Italian restaurant group Prezzo recorded a pre-tax loss of £65.7m in the year leading to its Company Voluntary Agreement (CVA) that saw it close a third of its sites.
The loss in the 52 weeks to 31 December 2017 compared to a profit of £5.1m the previous year.
Financial results filed with Companies House showed a fall in revenue from £218.6m to £211.6m, while operating profits dropped from £23.2m in 2016 to £6.6m last year.
Early this year Prezzo agreed a CVA with creditors closing 104 restaurants – including the entire Chimichanga brand. The group was left with a “core” portfolio of 190 restaurants.
Annual accounts read: “2018 has proved a challenging year for Prezzo and the sector. The impact of snow, World Cup and hot weather over the summer, along with declining consumer confidence has been well documented by our competitors. In addition Prezzo has faced the challenge of a CVA process which is now complete. We successfully launched a new food menu in September which has improved out offering and we are very encouraged by the revenues from our refurbished restaurants which are significantly outperforming the rest of the Prezzo portfolio.”
Since January the brand has refurbished 11 restaurants and reported that the financial returns of nine restaurants completed to date in 2018 are encouraging and ahead of the investment case.
The group identified principal risks as a decline in consumer confidence, the increased National Living Wage, supply chain uncertainty and the tightening of the labour market post Brexit.
The year also saw the departure of CEO Jon Hendry-Pickup with Karen Jones appointed executive chairman in June 2018 to work with the management team on the execution of the transformation plan. Jones was a co-founder of Café Rouge and more recently chief executive of pub company Spirit Group.