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(Alliance News) - Various Eateries PLC on Tuesday said it expects annual sales to be "slightly ahead" of market expectations but expects profit to be lower as it has avoided passing on increased costs to consumers.
In a trading update for the year ending October 2, the London-based chain of restaurants, clubhouses and hotels such as Coppa Club said it expects sales to be ahead of market expectations at over GBP40 million.
The company said that sales at the Coppa estate in the last six months were ahead of the same period in 2019, a pre-Covid comparative.
The company said it has had "considerable success" in mitigating the pressures facing the industry, but has not been "totally immune" to inflationary pressures. So far, the company has "resisted" passing on price increases to customers.
While this has resulted in reduced profit over the period compared to market expectations, the company said that, if the inflationary environment persisted, it was confident in its ability to restore margins through "a combination of menu engineering and modest price rises". It can do this without affecting the "overall customer value proposition", Various Eateries believes.
The company says it opened four new venues - Coppa Clubs in Putney, Haslemere and Bath and a Noci in Islington - and has signed terms to open Coppa Clubs in Cardiff and Guildford in the first half of next year. It will exercise caution in its expansion plans, only proceeding with sites that meet "very strict criteria" for long-term, sustainable success.
Chief Executive Officer Yishay Malkov said: "The board and I are pleased with the sales outperformance in the year, particularly in the context of the well-documented challenges the industry has faced. An uncertain reporting period impacted by first by Covid and later increasingly material cost pressures, we navigated it successfully with all our sites remaining competitive and with costs under control. At the same time, we continued to deliver against our expansion strategy at a sensible pace."
Shares in Various Eateries were untraded on Tuesday morning but closed at 38.00 pence on Monday.
By Chris Dorrell; chrisdorrell@alliancenews.com
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