The owner of Wildwood and Dim T, which number 65 restaurants in the UK, has warned it will axe loss-making sites and dispose of certain fixed assets to raise cash after trading during the first half of the year fell short of expectations.
Sales for the six months to July 2 at Tasty Plc reached £24.4m, which was an improvement on the £21.8m it made at the same stage last year, but after-tax profits shrank from £1.3m to £200,000.
Directors at the group communicated back in January that they expected the trading environment to be “challenging” this year and said this had proved to be the case, with the first half performance across the estate below their revised expectations.
“The group has undertaken a full review of its estate, operational structure and cost base, however the expected improvements from these initiatives are now unlikely to be significant in the current year,” the directors said.
The company noted that it remains profitable and has a strong balance sheet, but expects to dispose of certain fixed assets during the second half of the financial year to strengthen the cash resources available to it.
The business also expects to close certain loss-making sites which may lead to impairments but improved operational cash flow.
“The directors believe the group’s core ‘Wildwood’ brand remains attractive to customers and that the group has a property estate with desirable locations which will deliver significant financial performance. The directors continue to refine and improve the ‘Wildwood’ brand offering in a difficult trading environment.”