The owner of the daily food chains Zizzi and Ask Italian on Monday reported an increase in year-round sales despite headwinds facing the sector, but margins continued to squeeze.
For the year to July 1, total sales in Azzurri Group – which also operate Coco di Mama and Radio Alice and owned by the private equity company Bridgepoint Capital – increased 8.5 percent to SEK 279.8 million compared to last year, as growth over all brands.
However, earnings before interest rates, interest rates, depreciation (ebitda) fell to 13.2 percent, from 14.5 percent last year and 15 percent in 2016. Azzurri said the measures to "mitigate the industrial cost pressure" – which meant higher labor costs, business interest rates and food price inflation – had pressure margins, but the Group continued to outperform the market. "
Adjusted, ebitda for the period was flat compared to last year, at 37 million pounds. The group did not provide statutory figures.
This year, there have been a series of failures and restructuring in everyday food chains, including Byron Hamburgers and Jamie's Italian, after many expanded to quickly and struggled with debt and a saturated market. Rising import and labor costs, as a result of the increase in national wages, have also increased the cost pressure.
Earlier this month, the Italian themes and private equity-backed chain Prezzo said trade was challenging, even after closing more than 100 restaurants. "It's no longer about expanding. It's about being better at what we do and building similar growth," says Executive Chairman Karen Jones, who did not provide precise trade data.
Despite this recovery from competitors, Azzurri opened 15 seats during the year – eight Zizzi restaurants, three Asks and four Coco di Mamas – with their totals to 290 and refurbished 33 seats. The group said that there had been planned further openings for Radio Alice, which "appeared as a key player".
In line with changing trends, the Group reported that revenues from home delivery had risen steadily and continued to be a "big opportunity", while its vegan supply had risen to 8 percent of total sales.
Azzurri helps to alleviate Brexit's risks and cost effects, thus adding ingredients locally in the UK, including mozzarella. Although the company said it was a long-standing policy that existed before Britain voted to leave the block.
"Azzurri has entered the new fiscal year at a good pace. Despite the challenging background of the UK market, we are convinced that there are further opportunities for our brands to continue to grow," said Steve Holmes, CEO.