Gowrings, the Burger King franchisee, slumped to an £1.85m loss for the year to December 31 2002 from a profit of £1m in 2001, as like-for-like sales fell 6%.
An accounting hole that was uncovered when it sold its motor dealerships last year to concentrate on restaurants is costing it another £700,000, while asset write-downs in its restaurants business are costing another £2.2m, which together with reorganisation costs mean a final loss for the year of £3.9m after tax.
It said an investigation by a firm of forensic accountants, Howarth Clark Whitehill, into the accounting irregularity continues.
The company increased its number of restaurants to 41 at the year-end, but overall sales slipped 0.3% to £32.95m from £33.05m, and like-for-like sales dropped 6%, putting pressure on margins because of its high semi-fixed costs of labour and controllables, Gowrings said. Ebitda for the restaurants division was £1.91m Net borrowings at the end of 2002 were £6.12m, down from £10.14m the year before.
Gowrings' chairman and chief executive, Derek Coulson, attacked Burger King's "largely ineffective" national marketing programme during 2002, when the burger giant was the subject of a protracted sale by its parent, Diageo. Gowrings said it increased expenditure on its own local marketing initiatives, and saw a sales improvement in the last quarter of the year.
Trading in the first 17 weeks of the year has improved on 2002, the company said, with like-for-like sales up 6% on 2002 and virtually the same as 2001. However, Coulson said, "this improvement has come without significant input from the new management team at Burger King."
Coulson said Gowrings' outlets are now offering more better value menu items through the "real deal" which, together with its own initiatives to encourage and stimulate restaurant management, "are showing encouraging signs in increased volumes".
Gowrings expects to have 41 stores open at the end of 2003, the same as now, with two new stores opening and two existing ones being closed or sold.
An accounting hole that was uncovered when it sold its motor dealerships last year to concentrate on restaurants is costing it another £700,000, while asset write-downs in its restaurants business are costing another £2.2m, which together with reorganisation costs mean a final loss for the year of £3.9m after tax.
It said an investigation by a firm of forensic accountants, Howarth Clark Whitehill, into the accounting irregularity continues.
The company increased its number of restaurants to 41 at the year-end, but overall sales slipped 0.3% to £32.95m from £33.05m, and like-for-like sales dropped 6%, putting pressure on margins because of its high semi-fixed costs of labour and controllables, Gowrings said. Ebitda for the restaurants division was £1.91m Net borrowings at the end of 2002 were £6.12m, down from £10.14m the year before.
Gowrings' chairman and chief executive, Derek Coulson, attacked Burger King's "largely ineffective" national marketing programme during 2002, when the burger giant was the subject of a protracted sale by its parent, Diageo. Gowrings said it increased expenditure on its own local marketing initiatives, and saw a sales improvement in the last quarter of the year.
Trading in the first 17 weeks of the year has improved on 2002, the company said, with like-for-like sales up 6% on 2002 and virtually the same as 2001. However, Coulson said, "this improvement has come without significant input from the new management team at Burger King."
Coulson said Gowrings' outlets are now offering more better value menu items through the "real deal" which, together with its own initiatives to encourage and stimulate restaurant management, "are showing encouraging signs in increased volumes".
Gowrings expects to have 41 stores open at the end of 2003, the same as now, with two new stores opening and two existing ones being closed or sold.
