Individual Restaurant Company (IRC), the operator behind the Piccolino and Restaurant Bar & Grill formats, has reported a fall in revenues and underlying profits for the 12 months to 31st December 2010.
The 33-strong group’s revenue slipped by 3.9% or £2.0m to £51.3m, which it said was due to “a number of well-publicised one-off factors”, while restaurant ebitda also suffered and was down by £1.1m to £7.7m.
Group ebitda in the period was £4.3m, down £0.7m on the previous year (2009: £5.0m). Pre-tax profit stood at £0.2m down from £1.3m in 2009.
However, the company said it had experienced strong like-for-like sales growth in the last two weeks of 2010, and had introduced a number of sales initiatives, which had “continued this momentum”.
It said that January like-for-like sales were strong, albeit against a period last year affected by extreme weather, and that volume growth had continued in both February and March.
Despite this, the company said that the rate of sales growth in March was lower than the previous two months and that it was experiencing an increased level of cost inflation; “in particular the uplifts in alcohol duty and the national minimum wage, the change in Employers National Insurance contributions and food cost inflation”.
It said that it expect to absorb all or most of these cost pressures by a combination of increased revenues and operating efficiencies.
Steven Walker, chief executive, said: “Taking into account some adverse one-off factors, trading performance in 2010 was pleasing. We experienced strong like for like sales towards the end of December 2010 and a number of sales initiatives have continued this momentum into the early part of 2011.
“However we remain cautious as to the future trading environment. Like for like sales growth, whilst positive, has slowed in March and in common with most of the industry, we are also experiencing cost pressures. Nevertheless I remain confident in the robustness and trading potential of both brands."
The company said that non-trading costs totalled £1.9m (2009: £2.2m) during the year, arising predominately from two areas: onerous lease provisions totalling £0.5m and impairment of non-current assets totalling £1.3m.
Of the onerous lease provisions £0.3m related to the release of provision in respect of its restaurants in Wandsworth and Birmingham, the leases of which are both expected to be assigned to new tenants before June.
The group said that in the current property market it has “proven difficult to find suitable buyers for these units” and as a result the has “provided for expected ongoing property costs”.
Capital expenditure in the year was £1.4m, which the company said largely related to enhancing its estate by expanding the number of covers and providing outside dining areas.
Last September, IRC secured a refinancing on its £18.5m loan facility last, which shaved around £1.4m from its net debt. The term of the facility was also extended 12 months to January 2013.
The company said reduced its net debt by £0.7m to £11.7m during the year and said that the available headroom on its banking facility was £6.8m compared with £6.1m in 2009.
