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Tue 1st May 2018 - PizzaExpress returns to like-for-like growth in UK and Ireland
PizzaExpress returns to like-for-like growth in UK and Ireland: PizzaExpress saw like-for-like sales growth in the UK and Ireland return to growth as they increased 0.4% in the year ended 31 December 2017 compared with a fall of 0.9% the previous year. Group turnover grew by 6.3% to £534.2m compared with £509.7m the previous year. Group like-for-like sales increased 1.4%. As expected, growth in international was offset by industry-wide cost pressures in the UK, leading to an 8.9% decrease in Ebitda to £94.6m. It said its estate in the UK and Ireland continued to grow with 13 openings while 25 sites were refurbished. The company said the international business had shown strong performance with like-for-like sales up 8.2%. There was a record 27 openings in equity markets and a further seven by franchise partners. It is now operating in eight cities in mainland China. PizzaExpress said it is demonstrating resilience in the UK while continuing to grow overseas. It added the longer-term growth fundamentals of the UK restaurant market remained compelling. Group chairman and chief executive Jinlong Wang said: “PizzaExpress has continued to progress in 2017, with group turnover and like-for-like sales growing on the prior year. We are delighted this year saw UK and Ireland like-for-like sales return to growth, while our international business delivered an exceptional performance with like-for-like sales increasing by 8.2%. As expected, the growth in international has been offset by the widely publicised sector cost headwinds in the UK, including higher food prices and wage increases as well as the rise in business rates and commercial rents; as a result, group Ebitda decreased by 8.9%. In the UK and Ireland, we continued to grow our estate and opened 13 restaurants in the year, including the first PizzaExpress site operated by our new franchise partner, Welcome Break, at Oxford Services. We also refurbished 25 sites to ensure they are as modern and appealing to our customers as they can be, including the complete transformation of our restaurant in High Holborn to the first of our new-look ‘PizzaExpress Live’ sites. We are very pleased with the performance of this site since it opened in August and the customer feedback has been encouraging. Throughout 2017, we have explored innovative ways to diversify PizzaExpress and reach new audiences, such as the trial of a PizzaExpress ‘Boxed’ concept, a mobile site able to provide a taster of the PizzaExpress experience at events such as the British Summer Time festival. We have also made improvements to our retail range, which continues to be popular among consumers – the PizzaExpress grocery range is one of the UK’s 100 biggest retail brands with retail sales having grown to over £100m per annum. Our international business continued to expand in the year, with a record number of 27 openings in our equity markets and a further seven restaurants opened by our franchise partners. We operate restaurants in over a dozen territories around the world and international now represents about 22% of the total group estate. A further example of growth in international markets is our entry into the Philippines market, which was agreed in December 2017 with the first site opening in February 2018. To achieve our international growth ambitions, we must understand our customers and their tastes in each market and adjust our offering accordingly. Food innovation plays a large part in this – for example, in China we introduced steak and fish dishes, and in the United Arab Emirates we introduced a signature pizza to cater for Arabic tastes. Another example of adapting our model, outside food development, is that in China we accept smartphone payments such as Alipay, a popular method in the country, in addition to the card payments favoured by European customers. Despite considerable recent negative sentiment surrounding the restaurant industry in the UK, it is my belief that the growth fundamentals of the sector remain sound. With consumers increasingly seeking to spend their money on experiences and an ever-growing popular interest in food, the casual dining market is well placed to continue to benefit from these trends in the long term, although we remain cautious about prospects in the nearer term. In challenging conditions, the strongest brands, like PizzaExpress, will prove resilient. But we don’t take this for granted – more than ever we are focused on supporting and developing our teams and we are continually seeking to better understand and meet our customers’ needs. We do this wherever we operate, whether this is in the UK or overseas, where there remains significant potential to grow PizzaExpress, especially in China where there is a growing middle class and demand for western brands like ours.”


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