Financial sustainability forecasts for The Convenience Shop Holding plc

In 2020 revenue is expected to grow by 11.3% or €3.3m over the previous 12-month period of 2019. It is expected to grow further in 2021, with a projected annual growth rate of 22.9%.

Own store revenue is projected to be the major revenue factor of the Group, representing 93% of the total revenue.

Six new shops are opened in 2020, of which four are already in operation. One other shop will be opened in 2021. The increase in revenue in 2021 is also attributable to the full year trading of the shops opened in 2020.

Franchise fee revenue is expected to grow further in 2020 and stabilise in 2021. The projections are based on the past trends of each store and new stores opened in the respective years.

In addition to the opening of new shops, revenue growth is predominately driven by the optimisation of the product mix in the shops. This is a result of a comprehensive exercise conducted by the management to improve the effectiveness of the product mix, profit margins and the efficiency of the shops’ available space. This will also lead to an increase in the average value of the chit size.

No royalty fees are projected as the Group will be acquiring the Intellectual Property Rights (The Convenience Shop’ trademark) from a related company during 2020. The Group is in the process of agreeing terms of financing this acquisition. For the purpose of these forecasts, it is assumed that the acquisition will be financed by way of increased borrowings.