Italian restaurant chain Prezzo saw pre-tax profit fall in 2008, despite a 22% rise in turnover, the company announced in a trading statement today.
While turnover for the year increased from £70.1m to £85.9m, profit before tax fell to £3.9m (2007: £7.7m).
During the year, Prezzo incurred a £7.6m charge for non-trading items (2007: £2.9m), primarily due to impairment of property, plant and equipment.
The group also saw a rise in cost of sales to £73m (2007: £57.9m), with administration costs up to £9.2m (2007: £4.9m).
Prezzo said it made a positive start in the first quarter of 2009, against a "cautious set of budget assumptions", but warned that costs would keep rising.
Chairman Michael Carlton said: "While some of the cost pressures anticipated only six months ago have now been partially alleviated, we will still face incremental overhead costs in 2009 and 2010."
Prezzo slowed the rate of its new openings in the second half of 2008, opening seven units in the period to make 17 in the year as a whole. Four units were closed and a number of opening options were not taken up.
The number of openings in 2009 will also be reduced to "a handful" and the existing estate is being examined, the company said.
By Daniel Thomas
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