The Richoux Group has begun converting its Dean’s Diner sites to a new American diner concept, Friendly Phils.
The company revealed the strategy in its report on the 52 weeks to 25 December, during which revenue grew 2.2% to £13.32m but adjusted EBITDA fall to £200,000, from £1.64m the year before.
The now 18-strong Jonathan Kay-led group reported a net loss for the period of £6.7m (2015: profit £0.37 million). It said the decrease largely reflected the impairment charge incurred in the year of £5.04m, reorganisation costs of £510,000, and pre-opening costs of £100,000.
As part of a strategic review, the group has begun rebranding some restaurants.
The group currently has two Friendly Phil’s restaurants, in Hempstead Valley which opened in March 2017 and Port Solent, which opened in April 2017. Both were previously Dean’s Diner restaurants.
The three remaining Dean’s Diners; in Chatham, Braintree and Fareham will be converted to Friendly Phil’s restaurants in the coming months. The Dean’s Diner restaurant in Bicester was closed in November 2016 and sold in January 2017, while the restaurants in Trowbridge and Yate were closed in November 2016. The Dean’s Diner restaurant in Orpington was closed in March 2017 and the lease was surrendered in April 2017 for a reverse premium of £220,000.
The Group currently has seven Richoux restaurants in Knightsbridge, Mayfair, Piccadilly St John’s Wood, Gloucester Arcade, Port Solent, and Chislehurst. The Port Solent and Chislehurst restaurants were previously Villagio restaurants, and were converted into Richoux restaurants in February and March 2017 respectively.
It also has four Villagio restaurants in Andover, Basildon, Hammersmith, and Chatham. The Villagio restaurant in High Wycombe was closed at the end of December 2016 and sold at the end of January 2017.
It also has two Italian restaurants; one trading as Zippers Bar, Restaurant and Grill in Chatham, and one trading as Zintino in Canterbury.
On the outlook, chairman Simon Morgan said: “Like many restaurant groups in the casual dining sector, trading in the first quarter of this year has been difficult. In addition, during this period trading in some of our restaurants was interrupted whilst we converted or refurbished them. The impact of temporary closures will continue during the second quarter. Whilst our new Richoux and Friendly Phil’s restaurants have only been trading for a brief period, the early signs from them are encouraging.
“The cost of converting or refurbishing restaurants and of closing underperforming restaurants, the reduction of income due to temporary closures and the current trading climate have led the Board to conclude that it will need to approach shareholders for further funds in due course. The Board has had informal discussions with a number of the Company’s key stakeholders, who have indicated that it would be their intention to support such a fund raising. We propose to seek the necessary authorities to allot shares in connection with such a fundraising at our 2017 Annual General Meeting.”