Azzurri Group upbeat about future of restaurant chains despite £16.4m losses
Azzurri Group, the owner of Zizzi and ASK Italian restaurant chains along with Coco di Mamafood-to-go chain, reports increased yearly losses even though they saw a sales boost.
The company revealed their pre-tax losses expanded to £16.4 million for the year leading up to July 2 2023, this is over triple the £4.2 million losses from the prior year. Despite running at a loss, the group reports a 9% surge in total turnover, hitting £257.8 million.
In addition to accumulated debt interest payments due to raised interest rates during the year, business investments contributed to their losses.
The firm disclosed that it had seen a 21% jump in underlying earnings before interest, tax and exceptional items. Azzurri, which purchased Boojum, an Irish-based Mexican restaurant chain last June, said Christmas trading since its year-end was "exceptional", and reported growth in like-for-like sales were in the "mid-teens".
They predict "strong" revenue growth and underlying profitability for the current financial year. Azzurri said: "The positive trading momentum has continued into the current year with an exceptional performance over the Christmas period. Overall, we remain confident of delivering another year of revenue and profit growth."
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The company revealed it spent £22.2 million on improving its restaurants, stores and tech systems, as well as expanding Coco di Mama into a national delivery brand. The annual accounts also showed an increase in staff numbers across its 230+ restaurants and shops, with over 740 new employees bringing the total to 5,693 in 2022/23.
Stephen Holmes, the boss of Azzurri Group, said: "2023 has been a strong year for Azzurri with growth in revenues and VAT-adjusted profits." He added that their success was due to continued investment in their outlets, developing top-notch technology, transforming Coco di Mama into a national delivery brand and focusing on efficiency.
He also said that the current year started off well, especially with a successful Christmas season. This news comes amidst rumours that Azzurri's private equity owners, Towerbrook Capital Partners, are considering selling the restaurant business.
In December, it was reported that Towerbrook had started discussions with investment bankers about a potential sale in 2024. However, on Monday, the group stated that "there is no sale process at the moment".
Azzurri's annual accounts indicate that it managed to counteract rising costs in the hospitality sector, with food and drink inflation at 1.8% in 2022/23, compared to over 15% in the wider market. In 2020, the group was saved after it undertook a series of actions including efficiency savings and contract renegotiation.
Towerbrook rescued the group through a pre-pack administration deal after it fell into insolvency. This deal ensured the survival of 225 restaurants and shops, safeguarding 5,000 jobs. Before this, Bridgepoint, another private equity firm, owned Azzurri.
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