Prezzo, the operator of the chain of Italian restaurants, has this morning reported a 1.4% fall in adjusted pre-tax profit to £5.1m for the first half of 2009, down from £5.2m the year before.
Unveiling its interim results for the 26 weeks prior to 28 June the operator, which is led by chief executive Jonathan Kaye, said revenue had grown by 5.5% to £43.7m, up from £41.4m.
Adjusted ebitda for the period was flat at £7.1m.
The group, which also operates the Mexican format Chimichanga, said it had experienced a “particularly challenging climate”.
Michael Carlton, Prezzo’s chairman added: “Although trading in the early months of 2009 was perhaps better than we had feared, it is fair to say that the UK consumer remains subdued and we believe that there are as yet few signs of any sustained recovery in confidence.”
Overall branch profit margin was 13.5%, compared with 14.3% in 2008, and Carlton said: “We consider this to be a strong result as, in line with our competitors, we have implemented an element of promotional activity to drive top line sales to suit the demands of the wider economic climate.”
The company confirmed it had opened no restaurants in the first half of the year, as it had planned in 2008, but added it had recently completed on its first opening in the second half and there were several more in the pipeline.
It closed three restaurants during the period and combined two sites in Lincoln, meaning the group now trades from 137 outlets.
Net cash generated from operations was 25% lower at £7.1m, down from £9.5m, but Prezzo said this was due to a one-off cash outflow of £500,00 and certain other working capital movements and said it “does not represent any deterioration in our working capital management.”
During the period, there was a cash outflow of £1.3m to acquire property, plant & equipment, with approximately £1m of this related to the fit-out of new branches that were opened before the end of 2008.
There was a net cash inflow of £4.8m in the period and as at 28 June 2009, net cash balances had risen to £13.9m (2008 - £5.0m).
As in previous years, Prezzo said no interim dividend would be paid
