The casual dining chain operator of brands including Zizzi, ASK Italian and Coco di Mama saw its earnings drop by 1.3% in the year ending 1 July 2018, despite an increase in sales of 8.5%.
Azzurri Group, which oversees a total of 290 sites across the UK and Ireland including two Radio Alice pizza restaurants, confirmed group sales had risen to £279.8m.
But its EBITDA margins had tightened to 13.2%, down from 14.5% the previous year. Adjusted EBITDA, including allowances made for 2018's 53-week financial year, stood at £37m down from £37.3 in 2017.
However despite caution in the casual dining market Azzurri brands continued to expand. Eight more Zizzis were opened in the period, along with three ASK Italians and four Coco di Mamas. In total 33 sites were refurbished.
CEO of Azzurri Group Steve Holmes said part of the sales growth came from adapting the group's offering, adding that vegan food "now comprises 8% of our overall sales and continues to grow strongly".
He said: "I am pleased to report that 2018 was another successful year for Azzurri as the group continues to grow despite the challenging environment faced by the UK casual dining market. We delivered like-for-like growth across all of our brands. We continue to consistently perform ahead of the industry benchmark, the Peach Restaurant Tracker.