Lebanese restaurant chain Comptoir has spooked investors by revealing the past two months have brought further “difficult trading”, including an unexpected fall in sales and profits at some of its more established sites.
The company currently operates 23 restaurants, 10 of which opened in the last eight months, and two franchise locations.
Ahead of its AGM today, directors at the firm said that overall, the past two months have seen a continuation of the difficult trading it reported at the time of its prelims in April 2017.
“While the business saw improved sales figures over the Easter weekend and half term holidays, unfortunately much of this benefit was subsequently lost in the final two weeks of the month,” they said.
“In May 2017 the company also experienced an unexpected decline in like-for-like sales and profit at certain mature restaurants, particularly in retail-led locations and at its higher-spend restaurants, Levant and Kenza.”
In addition, although the group as a whole is seeing a progression in sales, a number of the restaurants opened in 2016 remain behind expectations in terms of their anticipated maturity trading curve.
Like many of its peers in the sector, Comptoir is experiencing upward pressure on costs, including incremental wage costs and related taxes (apprenticeship levy), higher food and drink costs (driven by depreciation in sterling versus the Euro) and increases in rent and business rates.
“Together with the softening in consumer spending, these factors have had a significant impact on restaurant profitability and visibility over short-term trading trends,” the directors said. “The company has taken steps to limit the increase in central overheads.”
They reiterated their belief that the Comptoir brand continues to have a strong appeal to consumers and landlords and said there remains considerable potential for expansion in the UK.
It still expects to open three more restaurants before the end of 2017 – Comptoir Reading, Comptoir Oxford and Shawa Oxford – together with a first international franchise operation in the Netherlands with HMS Host.
The directors also confirmed that they expect to raise £2.7m (gross) from the sale and leaseback of the freehold of Comptoir’s central processing unit (CPU) in North London.
The net proceeds will be used to fund the remaining new openings for 2017 and strengthen the Group’s working capital position. A further announcement on the sale and leaseback will be made in due course.