Italian restaurant chain Prezzo has scaled back its new openings programme and earmarked several sites for disposal as trading conditions on the UK's high streets worsen.
In the company's six month results statement today, chairman Michael Carlton said the first half of the year had "provided some of the most challenging trading conditions that the company has seen since its formation in 2000".
While Prezzo launched 10 new sites in the first half of the year, it also closed three underperforming stores and paid an impairment charge of £1.8m in preparation for the disposal of four more.
This, along with non-operating costs in regards the termination of a lease and aborted site development costs, saw pre-tax profit fall 38% to £2.9m (£4.7m).
Stripping out non-operating costs, adjusted pre-tax profit was 8.8% higher at £5.2m (2007: £4.8m). Turnover increased 27.3% to £41.4m (2007: £32.5m).
Prezzo, which has opened four new restaurants since the start of the second half of the year, will open only three more at most this year as the credit crunch bites.
Jonathan Kaye, chief executive of Prezzo, said: "I am pleased to report a robust set of results in spite of ongoing challenging trading conditions.
"New openings are performing well and whilst further cost challenges lie ahead, we remain confident of a satisfactory outcome for the current year."
The company also confirmed that talks to potentially take it private initiated by members of the management team were ongoing.
By Chris Druce
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