industry
as a whole. In the first quarter of 2022, the company operated in a
highly restricted or closed business environment in all of its
operating countries. Following the lifting of the restrictions,
private consumption in restaurants recovered rapidly and demand in
the second quarter was strong as the market normalised. Corporate
sales and event sales have recovered gradually.
The business outlook for the tourism and restaurant sector has
improved as the pandemic has eased, but the outlook and consumer
confidence have been weakened by the uncertain geopolitical climate
and the general rise in costs. The company will continue to take
active measures to prepare for potentially rapid changes in the
market situation by actively monitoring operational efficiency and
pricing points, using centralised procurement agreements and
engaging in regular dialogue with suppliers and other partners. In
spite of the uncertainties in the market, the company expects the
demand for restaurant services to remain at a good level during the
rest of 2022.
In a normal operating environment in the restaurant business,
most of the profits are made during the second half of the year due
to the seasonal nature of the business.
REVIEW BY THE CEO
The second quarter of 2022 was the first period to be free of
business restrictions in the company’s markets since 2019. The
measures taken over the past two years to develop the Group’s
restaurant portfolio and improve the cost structure are now fully
evident as demand and volume grow. All of the Group’s key figures
are now at a higher level than before the COVID-19 crisis. Our
relative profitability for the quarter was high at 17.9%. That
figure includes MEUR 4.3 in compensation paid by the Finnish state
for the business restrictions that were in place in
January–February, which was recognised during the review period.
Without the compensation received from the state, the Group’s EBIT
percentage was at an all-time high of 13.1% in the second
quarter.
The excellent profit performance was driven by strong consumer
demand as well as the Group’s determined efforts to develop its
portfolio. We have been successful in launching new concepts and
eliminated less profitable units from our portfolio. Major
individual factors underpinning the strong profit performance also
included Nokia Arena – which had a particularly good start to its
operations by hosting Finnish league ice hockey playoff games and
the Ice Hockey World Championships – as well as the turnaround
achieved in the Danish operations and the strong demand for the
entertainment venues.
The company’s financial position has also developed in the right
direction, driven by strong growth and profitability. Supported by
strong cash flow, the company has amortised its loans ahead of
schedule and strengthened its equity by converting the Tesi loan
taken out during the COVID-19 pandemic into equity in an
arrangement valued at over MEUR 10. The parties that invested in
the company in the arrangement included not only the largest
shareholders but also the company’s senior management and new
members of the Board of Directors. The ratio of net debt to
operational EBITDA has fallen below 3.5, which reduces interest
expenses in accordance with the company’s financing agreement.
During the review period, a computational expense of MEUR 0.8 was
recognised in financial items in relation to a change in the market
price of Eezy shares, which are classified as an asset held for
sale.
The outlook for the rest of the year is overshadowed by economic
uncertainties and pressures on consumer purchasing power. During
the first half of the year, we have been very successful in
protecting sales margins through purchasing agreements and dynamic
pricing. This provides more of a buffer and room to manoeuvre with
regard to pricing and marketing, particularly in the fast food
segment. The booking situation for the final quarter – which is the
most important period of the year – looks good, especially as far
as weekends are concerned. In the autumn, the company will launch
an extensive recruitment campaign that is aimed at finding new
personnel to meet the labour shortages affecting the entire
industry.
During the review period, the company strengthened its
organisation and focused particularly on the priorities highlighted
in its growth strategy by creating a separate organisation focused
on the fast food business and by strengthening the country
organisations in Denmark and Norway. After two difficult years, the
company had a flying start to the second quarter and a return to
the path of profitable growth, where the goal is to achieve
turnover of MEUR 400 and EBIT of MEUR 40 by the end of 2024.
Aku VikströmCEO, NoHo Partners
IMPLEMENTATION OF THE STRATEGY
After the COVID-19 pandemic has eased and restrictions have been
lifted, the company has continued to implement a strategy of
profitable growth.
Strategic priorities:
• Profitable growth
in the Norwegian restaurant market through acquisitions
• Scaling up the
Friends & Brgrs chain to a national level
• Large and
profitable urban projects
The goal is to accelerate growth in the Norwegian restaurant
market through acquisitions. The Wiigen restaurant was opened in
Oslo’s Aker Brygge district in the second quarter.
The goal is to scale around 10 new restaurants in the Friends
& Brgrs chain on an annual basis. Four new restaurants in the
chain were opened during January–July 2022.
With regard to large and profitable urban projects, the capacity
of Nokia Arena in Tampere, Finland, was fully utilised during the
lively spring of playoff competition in the Finnish ice hockey
league, and the Ice Hockey World Championships in May went very
well and generated turnover of approximately MEUR 5.7.
BUSINESS SEGMENTS
As of 1 January 2022, NoHo Partners’ business consists of two
business segments, which are reported separately:
• Finnish operations• International business
TURNOVER AND INCOME
JANUARY–JUNE 2022
Entire Group
During the second quarter, the company operated in an
unrestricted business environment in all of its operating
countries. The Group’s turnover in April–June 2022 was MEUR 90.2,
which represents an increase of 162% compared to the corresponding
period in 2021 and an increase of 33% compared to the corresponding
period in 2019, before the COVID-19 pandemic. In January–June 2022,
turnover amounted to MEUR 138.7, representing growth of 154%
compared to the corresponding period in the previous year and
growth of 15% compared to the corresponding period in 2019, in
spite of the restricted business environment in the first months of
the year.
The lifting of restaurant restrictions was reflected in strong
customer demand and turnover growth in the second quarter. Growth
was further boosted by the release of pent-up demand and the Ice
Hockey World Championships held in the company’s main markets in
Finland, Helsinki and Tampere, which had an effect of approximately
MEUR 5.7 on the company’s turnover in May.
Operational EBITDA reached an all-time high in April–June 2022:
MEUR 18.3, including MEUR 4.3 in retrospectively confirmed
government assistance from the Finnish state in relation to the
business restrictions that were in place in January–February 2022.
The operational EBITDA for January–June 2022 was MEUR 19.4,
representing an increase of 423% compared to the previous year.
EBIT in April–June 2022 also reached an all-time high of MEUR
16.1 (17.9%), or MEUR 11.8 (13.1%) adjusted for the financial
support received from the Finnish state. The result for April–June
2022 was MEUR 10.5, representing growth of 347% compared to the
corresponding period last year. The result for the review period
was affected by an expense of MEUR 0.8 recognised in financial
items due to the market value of Eezy Plc shares, classified as
held for sale, falling below the book value.
In January–June 2022, EBIT was MEUR 14.8 (10.7%) and the result
was MEUR 7.0, representing an increase of 147% compared to the
corresponding period last year.
Finnish operations
There was a strong recovery in consumer demand after
restrictions were lifted in March, and consumer demand remained
strong throughout the second quarter. Corporate sales and event
sales returned to normal during the review period.
At the end of June 2022, the operations consisted of 211
restaurants across Finland. Restaurants represented 44% of the
turnover of Finnish operations in the second quarter, with
entertainment venues representing 41% and fast food restaurants
15%. The excellent profit performance of entertainment venues and
the company’s largest urban project, Nokia Arena, helped the
business achieve a record-high result. Nokia Arena’s share of
turnover in the first half of the year was over MEUR 10, or
approximately 9%.
In April–June 2022, turnover increased by 144% compared to the
corresponding period last year and by 29% compared to the
corresponding period in 2019. In January–June 2022, turnover
increased by 121% compared to the corresponding period last year
and by 5% compared to the corresponding period in 2019, in spite of
the restrictions that were in place in the first months of the
year.
EBIT in April–June 2022 was MEUR 14.6 (20.0%), or MEUR 10.3
(14.1%) when adjusted for the retrospectively confirmed financial
support from the Finnish state, representing the highest level the
company has ever achieved. In January–June 2022, EBIT was MEUR 12.2
(11.1%). The EBIT achieved by the company is strong evidence of
successful portfolio development and the improvement of relative
profitability.
The company has been able to balance the effects of inflation on
its business through centralised purchasing agreements and price
increases, and the general rise in prices has not affected the
material margin for the time being. In spite of the labour
shortages in the sector, the company also performed well in
recruitment and resource allocation during the first half of the
year, and the growth in turnover has kept personnel expenses at a
good level.
KEY FIGURES, FINNISH OPERATIONS |
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(MEUR) |
1 Apr.-30 Jun. 2022 |
1 Apr.-30 Jun. 2021 |
Change |
1 Jan.-30 Jun. 2022 |
1 Jan.-30 Jun. 2021 |
Change |
1 Jan.-31 Dec. 2021 |
Turnover |
72.9 |
29.9 |
144.0% |
110.2 |
49.9 |
120.8% |
158.1 |
Operational EBITDA |
15.9 |
1.3 |
1,162.9% |
15.1 |
-4.2 |
458.4% |
9.3 |
EBIT |
14.6 |
-0.2 |
8,655.1% |
12.2 |
-7.8 |
256.6% |
1.0 |
EBIT, % |
20.0% |
-0.6% |
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11.1% |
-15.6% |
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0.6% |
Material margin, % |
75.1% |
73.7% |
|
74.6% |
73.1% |
|
74.6% |
Personnel expenses, % |
31.5% |
35.4% |
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33.2% |
38.1% |
|
34.7% |
International business
At the end of June 2022, the business consisted of 40
restaurants: 21 in Norway and 19 in Denmark. The restaurants in
Norway generated 64% and the restaurants in Denmark 36% of the
turnover in April–June 2022.
Business in Norway and Denmark recovered quickly after the
restrictions were lifted in February 2022. In the early part of the
year, while restrictions were still in place, government support
measures continued in both countries in proportion to the reduction
in turnover.
The international business is progressing according to forecasts
and the Group’s strategy. The long-term development of the
portfolio and operational activities is reflected in strong
turnover and profitability in Norway and and EBIT in Denmark
returning to positive territory by a clear margin in the first half
of the year, which is a strong indication that the implementation
of the turnaround programme has been successful.
KEY FIGURES, INTERNATIONAL BUSINESS |
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(MEUR) |
1 Apr.-30 Jun. 2022 |
1 Apr.-30 Jun. 2021 |
Change |
1 Jan.-30 Jun. 2022 |
1 Jan.-30 Jun. 2021 |
Change |
1 Jan.-31 Dec. 2021 |
Turnover |
17.3 |
4.6 |
274.9% |
28.5 |
4.8 |
500.0% |
28.0 |
Operational EBITDA |
2.4 |
-0.6 |
534.2% |
4.3 |
-1.8 |
339.2% |
2.0 |
EBIT |
1.5 |
-1.6 |
194.4% |
2.6 |
-3.7 |
169.5% |
-1.9 |
EBIT, % |
8.9% |
-35.5% |
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9.1% |
-78.6% |
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-6.6% |
Material margin, % |
75.1% |
76.1% |
|
75.6% |
70.1% |
|
73.4% |
Personnel expenses, % |
33.5% |
47.6% |
|
37.1% |
73.7% |
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43.7% |
TURNOVER BY BUSINESS AREAS
In accordance with the reorganisation measures announced on 9
June 2022, the company now uses the term “fast food business” for
the business that was previously referred to as the “fast casual”
business. The allocation of units to the business area has been
adjusted in accordance with the new structure, and this has also
been taken into account in the comparison figures.
FINNISH OPERATIONS |
1 Apr.-30 Jun. 2022 |
1 Apr.-30 Jun. 2021 |
1 Jan.-30 Jun. 2022 |
1 Jan.-30 Jun. 2021 |
1 Jan.-31. Dec. 2021 |
Restaurants |
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Turnover, MEUR |
32.2 |
11.7 |
49.4 |
21.1 |
72.7 |
Percentage of total turnover |
35.7% |
34.0% |
35.6% |
38.5% |
39.1% |
Change in turnover |
174.8% |
- |
134.6% |
- |
- |
Units, number |
92 |
86 |
92 |
86 |
96 |
Entertainment venues |
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Turnover, MEUR |
29.9 |
9.8 |
41.3 |
12.9 |
50.6 |
Percentage of total turnover |
33.1% |
28.5% |
29.8% |
23.6% |
27.2% |
Change in turnover |
204.4% |
- |
219.9% |
- |
- |
Units, number |
71 |
63 |
71 |
63 |
72 |
Fast food restaurants |
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Turnover, MEUR |
10.8 |
8.3 |
19.4 |
15.9 |
34.8 |
Percentage of total turnover |
12.0% |
24.2% |
14.0% |
29.1% |
18.7% |
Change in turnover |
29.5% |
- |
22.2% |
- |
- |
Units, number |
48 |
41 |
48 |
41 |
45 |
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INTERNATIONAL BUSINESS |
1 Apr.-30 Jun. 2022 |
1 Apr.-30 Jun. 2021 |
1 Jan.-30 Jun. 2022 |
1 Jan.-30 Jun. 2021 |
1 Jan.-31 Dec. 2021 |
Norway |
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Turnover, MEUR |
11.1 |
2.1 |
19.0 |
2.3 |
16.8 |
Percentage of total turnover |
12.3% |
6.1% |
13.7% |
4.1% |
9.0% |
Change in turnover |
425.3% |
- |
737.2% |
- |
- |
Units, number |
21 |
18 |
21 |
18 |
21 |
Denmark |
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Turnover, MEUR |
6.2 |
2.5 |
9.5 |
2.5 |
11.2 |
Percentage of total turnover |
6.9% |
7.2% |
6.9% |
4.5% |
6.0% |
Change in turnover |
147.5% |
- |
283.6% |
- |
- |
Units, number |
19 |
21 |
19 |
21 |
19 |
THE IMPACT OF THE COVID-19 PANDEMIC ON THE GROUP’S
BUSINESS
The COVID-19 pandemic has had a significant impact on the
Group’s business since March 2020. The restrictions imposed on the
restaurant industry by governments in order to mitigate the
pandemic and the impacts of the pandemic on customer demand have
had a highly negative effect on NoHo Partners’ business operations
and financial results. The Group has taken determined action to
reduce the pandemic’s impacts, uncertainties and risks and to
secure the Group’s financial position and sufficient financing.
In Finland, strict restrictions on restaurants were in place in
January and continued until 14 February 2022, after which alcohol
service ended at 11 p.m. and opening hours ended at midnight for
all restaurants. At the same time, restrictions on assembly were
lifted. The restaurant restrictions in Finland were lifted
completely on 1 March 2022.
In Denmark, restaurants had to close at 11 p.m. in January, with
alcohol service ending at 10 p.m. Customer capacity was restricted
to half of normal and nightclubs were closed. All restaurant
restrictions were lifted on 1 February 2022.
In Norway, the ban on the sale of alcohol lasted one month and
ended on 14 January 2022, after which all restaurants were allowed
to serve alcohol until 11 p.m. and stay open until midnight.
Customer capacity was restricted to half of normal and table
service was required. The restaurant restrictions, with the
exception of the prohibition of dancing and the requirement to
maintain safe distances of one metre, were lifted on 1 February
2022, and the remaining restrictions were lifted on 12 February
2022.
A report on the impacts of the pandemic and changes in
restaurant restrictions for the comparison period 2021 is presented
in the section Accounting principles, Note 1 of the Financial
statements release 2021.
Government assistance during the state of
emergency
In April–June 2022, the company received retrospectively
confirmed government assistance from the Finnish state in the
amount of MEUR 4.3. The government assistance was intended for
medium-sized and large enterprises and concerned the
January–February 2022 period, during which business activities were
restricted or completely blocked by government orders.
The support received from the Danish state in January–June 2022
amounted to approximately MEUR 0.8 and the support received from
the Norwegian state amounted to MEUR 1.7. Government assistance
received by the Group totalled approximately MEUR 6.9 in
January–June 2022.
A more detailed account of government assistance and the
distribution thereof is presented in Note 4 Government grants in
the half-year report.
CASH FLOW, INVESTMENTS AND FINANCING
The Group’s operating net cash flow in January–June 2022 was
MEUR 32.8 (MEUR 12.8). The total half-year change in working
capital is not material, although the amount of working capital has
fluctuated significantly during January-June 2022 due to the
business restrictions that were in place in the early months of the
year and their subsequent lifting.
The investment net cash flow in January–June 2022 was MEUR -2.2
(MEUR 0.7) including MEUR 4.2 of positive cash flow from the sale
of Eezy Plc’s shares, which were classified as held for sale. The
investment net cash flow also included the opening of four new
Friends & Brgrs restaurants, the opening of the Wiigen
restaurant in Oslo, Norway and the acquisition of the restaurant
Origo in Hanko, Finland.
Financial net cash flow amounted to MEUR -33.4 (MEUR -9.0),
including MEUR 12.8 in amortisation of financial institution loans,
of which an instalment of MEUR 4.0 due in August was paid in
advance. Financial cash flow also includes the repayment of a loan
of MEUR 1.8 related to the Tesi arrangement.
The Group’s interest-bearing net liabilities excluding the
impact of IFRS 16 liabilities decreased in the first half of the
year by MEUR 25 and amounted to MEUR 126.9. The decrease was
attributable to the strong profit performance in the second quarter
and the Tesi convertible loan arrangement carried out in May, which
reduced net debt by over MEUR 10. The Group’s gearing ratio
excluding the impact of IFRS 16 liabilities decreased from 203% at
the beginning of the financial period to 139%.
Adjusted net finance costs in January–June were MEUR 6.9 (MEUR
6.3), of which the share of IFRS 16 interest expenses was MEUR 3.6
(MEUR 2.8). BRIEFING FOR THE MEDIA,
ANALYSTS AND INVESTORS AT 10:00
A.M.
A briefing for the media, analysts and investors will be
organised today, Tuesday 9 August 2022 at 10:00 a.m. at Allas Sea
Pool, Helsinki. In the briefing, NoHo Partners CEO Aku Vikström
will review NoHo Partners Plc's Q2/2022 financial performance, key
events, the current state of business and the outlook.
The briefing is available as a live webcast at
https://noho.videosync.fi/2022-q2-tulos. The briefing will be held
in Finnish. The presentation materials and a recording of the
briefing will be available on the company’s website later
today.
NoHo Partners’ full Half-year Report for January–June 2022 is
attached to this release as a PDF file. The Half-year Report is
also available at www.noho.fi.
Tampere, 9 August 2022
NOHO PARTNERS PLC Board of Directors
More information is available from: Aku
Vikström, CEO, tel. +358 44 235 7817 Jarno Suominen, Deputy CEO,
tel. +358 40 721 5655
NoHo Partners Plc Hatanpään valtatie 1 B FI-33100 Tampere
www.noho.fi
NOHO PARTNERS PLC is a Finnish group
established in 1996, specialising in restaurant services. The
company, which was listed on NASDAQ Helsinki in 2013 and became the
first Finnish listed restaurant company, has continued to grow
strongly throughout its history. The Group companies include some
250 restaurants in Finland, Denmark and Norway. The well-known
restaurant concepts of the company include Elite, Savoy, Teatteri,
Sea Horse, Stefan’s Steakhouse, Palace, Löyly, Hanko Sushi, Friends
& Brgrs, Campingen and Cock’s & Cows. Depending on the
season, the Group employs approximately 2,100 people converted into
full-time employees. The Group aims to achieve turnover of MEUR 400
by the end of 2024. The company’s vision is to be the leading
restaurant company in Northern Europe.
- NoHo_Partners_Plc_Half-year_Report_Q2_2022
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