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Sun 30th Jun 2019 - FY sales fall 4.3% in year of transition for Carluccio’s
FY sales fall 4.3% in year of transition for Carluccio’s, ‘visible’ like-for-like sales improvement in past three months as Fresca programme takes shape: Carluccio’s, the Italian all day-dining restaurant and deli chain, saw sales decline 4.3% to £137.1m, with like-for-like sales down 3.1% in the year to 23 September 2018, a period the company, which underwent a company voluntary arrangement (CVA) during the 12 months, called transitional. Group Ebitda before exceptional costs for the period was £4.0m (excluding sites earmarked for closure from the CVA), as against £4.4m in the prior year. The Mark Jones-led business incurred material exceptional costs and impairments against the book value of restaurants, largely as a result of the CVA, totalling £20.4m at group level. The company said the majority of these items were non cash and pushed operating losses to £21.2m. The results fully account for the impact of the sites that were closed as a result of the CVA, before and after the financial year-end. As a result of the CVA, which gained the overwhelming support of the company’s creditors, 14 UK restaurant locations closed during the period. Since the year end, a further 15 UK restaurants have closed, leaving the core UK business at 74 locations. Internationally, a further 16 restaurants are operated, of which two are in Ireland, and 14 are managed by its franchise partner in the UAE. The company said the trading trend continued into the current financial year, albeit with visible improvements in the past three months across a number of metrics, including like-for-like sales and advance bookings. It said this recovery was expected to continue with the acceleration of the refurbishment programme, alongside menu innovations and ongoing operational improvements, which “pleasingly are also reflected in improving levels of customer sentiment scores”. Jones said: “By any stretch, this has been a challenging period for the company. We are extremely grateful for the resilience shown by our people, and for the support we have received from our investors and from our landlords in the restructuring of our restaurant portfolio. This has stabilised the business and given us the opportunity to restore and reinvigorate this great brand and we are very encouraged by the work we have undertaken to improve every facet of the business – including food quality and restaurant environments, and are pleased by the very strong and positive reaction to our initial investments.” The group’s principal shareholder, Landmark Group, has supported the turnaround plan with an extra £10m cash injection. Carluccio’s said its growth plans are underpinned by the roll-out of its “Fresca” programme, which combines a more premium dining experience with innovative menus and enhanced service. The company said: “The pilot investment site in Richmond has received excellent customer feedback with sales uplifts well ahead of expectations. Further Fresca investments have followed at restaurants in Bluewater Shopping Centre and Heathrow Terminal 5, with two more refurbishments planned this summer.” It said: “This has been a challenging and transitional year, and while we have stabilised the business, it is still relatively early in the turnaround journey. The completion of the CVA and the new investment programme has given us the opportunity to return this business to what the senior management believes is its rightful place in the UK eating-out industry; as a great place to work and to dine, a brand that champions fresh and delicious food, full of flavour and passion.”


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