TRG-owned Chiquito "trading poorly" with declining profits

27/11/2017 - 08:30
Mexican-inspired restaurant chain, Chiquito, has reported “poor” trading for 2016 with declining profits and operating margins across the group.

It listed poor proposition changes and operational issues affecting speed of service as reasons for a decline which saw the company go from making a profit after tax of £8.8 million in 2015 to making a loss of £8.6m 12 months later.

Despite turnover of £99 million, a £1.9m rise on 2015, £18.6m worth of exceptional items, including impairment on fixed assets of £11m, meant the company finished the year in the red.

Chiquito is part of The Restaurant Group plc (TRG), the FTSE 250-listed operator of the Garfunkel’s and Frankie & Benny’s chains.

Chief executive, Andrew McCue, said that following enquires, Chiquito had received insurances from it parent company that it would receive financial support for “at least the next 12 months”.

He said: “Based on the Company’s plans for 2017 and after making enquiries, the directors have a reasonable expectation that the Company has adequate resources to continue [Chiquito’s] operations for the foreseeable future.”

Chiquito follows other TRG businesses that had difficult trading years, after both Frankie & Benny’s and Coast to Coast reported declining like-for-like sales and profits for 2016.

Overall, TRG went from making an operating profit of £71.3 million for 2015 to making a loss of £34 million 12 months later- a drop of 147.6%.

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