Gourmet Holdings, the owner and operator of two restaurant concepts, Richoux and Bel and the Dragon, this morning announced a small loss in its interim results for the 28 weeks to 8 January, while revealing plans to roll out its Richoux concept in the capital.
Group turnover for the period rose slightly to 5.6m, but gross profit fell to £0.43m, and Ebitda slipped to £0.21m. The company posted a pre-tax loss of £0.16m, compared with a £0.31m profit in the corresponding period last year.
Despite the loss, the group said it remained confident in the strength of its brands. Richoux suffered “an extremely difficult beginning of the period” due to the impact of the London bombings in July 2005, which adversely impacted top line sales, but recovered to record an increased year-on-year profit contribution. It also benefited from operational efficiency measures implemented in previous periods.
Gourmet Holdings is now “actively looking to expand the number of Richoux restaurants” it operates, utilising funds raised last year. The company believes Richoux “is a flexible brand and can operate very successfully in locations other than central London, as a casual dining brand, which would flourish in any mass-market location.”
The group is currently evaluating a number of potential sites for a measured roll-out.
The core Bel and the Dragon restaurants performed in line with expectations during the period, though they were less profitable than last year.
The overall performance of this division was undermined by the poor performance of two pub/restaurants which hit the results by £0.2m, and are expected to impact full-year results by £0.4m. The board attributed the underperformance of these sites to their rural location, and as such has resolved to concentrate only on urban and semi-urban locations for future openings.
Both sites have now been transferred out of the group’s continuing operations at no cost.
Early trading signs at the Bel and the Dragon site in Reading, acquired in December 2005, are said to be encouraging. The group continues to seek sites for the brand but warned that expansion will largely be dictated by its ability to find “truly special locations at the right price”, and will focus on “profitability rather than speed of roll-out.”
During the first half, the company saw a £0.4m exceptional gain relating to the redemption of outstanding preference shares, and raised £5.2m through a successful share placing. It had cash reserves of £3.35m at the period-end, and a net asset value of 30.5p per share.
Nigel Whittaker, chairman, said: “Using the proceeds of the placing we are focused on growing the profitability of the group through the opening of additional restaurants and we remain on track to deliver on our financial plan put in place prior to the placing in November 2005.”
Trading since the period end has been in line with expectations. The board is not recommending a dividend, in line with its policy to invest in the continued development of the business.
