IRC warns of lower profits
PIZZA is off the menu at some of the Italian restaurants, Piccolino’s, as its owner looks to boost customer spending in these tough times.
The Individual Restaurant Company, which also owns the Restaurant Bar & Grill chain, said today that profits will be at the ‘lower end’ of market expectations and warned of challenging trading ahead.
Despite strong trading over the Christmas period, IRC said that conditions have toughened in the second half of its financial year, and while its full year results will be in line with current market consensus at a trading level, higher depreciation and interest charges will see pre-tax profits come in at the lower end of expectations.
The Manchester-based group which operate 34 restaurants, 23 under the Piccolino brand and 11 Restaurant Bar & Grill outlets, said sales in December 2008 were up 11% driven by the six new restaurant openings including sites at Birmingham, York, Hale, Bristol, Clitheroe and Harrogate.
IRC said it is ploughing on with new openings and leases have been signed at sites in Aberdeen, Knutsford, the City of London and Dorking in Surrey.
It added that while gross margins will come under pressure as suppliers try to offset their rising costs resulting from the weakness in sterling, it believes its brands, roll-out potential and business model are robust is confident about its medium term prospects.
The group has also introduced a number of measures to boost spend per head at its sites including axing pizza off the menu at new venue in Hale and Clitheroe.
Chief executive Stephen Walker said: “I am pleased to report positive trading over the Christmas period. We have taken a number of strong measures to ensure that we continue to be able to expand and are operating more efficiently in the current market environment.
“Whilst we remain cautious in our outlook for the year ahead in line with other operators, both of our brands have gained stature over the year. We remain confident that the broad appeal of both brands will continue to underpin a resilient performance from the group over the medium term.”
The group’s preliminary results will be announced on March 30.
