IRC Individual Rest

 

TIDMIRC 
 
RNS Number : 9719M 
Individual Restaurant Company PLC 
09 February 2009 
 

Individual Restaurant Company plc 
("IRC" or "the Group") 
 
 
Pre Close Trading Update 
 
 
Individual Restaurant Company plc, a leading operator of 34 premium casual 
dining restaurants throughout the UK trading under the Piccolino (23) and Bar & 
Grill (11) brands, today announces its pre-close trading update for the 
year-ended 31 December 2008. 
 
 
Trading Update 
 
 
Sales in December 2008, compared to the same period last year, were up 11%, 
driven by the six new restaurant openings completed during the year. The new 
restaurants comprised five Piccolino's: Birmingham (June); York (July); Hale 
(September); Bristol (September); and Clitheroe (December), and one Bar & Grill 
in Harrogate (November). 
 
 
IRC has always maintained long term financial success is delivered by focusing 
on the quality of our people, food, customer service and cleanliness of the 
restaurants. The Group continue with its strategy meaning it has not been drawn 
into discount based promotions. As a result there was no erosion to December's 
gross profit margin against the same period last year. 
 
 
At the time of the last market update on 29 September 2008, the Group reported 
that trading conditions over the first half of 2008 were challenging and that 
conditions had toughened in the first 10 weeks of H2. As the second half of the 
year progressed, conditions became gradually more difficult. Encouragingly, 
trading strengthened over the Christmas period, the critical trading period for 
our business.  Accordingly it is anticipated that results for the full year will 
be in line with current market consensus at a trading level (EBITDA), but, as a 
result of marginally higher depreciation and interest charges, towards the lower 
end of the current market range at a profit before tax level. 
 
 
Banking Facilities 
 
 
The Group is financed by an GBP18.5m loan facility of which GBP2.7m was unused 
at year-end. There are no capital repayments to be made on this loan in the 
current year. The Group is not planning on increasing its senior banking 
facilities in the year given the outlook for the current banking environment. 
 
 
Brand Progress and Future Roll Out 
 
 
In all aspects of the business, the Group continually strives to make progress 
through innovation and the Board believes that significant progress has been 
made in both brands in 2008. 
 
 
Firstly, and most significantly, the Group has now experienced a lengthy period 
of successful trading of both brands in the south of England (6 Piccolino's and 
3 Bar & Grills). 
 
 
Secondly, the Board believes the Piccolino brand has always set itself apart 
from the competition through quality of design, food and service. In 2008 the 
Group continued to move the brand forward. Piccolino trialled making fresh pasta 
at Hale, Bristol and Clitheroe and in 2009 it is intended that this is extended 
to a number of the other existing Piccolino restaurants. In addition, the Group 
excluded pizza from the menu in the new openings at Hale and Clitheroe. These 
actions have been very successful and significantly increased spend per head. 
 
 
Looking ahead, leases have been signed on four sites, Aberdeen, Knutsford, the 
City of London and Dorking. The Aberdeen site, which had been planned to open at 
the end of 2008, experienced delays in planning and licensing. Openings in 2009, 
including Aberdeen, will be funded out of cash flow and the existing bank 
facility. The quantum and timing of openings will be determined by trading 
performance and available headroom in our banking facilities. 
 
 
Future Outlook 
 
 
The Group anticipates that trading conditions will be more challenging in 2009 
than 2008 with this being felt most acutely in the first half of the year.  The 
Group also believe gross margins will come under pressure as suppliers try to 
offset their rising costs resulting from the weakness in sterling. In January, a 
number of cost saving measures were introduced to offset these more challenging 
times. Furthermore, the Group will benefit from the full year revenue and EBITDA 
generation from the six sites opened in 2008, the majority of which were opened 
at the back end of 2008. 
 
 
The Board believes the brands, roll-out potential and business model are robust 
and remains confident about the medium term prospects for the Group. 
 
 
Preliminary Results 
 
 
The Group's preliminary results will be announced on 30 March 2009. 
 
 
Stephen Walker, Chief Executive of IRC, commented: 
 
 
"I am pleased to report positive trading over the Christmas period. We have 
taken a number of strong measures to ensure that we continue to be able to 
expand and are operating more efficiently in the current market environment. 
 
 
"Whilst we remain cautious in our outlook for the year ahead in line with other 
operators, both of our brands have gained stature over the year.  We remain 
confident that the broad appeal of both brands will continue to underpin a 
resilient performance from the Group over the medium term." 
 
 
9 February 2009 
 
 
 
 
+------------------------------------+------------------------------------+ 
| Enquiries:                         |                                    | 
|                                    |                                    | 
+------------------------------------+------------------------------------+ 
| Individual Restaurant Company plc  |                      0161 839 5511 | 
+------------------------------------+------------------------------------+ 
| Steven Walker, Chief Executive     |                                    | 
+------------------------------------+------------------------------------+ 
| Vernon Lord, Finance Director      |                                    | 
+------------------------------------+------------------------------------+ 
|                                    |                                    | 
+------------------------------------+------------------------------------+ 
| Altium                             |                      0161 831 9133 | 
+------------------------------------+------------------------------------+ 
| Mike Fletcher                      |                                    | 
+------------------------------------+------------------------------------+ 
|                                    |                                    | 
+------------------------------------+------------------------------------+ 
| College Hill                       |                      020 7457 2020 | 
+------------------------------------+------------------------------------+ 
| Justine Warren                     |                                    | 
+------------------------------------+------------------------------------+ 
 
 
 
 
 
 
 
This information is provided by RNS 
            The company news service from the London Stock Exchange 
   END 
 
 TSTILFFDFTIRIIA 
 

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