Print   



Individual Restaurant Company plc

('IRC' or 'the Group')

Pre Close Trading Update

Individual Restaurant Company plc, a leading operator of 34 premium casual dining restaurants throughout the UK trading under the Piccolino (23) and Bar & Grill (11) brands, today announces its pre-close trading update for the year-ended 31 December 2008.

Trading Update

Sales in December 2008, compared to the same period last year, were up 11%, driven by the six new restaurant openings completed during the year. The new restaurants comprised five Piccolino's: Birmingham (June); York (July); Hale (September); Bristol (September); and Clitheroe (December), and one Bar & Grill in Harrogate (November). 

IRC has always maintained long term financial success is delivered by focusing on the quality of our people, food, customer service and cleanliness of the restaurants. The Group continue with its strategy meaning it has not been drawn into discount based promotions. As a result there was no erosion to December's gross profit margin against the same period last year.  

At the time of the last market update on 29 September 2008, the Group reported that trading conditions over the first half of 2008 were challenging and that conditions had toughened in the first 10 weeks of H2. As the second half of the year progressed, conditions became gradually more difficult. Encouragingly, trading strengthened over the Christmas period, the critical trading period for our business.  Accordingly it is anticipated that results for the full year will be in line with current market consensus at a trading level (EBITDA), but, as a result of marginally higher depreciation and interest charges, towards the lower end of the current market range at a profit before tax level.

Banking Facilities

The Group is financed by an £18.5m loan facility of which £2.7m was unused at year-end. There are no capital repayments to be made on this loan in the current year. The Group is not planning on increasing its senior banking facilities in the year given the outlook for the current banking environment. 

Brand Progress and Future Roll Out

In all aspects of the business, the Group continually strives to make progress through innovation and the Board believes that significant progress has been made in both brands in 2008.

Firstly, and most significantly, the Group has now experienced a lengthy period of successful trading of both brands in the south of England (6 Piccolino's and 3 Bar & Grills). 

Secondly, the Board believes the Piccolino brand has always set itself apart from the competition through quality of design, food and service. In 2008 the Group continued to move the brand forward. Piccolino trialled making fresh pasta at Hale, Bristol and Clitheroe and in 2009 it is intended that this is extended to a number of the other existing Piccolino restaurants. In addition, the Group excluded pizza from the menu in the new openings at Hale and Clitheroe. These actions have been very successful and significantly increased spend per head.

Looking ahead, leases have been signed on four sites, Aberdeen, Knutsford, the City of London and Dorking. The Aberdeen site, which had been planned to open at the end of 2008, experienced delays in planning and licensing. Openings in 2009, including Aberdeen, will be funded out of cash flow and the existing bank facility. The quantum and timing of openings will be determined by trading performance and available headroom in our banking facilities.  

Future Outlook

The Group anticipates that trading conditions will be more challenging in 2009 than 2008 with this being felt most acutely in the first half of the year.  The Group also believe gross margins will come under pressure as suppliers try to offset their rising costs resulting from the weakness in sterling. In January, a number of cost saving measures were introduced to offset these more challenging times. Furthermore, the Group will benefit from the full year revenue and EBITDA generation from the six sites opened in 2008, the majority of which were opened at the back end of 2008.  

The Board believes the brands, roll-out potential and business model are robust and remains confident about the medium term prospects for the Group. 

Preliminary Results

The Group's preliminary results will be announced on 30 March 2009.  

Stephen Walker, Chief Executive of IRC, commented:

'I am pleased to report positive trading over the Christmas period. We have taken a number of strong measures to ensure that we continue to be able to expand and are operating more efficiently in the current market environment.  

'Whilst we remain cautious in our outlook for the year ahead in line with other operators, both of our brands have gained stature over the year.  We remain confident that the broad appeal of both brands will continue to underpin a resilient performance from the Group over the medium term.' 

9 February 2009

Enquiries:
Individual Restaurant Company plc	0161 839 5511
Steven Walker, Chief Executive
Vernon Lord, Finance Director
Altium	0161 831 9133
Mike Fletcher
College Hill	020 7457 2020
Justine Warren

ENDTSTILFFDFTIRIIA