Pizza Hut Restaurants UK’s auditors have fired a warning shot over the company’s future amid concerns over its mounting debt pile.
The group, which is the largest British franchise of the US restaurant chain, and operates sit-down restaurants under the brand rather than takeaways, is in talks to refinance almost £31m of its £73m debt pile which it must repay by next April.
It comes after the company secured relaxed terms on its loans with banking partners. In its latest accounts, Pizza Hut UK warned there was a chance it could still breach its loan agreements in a “severe but plausible downside scenario.”
As a result, PwC, the company’s auditor, warned that there was “material uncertainty which may cast significant doubt about the company’s ability to continue as a going concern.”
However, PwC added: “The company enjoys excellent relationships with its lenders, some of whom are equity shareholders in the group and the directors anticipate that any potential breach could be waived in advance of occurring.”
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