Individual Restaurant Company (IRC), the operator of Piccolino and Restaurant Bar & Grill, has this morning reported signs of toughening trading conditions. Unveiling interim results, the group said it had seen signs in the last 10 weeks of a harder trading environment, brought about by an embattled consumer and some cost pressures. The management team of Steven Walker, chief executive, and Vernon Lord, finance director, said it was too early to draw any conclusions. Lord told M&C Report: “I think it’s important not to get too carried away with this. The consumer has had an exceptional few weeks. In their eyes, HBoS was a very strong bank and when things like that happen, it takes a bit of getting used to.” Walker added: “These are creditable results in what remain testing times for the sector as a whole in view of the challenging consumer outlook and upward pressure on costs. “The medium-term prospects are good, we remain confident, and the key things for us are to deliver a very good Christmas, to deliver the rollout and to keep building the pipeline.” Walker said that the changing economic climate had meant that the company had been able to renegotiate some sites on significantly better terms, although this had yet to translate to lower rents. The news came as IRC reported restaurant ebitda – before central overheards – up 11.1% to £4.0m. After pre-opening and central costs, ebitda was up 30.7% to £1.7m. Sales were up 21% to £24.0m. Operating margins declined from 17.9% to 16.6% as the result of inflationary cost pressures on food and drink items, the company said. IRC said its costs from energy usage had not risen because of fixed-rate contracts. It said some of these agreements were up for renewal in the second half but any impact would be minimal. Total group ebitda margins rose from 6.4% to 6.9%. Top-line growth in the six months was driven by an opening programme that saw new restaurants launched in six locations in 2007, comprising four Piccolino restaurants – in London’s Exchange Square, Ilkley, Sheffield and West Didsbury – and two Restaurant Bar & Grill venues – in Liverpool and Tunbridge Wells. It was on track to open seven new restaurants in the current year. Piccolino sites had opened in Birmingham, Bristol, Hale and York, with two more – in Aberdeen and Clitheroe – to follow before the year end. It was also currently building a Restaurant Bar & Grill in Harrogate. Walker said: “The main thing in the past year has been for us to deliver on the rollout and to prove that both these brands work in the South – and we have done that.” On debt, the group said it had an available banking facility of £4.1m and its interest repayments were covered four times by current ebitda levels. It was conservatively geared at 35%. Central costs for the period were £2.1m. The company said it was in line to meet current expectations for the full year.