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Wed 4th Jul 2018 - Carluccio’s launches substantial investment programme in wake of CVA
Carluccio’s launches substantial investment programme in wake of CVA: Carluccio’s is to launch a substantial investment programme at existing restaurants. The revitalisation will see more than 60 sites receive significant investment, underpinned by £10m of new funding into the business from majority shareholder Landmark Group. The schemes will see up to £250,000 invested in each location. The programme will also refresh brand standards and ongoing food development and will be overseen by the new senior management team. The launch of the programme follows the passing of a 28-day “challenge” period in the wake of the Company Voluntary Arrangement (CVA) process. In May, the company’s creditors voted overwhelmingly in favour of the restructuring, which will see the group exit up to 30 loss-making sites from its 103-strong UK business. The CVA process followed a strategic review of the business led by new chief executive Mark Jones, who joined the business in January. He said: “This is an important milestone for the Carluccio’s business and our team, allowing us to look ahead positively to the future with a clear plan to reassert and build on our credentials as the UK’s leading Italian restaurant and food company, built on fresh, flavourful dishes. The injection of new funding will drive an extensive programme that will elevate the guest experience through enhanced design, food and service. This project will be underpinned by our brand ethos of ‘minimum fuss, maximum flavour’, which was so passionately championed by our founder Antonio. I would again like to express sincere thanks to our landlords for their support during the process and our majority shareholder Landmark Group for backing the management team’s vision for the business.” The latest developments coincide with the posting of annual accounts by the group for the 12 months to 24 September 2017. During the period, and as previously announced, the company encountered some significant industry-wide challenges due to a combination of well-publicised structural cost increases across property, goods and employment, as well as intense competition in the market. As a result of these pressures, adjusted group Ebitda dropped to £6.5m (2016: £13.2m) on group revenues of £138.2m (2016: £140.9m). In the period an impairment of £22.3m was made against the book value of the restaurant portfolio to reflect pending closures as part of £24m on non-trading, largely non-cash items that were incurred as one-off losses. Of the 2017 figures, Jones said: “While these numbers are somewhat historical now, the decrease in underlying profit last year did graphically illustrate the requirement for us to create a more focused group, to divest from loss-making sites, and to invest significantly in our core business. I am pleased to be able to report this progress in the intervening period.”

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