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Tue 30th Apr 2019 - PizzaExpress reports UK and Ireland underlying like-for-likes flat in 2018, group Ebitda falls 15.3%
PizzaExpress reports UK and Ireland underlying like-for-likes flat in 2018, group Ebitda falls 15.3%: PizzaExpress has reported underlying like-for-like sales grew 0.1% in the UK and Ireland, excluding the impact from adverse weather (down 1.0% unadjusted), in the year ended 31 December 2018. Group turnover grew 1.6% to £543.0m, compared with £534.2m the previous year. The company is making £1m investment for future growth across its brand, people, technology and product. Internationally, total sales were up 8.4% with international markets now generating almost 20% of group sales. The international company-owned estate grew to 104 sites with the opening of 26 restaurants in 2018. Sector-wide cost headwinds in the UK and “more challenging conditions” in some of its less mature international markets resulted in group Ebitda being down 15.3% to £80.2m. Group chairman and chief executive Jinlong Wang said: “Although 2018 was a challenging year for the casual dining sector, we are pleased with the overall group revenue growth of 1.6%. Sector-wide labour and property cost increases in the UK combined with more challenging conditions in some of our less mature international markets resulted, however, in a 15.3% decline in group Ebitda. In the UK and Ireland, the unexpected snow in the first half of the year and sustained period of heat in the second half impacted the whole industry. Outside these periods of extreme weather, we were pleased with our resilient underlying like-for-like sales growth of 0.1%, which includes a strong Christmas performance. We have recognised the need to continually innovate to attract existing and new customers. Our business has continued to invest in significant customer-led research to enhance our existing brand proposition with increased focus on brand-led content and optimising performance across digital channels alongside new product, menu and service innovations. To facilitate this, we opened our global innovation centre in London, which has enabled us to accelerate the development of new products such as our vegan and gluten-free menus as well as seasonal ranges. We have also invested in our people, with our newly developed leadership programme which all head office, field-based and restaurant managers have now completed. We opened four company-owned restaurants in the UK and Ireland in 2018 and are particularly excited about the recent reopening of our Langham Place restaurant in London. The restaurant showcases our new brand proposition with a theatre kitchen and defined bar space creating a new sociable pizzeria. Our business outside the UK became increasingly significant in 2018 and our international markets now contribute almost 20% of group sales. We have experienced challenges in China as we face intensified competition from local brands and we are focused on being even more responsive to rapidly changing consumer demands in this market. We do, however, remain confident in the long-term opportunity there and committed to our growth strategy. In 2018 we entered our first Tier 3 city, Nantong, and also started to innovate our format with a site converging casual and fast casual products and services at Hongqiao airport in Shanghai, as well as a new fine casual dining concept called ‘Meanwhile’, also in Shanghai. While we expect the UK and international markets to remain competitive, we are confident our focus on customer-led innovation and investment in our brand and people will put us in a strong position to succeed in this environment and continue to deliver a resilient performance.”

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