Byron’s directors have said “material uncertainty” caused by difficult conditions “may cast significant doubt over its ability to continue as a going concern”.
The comments have been made in the burger chain’s financial results for the year to 25 June 2017, filed with Companies House, which reveal a pre-tax loss of £55m.
The report reads: “The directors are confident there will be an upturn in trade with the repositioning of the brand, and that identified cost savings can be achieved. However as noted in the strategic report trading conditions continue to be difficult and there is a risk that forecast sales will not be achieved and/or the identified cost savings are not achieved, or, if required, the company will not be able to raise additional funding. These matters gives rise to a material uncertainty which may cast significant doubt over the company’s ability to continue as a going concern.”
The losses compared to a £194,000 pre-tax profit the previous year and were put down to a number of factors including a decline in consumer confidence following the Brexit vote, increases to the National Living Wage, the apprenticeship levy, cost inflation, the devaluation of the pound and increases to business rates.
Negative publicity and staffing disruption also hit trading over the summer and autumn of 2016, following the removal of 35 staff from a training session attended by immigration enforcement officers. Byron’s alleged complicity in the raid saw the emergence of a #boycottbyron hashtag and protests at several branches, including the releasing of insects in its St Giles and Holborn sites.
Despite the profits slump Byron did see revenue increase by 9.3% to £88m in the period, mainly driven by the opening of six new sites taking the company to 71.
A spokesman for Byron said: “The liquidity statement in our financial filings is typical for a company in the hospitality sector which has recently undergone a CVA. We believe there are sufficient internal and operating opportunities available to Byron to withstand any potential shocks the sector may experience in the near future.
“Byron’s CVA process was successfully completed this month. Our brand and offer remains strong and distinctive, and with a smaller and more efficient restaurant estate we can continue to provide an outstanding burger experience for our customers and to develop and grow a sustainable and innovative business for the long term.”
Earlier this year Byron became the first high-profile casual dining brand to enter a CVA resulting in it exiting 19 loss-making restaurants, with rent reductions agreed on a further five sites.
In January this year Three Hills Capital Partners had acquired a majority stake in the company when private equity company Hutton Collins, which paid £100m for Byron in 2013, sold half of its holding.