Elephant & Castle reports first quarter results

Business Wire, May 15, 1997

VANCOUVER, BRITISH COLUMBIA--(BUSINESS WIRE)--May 15, 1997-- Elephant & Castle Group Inc. (NASDAQ: PUBSF, PACIFIC:PUB) today reported sales in the first quarter ended March 31, 1997 increased almost twenty-eight percent to CDN $7.8 million, compared with CDN $6.1 million in 1996 as revenues kicked in from its three newest locations in San Diego, CA; Bloomington, MN, and Toronto, Ontario. The Company reported a net loss of CDN ($376,687) or CDN ($0.13) per share for the three months ended March 31, 1997 compared with a loss of CDN ($381,093) or CDN ($0.15) per share in the corresponding period in 1996.

Chairman and Chief Executive Officer, Mr. Jeffrey Barnett, said that across the system, food and beverage cost percentages decreased; income from restaurant operations before depreciation and amortization, increased by CDN $177,000; and general and administrative expenses, as a percentage of sales, decreased to 7.3% in the first quarter of 1997 from 9.3% in the first quarter of 1996. However, the additional revenues were offset by higher depreciation and amortization costs related to the new locations, greater than budgeted labour expenses as well as higher interest expenses.

Mr. Barnett stated that "the company is continuing its negotiations with landlords associated with four of its mall based Elephant & Castle locations in an attempt to bring occupancy cost to a controllable level thus positively influencing bottom line results."

Mr. Barnett concluded by stating that "we recognize the need to control expenses while the hotel food and beverage, development program is progressing and management is committed to seeing future revenue increases turn into bottom line profits".

The Company recently announced the finalization of a joint venture agreement with Rainforest Cafe, Inc. (NASDAQ: RAIN) for the development of Rainforest Cafe units in Canada. The first of these "eatertainment" locations is expected to open within the year, a minimum of five locations are expected to be developed throughout Canada. The Company expects to make announcements shortly with regard to site selection.

Additionally, the company intends to open two new Elephant & Castle restaurants this summer in downtown hotel locations in Seattle, WA and Boston, MA. -0-

            ELEPHANT  &  CASTLE  GROUP  INC.
            Financial Highlights
            (unaudited)

(CDN Canadian dollars)
                                      Three months ended March 31

                                              1997           1996

Sales                                    $7834,385     $6,127,585
Net Income (LOSS)                        (376,687)      (381,093)
Net Income (Loss) per Share                ($0,13)        ($0,15)
Total Assets                            18,731,034     14,966,283
Shareholders' Equity                    $7,856,577     $6,706,045
Average Shares Outstanding               2,843,633      2,604,611

Convenience Translation to U.S. dollars:  Elephant & Castle reports
results in Canadian dollars (CDN $).  For the 1997 Quarter the
conversion rate was $U.S. $1.00 = $CDN $1.37 ($U.S. $1.00 =
$CDN $1.37 in 1996)

The following figures are convenience translation only,

(U.S. $ - U.S. dollars)
                                      Three months ended March 31

                                              1997           1996

Sales                                   $5,718,529     $4,472,690
Net Income (Loss)                        (274,954)      (278,170)
Net Income (Loss) per Share                ($0.10)        ($0.11)
Total Assets                            13,672,288     10,924,294
Shareholders' Equity                     5,734,728      4,894,923
Average Shares Outstanding               2,843,633      2,604,611