Tasty, the operator of Wildwood and dim t, is on a “surer financial footing” after agreeing a restructuring plan.
Following the plan, the group has 37 sites trading – including seven renegotiated rent agreements) – with the tail of the estate cut significantly and 19 loss-making sites or onerous leases exited.
Chairman Keith Lassman said: “The board believes that the restructuring plan will allow the group to stabilise towards the end of the year, with a significant improvement in EBITDA performance expected over the next two years through site rationalisation and other tangible cost savings.
“We are hopeful that the restructuring plan will allow the group to meet new opportunities in the sector in 2025 beyond its existing operations, including exploring new concepts, attracting new audiences and considering potential partnerships.”
It comes as Tasty publishes annual results for the 53 week period ended 31 December 2023.
Revenue grew by 6.5% to £46.9m (2022: £44.0m) while adjusted EBITDA (post IFRS 16) was up by £1.8m to £4.4m.
The cost-of-living crisis and interest rate rises continued to significantly impact FY23 revenue and inflationary pressure on labour, food and utilities continue to adversely affect profitability, Tasty said.
Footfall was also affected by the work from home culture post Covid, transportation strikes and bad weather occurring during important trading periods of the year.
However, the outlook post restructuring is positive. With underlying labour issues easing, inflation tailing off and the expected positive impact of the restructuring plan, the group expects to see an uplift in profitability towards the end of the year.
The rationalisation of loss-making restaurants and a reduced central overhead will enable significant EBITDA and efficiency improvements between 2024 to 2025 to counter the disruption caused by the restructuring in the first half of 2024.
After all of the non-trade adjustments, the group reported a loss after tax for the period of £14.5m (2022: £6.4m loss after tax).
As at 31 December 2023, Tasty had no outstanding bank loan (2022: nil) after repaying the Barclays Bank facility in full in June 2022.
Cash at bank at the end of the period was £4.2m (2022: £7.0m). Capital investment decreased to £0.3m (2022: £1.6m).
