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Mon 12th Sep 2016 - Prezzo reports revenue up 13%
Prezzo reports revenue up 13%: Prezzo, which is backed by TPG Capital, has reported revenue increased to £213,812,000 for the year ending 3 January 2016, compared with £189,890,000 the year before. Profit before tax rose to £21,715,000, compared with £18,525,000 the previous year. The company had 276 restaurants at the year-end, up from 259 the year before. The company stated: “It should be noted that this is the first financial year that we have completed since a change in ownership in the business and there have been a number of changes to the cost structure, which mean that the 2015 figures are not strictly comparable with the prior year. In addition, 2015 benefited from an additional week of trading. We have continued to increase the representation of both our established brands across the UK during 2015 via a continued programme of organic openings and at 3 January 2016 there were 276 restaurants (2014 – 259) in the estate. For the 53 weeks ended 3 January 2016, revenue increased 13% to £213.8m (2014 – £189.9m) and ‘adjusted’ profit before tax was broadly in line at £23.1m (2014 restated – £23.3m). Gross (or restaurant) profit increased by 17% to £35.7m (2014 restated – £30.6m) and gross profit margin was 16.7% (2014 restated – 16.1%), reflecting strong new openings and tight control of branch costs. Excluding the cost of non-trading items, administration expenses increased by 72% from £7.3m to £12.5m, rising from 3.8% to 5.9% of revenues, reflecting increased headcount as the build-out of certain key support functions – property services, marketing, IT and health and safety. As a result, ‘adjusted’ operating profit was broadly flat at £23.2m (2014 restated – £23.3m) and adjusted operating margin (before non-trading items) was 10.8% (2014 – 12.3%). The overall charge for non-trading items was only £104m compared with a £4.8m charge in the prior period. However, this included a £6.9m profit realised on the disposal of a portfolio of 21 freehold properties and £3.7m of expenses, which were incurred in connection with the acquisition of the business. There was also an impairment charge of £3.5m against the value of property plant and equipment (2014 – £4.6m). The net book value of property plant and equipment reduced from £133.8m to £121.0m as the net book value of disposals at £24.0m (2014 – £3.2m) exceeded the movement arising from new asset additions of £25.3m (2014 – £21.8m) less the annual depreciation charge of £10.6m (2014 – £10.1m) in the period. This was primarily due to the freehold property disposal. Trade and other receivables increased sharply from £7.8m to £29.4m, principally as a result of inter-company loans advanced to the immediate parent company. With the remainder of the balance sheet broadly in line with prior years except for reflecting the general growth in the business, the net asset position remained healthy at £123.0m (2014 – 121.3m), including cash and cash equivalents of £12.4m (2014 – £14.8m). Settling transaction costs and finance costs on behalf of the parent company led to the creation of an intercompany balance and a working capital cash outflow of £19.5m and therefore after tax, cash inflow from operating activities and available for investing or financing was reduced to £10.6m (2014 – £30.3m). A dividend of £20.0m was paid out of the £29.8m net proceeds from freehold property sales and after a £4.0m (2014 – £0.8m) cash inflow from the issue of new ordinary shares and total capital investment of £26.8m (2014 – £24.1m), there was a cash outflow of £2.3m (2014 – £8.9m cash inflow) and net cash on the balance sheet stood at £12.4m (2014 – £14.8m). We will continue to grow the business via selective new units openings across the UK and also now in Ireland. With a number of important initiatives to drive our top line and enhance margins, together with tight control over operating costs we expect to deliver further growth for our investors.”

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