Prezzo has reported an operating loss of £65m the year to 31 December 2017.

The brand said the results show the effects of an “increasingly challenging marketplace and the over-expansion of new sites and additional concepts”.

Prezzo Limited, the main trading entity for the group’s portfolio of restaurants, reported revenues of £211.6m and an operating profit (excluding non-trading items) of £6.6m for the year to 31 December 2017.

Due to a non-cash write-off primarily relating to the write-down of the underperforming sites and concepts which formed part of the Company Voluntary Arrangement (CVA) in 2018, Prezzo Limited reported an operating loss of £65m for 2017.

The total non-cash write-off for Papa Topco was £197.8m, reflecting the write-down of the assets, as well as the impairment of the original investment and historic goodwill.

The group entered into a CVA in February 2018, following the strategic review at the end of 2017.

This process completed in May, resulting in the exit from under-performing concepts and the downsizing of the estate to a core 186 profitable Prezzo restaurants.

The capital base was restructured in August through a debt-for-equity swap, reducing debt from £155m to a more manageable £51m and creating a solid foundation for future growth.

Following this restructuring, the shareholding and new debt facility will be held in Prezzo Holdings, while Papa Topco and Papa Midco will be dormant.

Karen Jones was appointed as executive chairman in June 2018 to lead Prezzo’s revitalisation.

Jones said: “The 2017 results are a reflection of the effects of the headwinds facing the casual dining sector and the performance and shape of the business during that year, not as it is today. Post 2017, several key steps have been taken that allow us to put our focus where it should be – on our customers, our people and our brand. In the week when we turn 18, I would like to thank all our Prezzo people for their hard work and commitment, and our shareholders for their valued support. We are focused on where the Prezzo story started 18 years ago and how it will continue and flourish into the future – putting customers at the heart of everything we do.”