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Richoux annual losses narrow but revenues drop
Restaurant group Richoux posted a narrowing of its full-year losses but a drop in turnover as restaurants were shut or rebranded.
In the 53 weeks to 3 December 2017, pre-tax losses narrowed to £4.5m from £6.7m the year before, even as turnover declined 17.4% to £11m. Meanwhile, adjusted earnings before interest, taxes, depreciation and amortisation came in at £0.8m versus £0.2m the previous year.
During the year, the board undertook a strategic review of all of the group's restaurants and operations, leading to certain restaurants being rebranded or closed, which contributed to a significant impairment charge and onerous lease provision.
Richoux, which owns Friendly Phil's and four Italian style restaurants operating under Villagio and Zintino brands, currently has 17 restaurants trading.
"Like many restaurant groups in the casual dining sector, trading during 2017 has been difficult," the company said,
"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 2018. 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 all have had an impact on the group's cash balances."
Richoux said it continues continue to focus on cost reduction and, where necessary, will continue refining its portfolio.
"We are also conscious that, in this trading environment, opportunities may also arise for companies like ourselves which are ungeared. The board has had informal discussions with some of the company's key stakeholders, who have indicated that, if during the course of the year the board concludes that further funds are required, 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 2018 annual general meeting."
At 1111 BST, the shares were 18% to 7p.