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Morning Briefing for pub, restaurant and food wervice operators

Wed 9th Apr 2014 - Breaking News - Prezzo – we plan up to 30 new sites this year
Prezzo – we plan up to 30 new sites this year: Prezzo, led by Jonathan Kaye, is planning to open between 25 and 30 new restaurants this year. The company reported that its sales rose 15% to £166.5m in the 52 weeks ended 29 December with pre-tax profit up 11% to £20.4m (2012: £18.3m). Chairman Michael Carlton said: “We opened 28 new restaurants in 2013 (2012 – 31) and closed one unit (2012 – two) and therefore there were 237 (2012 – 210) restaurants at the end of the period. This included 194 trading as Prezzo, 37 Chimichanga restaurants and four units trading as Cleaver, a new concept which we launched in summer 2013. These openings provided us with our first representation in major population centres such as Belfast and Leeds, together with additional sites in Bath, Oxford and Glasgow. We also continue to open in successful leisure and retail developments such as the Whiteley Shopping Centre in Hampshire, Gloucester Quays and Bicester and in small provincial towns such as Rayleigh, Felixstowe and Kettering. This wide range of locations into which our brands can be introduced is one of the key strengths of our business. Summer 2013 saw us launch a new concept in Cleaver, which offers high quality, home-reared chicken, ribs and burgers from our open grill kitchen. Our first opening was in Cobham, in Surrey and this has been followed by three more units in Leatherhead, Wokingham and Oxford which together provide us with a test-bed for further development and refinement of the brand. Early signs and initial sales have however been encouraging. So far this year, we have opened one additional new restaurant in Ripon and we are also on site in a further six locations. Our property pipeline for 2014 is well-advanced and plans for 2015 and beyond are also taking shape. Once again, we would anticipate opening 25-30 new restaurants by the end of the year. Cashflow from operations was broadly in line at £30.8m (2012 – £31.3m) and after making corporation tax payments of £3.9m (2012 – £4.2m), there was £26.9m (2012 – £27.2m) available for investment or financing. During the year the cash outflow on property, plant and equipment was £26.1m (2012 – £24.1m), which covered capital expenditure for the fit out of new restaurants, as well as refurbishment and rebranding projects for the existing estate. This also included the purchase of one freehold property at a cost of £1.2m and we sold one leasehold site for cash proceeds of £0.1m (2012 – sold one freehold and three leaseholds for £1.4m). Overall there was a net cash inflow of £1.5m (2012 – £4.3m) and at 29 December net cash on the balance sheet had risen to £5.8m (2012 – £4.4m). Once again, our continued strong cash generation, together with a modest short-term borrowing facility and a portfolio of readily saleable freehold properties will provide us with sufficient flexibility and funds to comfortably fund our anticipated expansion plans for the foreseeable future. The warm welcome extended to our guests by the Prezzo team is absolutely paramount and we continue to place great emphasis on training and development for all levels of staff at our Training Academy. Finally, there are indications that the vital signs of the UK economy are improving, and therefore having delivered a continuous record of growth throughout its recent period of difficulties, there is every reason to be positive about our future performance. We have enjoyed an encouraging start to the year and with a strong site pipeline in place, the board is confident of further success in 2014.”
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