New rules to blame for drop in Giardino profits

The Giardino Group, which operates the Café Giardino, Pellini, Auberge, Azzurro and Carpaccio brands, has blamed new accounting standards for forcing it to cut its reported operating profits by £3m to £722,000 for the 18 months to January because of poor trading in some of its new and old outlets.

Without the provision, operating profits for the 18 months would have been reported as £4m on a turnover of £39.2m. For the 12 months ending in January, turnover was up by 13.3% at £26.4m.

Finance director Ron Sutcliffe said: "Very few people have applied the new rules under Financial Reporting Standard 11, which requires people to cut the value of outlets that make a loss."

The company, which added eight outlets over the 18 months, operates 57 cafés and restaurants. Some of the newcomers failed to perform well and are part of a cluster of seven that are up for sale, although the company admitted that the disposal programme "had been slow".