Carluccio's has seen a 12% fall in half-year profits, as pressure on costs and falling consumer spending hit margins.
Announcing results for the six-months to 29 March, Carluccio's revealed that pre-tax profit had slipped to £2.5m compared with £2.8m a year before.
The company, which operates 42 stores in the UK and aboard, said it has been hit hard by Sterling's weakness against the Euro, as many of its products are imported directly from Italy.
The group also cited higher utility costs, partly due to end of a fixed-term energy contract, and higher staff costs down to the Government's new law preventing businesses including bank holidays within annual holiday allowance.
Carluccio's opened three new stores in Leicester, Bristol and Earlsfield in south-west London in the first half of the year, while its first Middle Eastern outlet opened in March.
Turnover was up more than 13% at £34.5m (2007: £30.4m). Chairman Stephen Gee said with approximately 100,000 customers visiting Carluccio's each day its prospects remained good despite the recession.
"This loyalty coupled with our unique all day trading model, our experienced management team supported by loyal and enthusiastic staff, give me confidence in the long term prospects of this business," he added.
By Chris Druce
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