Prezzo made £29.7m loss in 2018 after CVA

Prezzo made an operating loss of £29.7m in 2018 following the CVA that saw it close nearly 100 restaurants.

The losses at the Italian casual dining were impacted by £22.7m of one-off items, including the non-cash accounting write down of property, plant & equipment and intangibles of £8.5m

Revenue was down 25% from £211.6m in 2017 to £157.2m in 2018 following the downsizing of the estate, as well sector headwinds.

Adjusted EBITDA was down 80% to £3.9m (2017: £19.5m).

Karen Jones CBE was appointed executive chairman in June 2018 to aid to the turnaround of the company.

Prezzo’s financial position stabilised in August through a debt for equity swap, which reduced the Group’s debt from £155m to £53m.

In support of Jones’ turnaround plan, the board and investors agreed a £5m refurbishment programme covering around 50% of the estate.

Fourteen restaurant refurbishments were completed during 2018, with £3m planned to be invested in 2019.

An additional £3m has been set aside for restaurant technology, repairs and maintenance capex in 2019.

Prezzo said the invested sites were performing ahead of their investment case and the remaining estate, with solid like-for-like growth from April 2019 and improving Net Promoter Scores.

Karen Jones said: “Our industry has faced a tough time and Prezzo’s previous strategy of new openings and new concepts distracted from its mission of hospitality. A number of important mitigating actions were taken in 2018 and we’ve started 2019 with a clear plan and in good heart – focused on our people and on our customers, listening to them and serving them better. Our turnaround plan is at an early stage but I am delighted with the initial results and the positive feedback from our customers and our teams. Our concentration will always be on investing in our teams and ensuring that each customer who walks into a Prezzo has the best possible experience. Only through this will we ensure that every customer leaves wanting to return.”