Clapham House Group, the operator of Gourmet Burger Kitchen (GBK), has unveiled an underlying profit decrease of 17.8% to £6m, down from £7.3m the year before – after the company was hurt by higher input costs, including labour, and administrative expenses. Reporting its unaudited preliminary results for the year ended 28 March 2010, it said that profit before tax had increased by 50% to £1.5m, up from £1.0m. Revenue also increased by 4.2% to £44.5m. The company, which early this summer undertook a £2.1m share placing in order to fund a further rollout of GBK, like other restaurant operators, admitted the World Cup had seen a negative impact on trading. It also reported that restaurant sector discounting had returned during the month of June – after starting to abate in April in May - and added it expected trading conditions in the UK to remain challenging. Clapham opened two new GBK restaurants in the UK and five new international franchised units in 2010. So far in financial year 2011, it has opened one new GBK, has a further unit under construction and two in legals. It said that GBK, of which it now has more than 50 restaurants, had seen new openings in Nottingham, Clink Street in London and Bluewater perform well since launch. The group has refurbished seven of its GBK restaurants and said it had taken the opportunity to “develop and refine the GBK brand identity and menu”, which had seen a redesign of its website. Despite closing one of its The Real Greek Restaurants since the year-end in Putney, Clapham said it was in negotiations to open at a new site by 2012. Food cost pressures had eased compared to the previous financial year, added the operator, but focus would remain on costs due to pressures outside of its control like the weakness of the pound, the January increase in VAT, the increase in National Insurance contributions and the introduction of mandatory employer pension contributions. Commenting on menu pricing it said: “The VAT increase in January 2011 will be dealt with through our normal menu price reviews. Given our relatively low spend per head this is not expected to have a material impact on net sales.” Clapham added: “In April and May there were signs that voucher discounting, which has been led by the larger groups, was abating. However, June saw a fresh wave of promotional activity across the industry, no doubt partly in response to the combined impact of the World Cup and the warmer weather.” However it said its policy was too eschew “blanket” voucher discounting. David Page, the group’s executive chairman, said: “"Whilst we saw generally improving trading trends in April and May, the World Cup, as expected, had a negative impact on sales in June. “For the remainder of the financial year we expect trading conditions in the UK to remain challenging. Following the placing of shares in May, we will press on with the selective expansion of GBK into high quality locations." During the year, it generated a net cash inflow from continuing operating activities of £4.9m, down from £6m and said the reduction was a result of timing differences on the payment of trade creditors at the year-end. Net debt at 28 March 2010 had been reduced to £10.1m, down from £13.6m, added Clapham. The company's banking facilities are £21.7m, with the core facility set to mature in June 2012.