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Morning Briefing for pub, restaurant and food wervice operators

Thu 6th Oct 2022 - Exclusive: PizzaExpress in ‘solid position’ as it builds back from pandemic, substantially reduces losses
Exclusive – PizzaExpress in ‘solid position’ as it builds back from pandemic, substantially reduces losses, Ebitda above pre-pandemic levels: PizzaExpress has said it is in a “solid position” as the business builds back from the pandemic. The company reported turnover increased to £322,907,000 for the year ending 2 January 2022 compared with £237,878,000 the previous year as trading continued to be impacted by the covid pandemic. UK and Ireland revenue was up to £279,630,000 from £191,454,000 the year before with turnover from international operations falling from £46,424,000 to £43,277,000. Group Ebitda was up to £91.6m from £39.2m the year before, which was also higher than the £71m reported in 2019 – the last full year before the pandemic and before the business underwent a company voluntary arrangement that saw it shut almost 100 UK restaurants. UK and Ireland Ebitda rose to £80.7m from £25.1m the year before. Pre-tax losses substantially narrowed to £17,350,000 from £299,467,000 the previous year. The business received government grants of £21,274,000 compared with £57,380,000 the year before. PizzaExpress said it was “in a solid position with strong liquidity, good cost control and cash management”. It added the company would continue to mitigate the well document cost pressures across the sector as it enhances the PizzaExpress brand and delivers on its omnichannel customer focused strategy. Its PizzaExpress Club app has reached one million members and continues to grow and recently launched its autumn menu as it looks to “continually enhance its market leading offer”. The company stated: “Despite the further covid-19 restrictions in 2021, we were able to focus on executing our customer focused strategy covering accelerated like-for-like growth, rapid digital transformation, market share growth, improved unit economics, capital efficient growth across licensed businesses and a performance focused culture. We continue to evolve the PizzaExpress brand and relationships with our customers while retaining our core strengths. We have shifted away from discounting to targeted customer relationship management. Building on the My PizzaExpress app, we launched the PizzaExpress club, a loyalty programme, in December 2021. In early 2022, we released a full rebrand. We have continued to leverage key partnerships to extend marketing reach financially through brand association. This can be seen in our partnership with Deliveroo and expanded ranges available to retail customers at major UK supermarkets. We have built a pipeline of attractive sites to enable expansion of our UK restaurant footprint. We are continuing to invest in our existing UK restaurant estate with a rolling refurbishment programme across multiple years. We continue to pursue franchise opportunities in markets where we believe working with a local partner will enable the business to grow successfully, without taking management resources away from our core markets. During 2021, we opened three new company-owned restaurants, two in the UK and one in Hong Kong. We also opened six new restaurants with our international franchise partners in Spain, Indonesia, Kuwait and India, and transferred three from Singapore. We closed five restaurants in the UK and Ireland as well as one site in Hong Kong. We also closed five international franchise restaurants. We completed a review of our supply chain during 2021, which now stands us in a good position as we face the cost pressures the hospitality industry is experiencing to date in 2022.” As of 3 July 2022, the UK & Ireland estate stood at 363 restaurants – including six UK franchise sites – and the international estate stood at 91 – including 56 franchise sites. The group further strengthened its financial position in the reported year where it finalised the issue of £335,000,000 of July 2026 notes and secured an additional revolving credit facility (RCF) of £30,000,000. The RCF remained undrawn throughout the period. A PizzaExpress spokesperson told Propel: “We were pleased with our trading performance during the period, and we thank our employees who did a fantastic job delivering the PizzaExpress experience our customers know and love. Our priority during the period, which was impacted by covid-19 trading restrictions, was the health and safety of our employees and customers. At PizzaExpress, we are further developing our omnichannel strategy and we recognise that delivery, retail, franchise and international all have significant transformational opportunity to drive growth and we start the next chapter at PizzaExpress.”

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