IRC puts undeveloped sites on the market
INDIVIDUAL Restaurant Company has said that it may sell off the three sites on which leases were signed two years ago but have yet to open.
The firm entered into an agreement with landlords to open four new Restaurant Bar & Grill sites in Knutsford, Aberdeen, the City of London and Dorking in 2009 but as the financial climate worsened it put the openings on hold.
It has since managed to extricate itself from the London lease but is still paying rents on the other three sites and has no schedule in place for new openings.
“We may exit some and we may just sit on them,” the company’s chief executive, Steven Walker, told TheBusinessDesk.com following the company’s announcement of its full-year results on Monday.
“We’ve been caught in a period which has been difficult for everyone – it’s not just us,” he said. “People keep asking ‘Why aren’t you growing?’ and the answer is that in this environment you can’t.”
IRC, which operates 11 Restaurant Bar & Grill Restaurants and 22 sites under its Piccolino’s brand, declared an exceptional cost of £800,000 relating to its undeveloped properties – one of a number of property-related costs which led to losses pre-tax losses widening to £1.8m (2009: £872,000) following a 3.9% fall in sales during 2010 to £51.3m.
A statement accompanying its results by company chairman Robert Breare also said that the undeveloped property pipeline “is currently being marketed”.
“In the current property market it has proven difficult to find suitable buyers for these units and as a result the group has provided for expected ongoing property costs.”
Onerous lease provisions also cost the business another £500,000 and £1.3m was written off the value of “non-current asets”, of which the principal component will be its restaurant sites.
A further £300,000 of provisions have been made against two closed sites – an IRC unit in Wansdworth that closed last year and a former Bank site in Birmingham inherited at the time of IRC’s reverse takeover of Bank Restaurants in December 2006 which gave it its stockmarket listing.
“Apart from Wandsworth, which just didn’t work out, we haven’t really closed any,” said Walker. “The unit in Birmingham was one which we inherited with the float in 2006, and we’ve chosen to exit that because it doesn’t suit us – it’s in a wet-led part of town”.
Assignments for the leases of both sites are expected to be made to new tenants by the end of June.
Walker said that the company would not look to change what he believes is a successful format based on “great food and great service”.
The firm has developed a new centralised reseavation system that allows it to email regular diners with event-themed campaigns (around racecourse events in Chester and York, for example) and offer a loyalty card but Walker stressed that the company would continue with its policy of not promoting widespread offers or discounts.
