‘The outlook for Prezzo is positive'

However, revenue rose from £95m to £135m and an increase in menu prices and cost-saving measures saw gross profit margin widen from 31.2% to 35%.

Following the restructuring, Prezzo now runs 97 sites which the management team believed could deliver "sustainable growth for the future".

Writing in its latest accounts, Challenger said the chain was back in the black in 2023 and planned to continue refurbishing restaurants in 2024.

He added: "With underlying supply issues of labour easing, inflation beginning to stabilise, the recruitment of a new executive team completed and locked-in deflationary benefits in utilities for 2024 and 2025, the outlook for Prezzo is positive."

Prezzo was founded in 2000 and grew to 300 UK restaurants amid the casual dining boom in the late 2010s.

But like many of its rival chains, it has significantly cut the size of its estate over the last six years.

In 2018, it closed 94 sites through a Company Voluntary Arrangement (CVA), including its Tex-Mex brand Chimichanga.

Investment firm Cain International acquired the business out of pre-pack administration in 2021 with the closure of a further 22 sites.

Challenger told the Telegraph in January Prezzo was looking at launching a range of takeaway pasta shops in train stations amid challenges in the casual dining market.

He said that while the group could grow to around 120 restaurants it would never return to its previous peak size.