Latest accounts from Gondola Group, the company behind the restaurant brands Ask, Byron, Pizza Express and Zizzi, show a 2.4% rise in underlying profits to £105m for 2009.
The company, which is owned by the private equity group Cinven, saw sales rise 10.3% to £509.3m in the 52 weeks to 28 June 2009.
It achieved an operating profit of £45.7m for the period – however, following interest payments on loans; it made an operating loss of £52.4m.
Chris Woodhouse, chairman of the restaurant operator, said: “Despite the tough trading conditions experienced, particularly in the latter part of 2008, our continuing progress across all areas is reflected in the group’s strong trading results for the year.
“The results were particularly strong in the second half of the year as our promotional activity gained momentum. Our financial performance shows that Gondola’s portfolio of brands has been able to offer an outstanding value for money proposition, which has enabled us to deliver robust results in difficult economic circumstances.”
Woodhouse added the group had seen like-for-like sales growth in the early part of its current financial year and its outlook for the year ahead was very positive - despite ongoing challenging economic conditions.
Gondola achieved a net cash flow from operations of £101.9m – and said it used £53.7m to service the group’s net cash interest and other costs associated with its financing structure. It also spent £47.5m on expansion during the period – in which it opened 36 restaurants.
The group has external net debt of £576.8m, which matures on or after December 2012, it said and the debt is divided into three main components – external bank debt, shareholder loan notes and shareholder equity.
It said the external bank debt is in the form of senior and mezzanine debt, which was syndicated to a number of participating financial institutions after the original transaction to take the group private in 2007.
The Cinven Funds, together with a smaller investment by Bank of Scotland, provided the loan notes and equity and Gondola said the interest on the shareholder loan notes and on a portion of the mezzanine facility rolls up into the principal balance and is not due for payment until the maturity or repayment of the respective loan.
It added: “The external bank debt facilities are subject to certain financial and non-financial covenants. The financial covenants include annual limitations on capital expenditure and require the maintenance of certain minimum ratios of ebitda to interest payable and a maximum ratio of ebitda to net debt. In addition, there is a requirement that net operating cash flows are not less than the group’s cash cost of servicing the bank debt. All of the covenants were met with adequate headroom during the period under review and we expect to comfortably comply with the requirements for the foreseeable future.”
