Individual Restaurant Company, owner of the Piccolino’s and Bar & Grill brands, is planning to open at least four new sites this year despite seeing profits fall by more than half in 2008.
The group’s pre-tax profits fell 55 per cent in 2008 to £1.15m due to increasing food and drink costs, the opening costs for its six new sites being higher than expected and extra costs incurred by its Birmingham site.
However, Steven Walker, IRC chief executive, said it was a `creditable result’ in a ‘challenging trading period’ and said the first 13 weeks of trading this year had been encouraging.
He said: “Whilst trading conditions are likely to remain tough particularly in the first half of 2009, current trading is slightly ahead of management expectations. The measures we have taken to evolve both of our brands are proving successful. This, together with an ongoing focus on tight cost control, will continue to underpin a resilient performance from both brands and the directors remain confident about the future prospects for the group."
IRC opened six new restaurants in 2008, bringing the estate up to 34. The leases for four sites in Aberdeen, Knutsford, the City of London and Dorking have been signed and they will open this year funded by cash flow and the company`s existing bank facilities.
In a preliminary statement for the financial year to December 31 2008, chairman Robert Beare said the company hoped to save £2m in 2009 through cost saving initiatives, but would not resort to discounting to drive trade as many operators have done.
He said: “The Group will continue with its strategy of avoiding the margin erosion resulting from such policies, concentrating instead on the quality of its people, food, customer service and restaurant cleanliness.
"Nevertheless, the Group expects to come under further gross margin pressure in both food and beverage as suppliers strive to offset their rising costs resulting from the weakness in Sterling. A number of utility contracts are also subject to renewal in the year."
The company said it saw strong potential for its Bar & Grill concept and that a fresh pasta trial at three Piccolino restaurants had been a success and would be rolled-out to other sites this year.
Revenue for 2008 across the group rose 17 per cent to £52.5m.