Individual Restaurant Company (IRC), the operator of the Piccolino and Restaurant Bar & Grill brands, has this morning revealed that group ebitda fell 18.75% to £1.3m for the six months to 28 June, down from £1.6m for the same period the year before.
The group, which recently raised £2.6m via a share placing, said that it was trading in line with expectations and that it had passed its banking covenants comfortably.
It has successfully renegotiated an £18.5m banking facility during the six months and added that Lloyds Banking Group had also cancelled £1m of loan amortisation that had been due to be repaid in December.
Sales increased by 5% to £25.2m and IRC said it had made £1.4m worth of cost savings in the six-month period. It was also on target to achieve savings of £2m for the full year.
Steven Walker, chief executive, said: “We continue to deliver upon our core customer values, whilst keeping an ongoing focus on cost control.
“In addition, we have taken positive steps to reduce the group’s indebtedness and provide additional headroom going forward.
“We remain confident of the prospects for the group over the medium to long term and are well placed for the upturn in the consumer environment when it occurs.”
IRC said the gross margin for the period was 73.5% – in line with 2008 and that it continued to eschew mass discounting in favour of “tactical promotions”.
The operating loss before exceptional costs was £200,000, from a profit of £400,000 for the year before.
IRC said that in the period, new banking facility terms were negotiated up to a maximum borrowing of £18.5m to January 2012, and that these had more appropriate covenant tests and test levels.
Previously the group had a rolling facility that was due for repayment three months after each drawdown.
Now it said that banking covenants were tested every half year on net debt to ebitda, ebitda to senior interest and cash flow available for debt service to debt service.
IRC said all tests for the period to 28 June had been “very comfortably met”.
The group added it was confident that its brands were robust and would benefit from a rollout when consumer confidence returned.
It also said traditionally trading had been better in the second half and that comparables could be better going into the period, following the start of the economic downturn in H2 last year.
