Pre Close Trading Update
09/02/2009 7:00am
UK Regulatory
TIDMIRC
RNS Number : 9719M
Individual Restaurant Company PLC
09 February 2009
Individual Restaurant Company plc
("IRC" or "the Group")
Pre Close Trading Update
Individual Restaurant Company plc, a leading operator of 34 premium casual
dining restaurants throughout the UK trading under the Piccolino (23) and Bar &
Grill (11) brands, today announces its pre-close trading update for the
year-ended 31 December 2008.
Trading Update
Sales in December 2008, compared to the same period last year, were up 11%,
driven by the six new restaurant openings completed during the year. The new
restaurants comprised five Piccolino's: Birmingham (June); York (July); Hale
(September); Bristol (September); and Clitheroe (December), and one Bar & Grill
in Harrogate (November).
IRC has always maintained long term financial success is delivered by focusing
on the quality of our people, food, customer service and cleanliness of the
restaurants. The Group continue with its strategy meaning it has not been drawn
into discount based promotions. As a result there was no erosion to December's
gross profit margin against the same period last year.
At the time of the last market update on 29 September 2008, the Group reported
that trading conditions over the first half of 2008 were challenging and that
conditions had toughened in the first 10 weeks of H2. As the second half of the
year progressed, conditions became gradually more difficult. Encouragingly,
trading strengthened over the Christmas period, the critical trading period for
our business. Accordingly it is anticipated that results for the full year will
be in line with current market consensus at a trading level (EBITDA), but, as a
result of marginally higher depreciation and interest charges, towards the lower
end of the current market range at a profit before tax level.
Banking Facilities
The Group is financed by an GBP18.5m loan facility of which GBP2.7m was unused
at year-end. There are no capital repayments to be made on this loan in the
current year. The Group is not planning on increasing its senior banking
facilities in the year given the outlook for the current banking environment.
Brand Progress and Future Roll Out
In all aspects of the business, the Group continually strives to make progress
through innovation and the Board believes that significant progress has been
made in both brands in 2008.
Firstly, and most significantly, the Group has now experienced a lengthy period
of successful trading of both brands in the south of England (6 Piccolino's and
3 Bar & Grills).
Secondly, the Board believes the Piccolino brand has always set itself apart
from the competition through quality of design, food and service. In 2008 the
Group continued to move the brand forward. Piccolino trialled making fresh pasta
at Hale, Bristol and Clitheroe and in 2009 it is intended that this is extended
to a number of the other existing Piccolino restaurants. In addition, the Group
excluded pizza from the menu in the new openings at Hale and Clitheroe. These
actions have been very successful and significantly increased spend per head.
Looking ahead, leases have been signed on four sites, Aberdeen, Knutsford, the
City of London and Dorking. The Aberdeen site, which had been planned to open at
the end of 2008, experienced delays in planning and licensing. Openings in 2009,
including Aberdeen, will be funded out of cash flow and the existing bank
facility. The quantum and timing of openings will be determined by trading
performance and available headroom in our banking facilities.
Future Outlook
The Group anticipates that trading conditions will be more challenging in 2009
than 2008 with this being felt most acutely in the first half of the year. The
Group also believe gross margins will come under pressure as suppliers try to
offset their rising costs resulting from the weakness in sterling. In January, a
number of cost saving measures were introduced to offset these more challenging
times. Furthermore, the Group will benefit from the full year revenue and EBITDA
generation from the six sites opened in 2008, the majority of which were opened
at the back end of 2008.
The Board believes the brands, roll-out potential and business model are robust
and remains confident about the medium term prospects for the Group.
Preliminary Results
The Group's preliminary results will be announced on 30 March 2009.
Stephen Walker, Chief Executive of IRC, commented:
"I am pleased to report positive trading over the Christmas period. We have
taken a number of strong measures to ensure that we continue to be able to
expand and are operating more efficiently in the current market environment.
"Whilst we remain cautious in our outlook for the year ahead in line with other
operators, both of our brands have gained stature over the year. We remain
confident that the broad appeal of both brands will continue to underpin a
resilient performance from the Group over the medium term."
9 February 2009
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| Enquiries: | |
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| Individual Restaurant Company plc | 0161 839 5511 |
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| Steven Walker, Chief Executive | |
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| Vernon Lord, Finance Director | |
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| Altium | 0161 831 9133 |
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| Mike Fletcher | |
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| | |
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| College Hill | 020 7457 2020 |
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| Justine Warren | |
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This information is provided by RNS
The company news service from the London Stock Exchange
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