Savor Limited announces robust financial outlook and strategic banking shift

AUCKLAND: Savor Limited (NZX: SVR), New Zealand’s leading hospitality entity, has released its year-end financial forecast, showcasing a remarkable turnaround and strategic banking developments.

Financial Resurgence Post-Pandemic Savor Limited has reported that the fiscal year 2024 marks its first reporting period free from the influences of the Moa business divestment and the COVID-19 pandemic.
The company has achieved a staggering 299% increase in revenue and a 546% rise in operating earnings since 2019.

Projected Financial Performance The company anticipates an EBITDA ranging from $8.5 to $9.0 million for the year ending March 31, 2024, a significant leap from the $5.2 million recorded in 2023.
This improvement is attributed to stringent cost management and an enhanced margin of 4 percentage points over the previous year.
Consequently, Savor Limited forecasts a Net Profit After Tax of $1.5 to $2 million, adjusted for non-cash items.

Cash Flow and Debt Management Savor Limited expects a free cash flow between $3.5 million to $4 million, with principal amortization capped at $1 million annually.
This strategic move is set to bolster the company’s balance sheet flexibility.

New Banking Partnership In a strategic shift, Savor Limited has forged a new banking relationship with ANZ, featuring a cost of funds at approximately 7% and projecting a debt to EBITDA ratio of 1:1.

Operational Efficiencies and Market Confidence The company has maintained cost efficiencies and economies of scale throughout the year, particularly during the robust summer trading period.
With EBITDA returns as a percentage of sales improving by over 4%, Savor Limited is confident in its market guidance for the upcoming financial year.

Revenue and Tax Position The Group anticipates surpassing $60 million in revenue for the financial year ending March 31, 2024, with operating earnings estimated between $8.5 and $9.0 million.
This performance positions Savor Limited to commence utilizing its historical tax losses, projecting a net profit after tax of $1.5 to $2 million.

Five-Year Milestone and Shareholder Gratitude Reflecting on a five-year journey, Savor Limited has turned around its operating cash flow by $10 million and delivered a 546% increase in operating earnings.
The executive team extends its gratitude to shareholders for their unwavering support and looks forward to continued growth fueled by free cash flow.

Banking Transition and Debt Reduction After a competitive tender process, ANZ has been selected as Savor Limited’s new banking partner from March 2024.
The company has successfully reduced its debt principal by approximately $6 million, decreasing borrowings from a peak of $15 million in July 2021 to around $8 million in March 2024.
The new banking arrangements with ANZ promise more streamlined operations and greater financial flexibility for the Group.

Savor Limited’s strategic decisions and financial prudence have positioned it for sustained growth and profitability in the post-pandemic era.

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