Pre-tax profits fall at Côte as it implements greater staff rewards

08 May 2017 by
Pre-tax profits fall at Côte as it implements greater staff rewards

Pre-tax profits at casual dining chain Côte fell by nearly £4m for the year to 31 July 2016, as it implemented a staff rewards scheme that ate into its administrative costs.

In its financial results for the 52 weeks ended 31 July 2016, the business enjoyed revenue growth of 12.5%, climbing to £121.5m, up from £108m the year before, which was 53 weeks long and contained an extra week of trading.

However, pre-tax profit for the 52 weeks ended 31 July 2016 fell back to £10m, compared to £13.9m in the preceding 53-week period.

Côte said that during 2015/2016, it had invested in a reward and incentivisation scheme for its restaurant teams to "ensure they are among the best remunerated in the sector". The company said this would enhance service and drive growth for the long term but that it had pushed administration expenses to £42.8m from £37.1m.

The move follows the firm coming under pressure in the press when the Evening Standard revealed it had a policy under which a 12.5% service charge was automatically added to every bill but never led to waiters' take-home pay rising or falling in line with how busy the restaurant was. The company scrapped the policy after an internal review showed that fewer than one in five staff wanted to keep the system. A new tronc system was subsequently set up for all the service charges to be pooled and handed out to staff.

Côte opened 15 restaurants in 2015/16, taking it to 86 sites.

Côte to open second Limeyard site in Staines >>

Côte smashes £100m turnover for first time >>

Restaurants may be forced to hand over all tips to employees, following government review >>

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