Belgo Group warns of weak trading to come after attacks
Restaurant operator Belgo has announced a drop in full-year profits and warned of continued weak trading in the new financial year following the 11 September assaults.
Despite a 12% increase in turnover to £40m, pre-tax profits before exceptional items fell by 6.4% to £4.3m in the year to 1 July.
But taking into account a one-off exceptional charge of £3.7m relating to new accounting standards and a £1.2m charge relating to the group's sale of its stake in the New York Belgo restaurant, the company recorded a £1.4m pre-tax loss.
Luke Johnson, chairman of Belgo, said the year had been difficult for the company. He added that weak trading had continued in parts of the group since the year-end and was worse than during the same period last year.
Johnson said that, while the Strada pizza chain and Caprice Holdings, which includes the Ivy, Le Caprice and J Sheekey, had performed well, other outlets in the division had shown a significant slowdown in the last quarter of the financial year.
"London suffered a significant decline in inbound tourism owing to the foot-and-mouth crisis, the strong pound and the US stock-market fall, " said Johnson. "This had a sharp impact on elements of our business during the second half of our financial year."
He added that the Belgo mussels-and-chips restaurants and Bierodrome bars had seen the greatest effect from the downturn in the economy and the reduction in tourism. The company's flagship site, Belgo Centraal in Covent Garden, London, was still trading "reasonably well", despite a drop-off in sales in recent months.
Johnson thought Caprice Holdings and Strada would prove more resilient in any UK recession following the attacks on the USA. The company now plans further expansion of the Strada chain.
Belgo now intends to change its name to Signature Restaurants. The company says the Belgo name is no longer representative of the majority of its activities. The name change is subject to shareholder approval.
by Samantha McClary
