Tasty Plc (LON:TAST) shares soured after the restaurant owner said it expects profit and revenue to fall in the first half, blaming a “challenging trading environment”.
The owner of the Wildwood and DT restaurants expects revenue of £24.3mln in the 26 weeks to 2 July, compared to £21.7mln the same period a year earlier.
Adjusted profit after tax is anticipated to slump to £200,000 from £1.2mln last year.
Tasty, which in March warned of difficulties facing the restaurant sector, said trading across its estate has been below its expectations and it is likely to sell off and close certain assets in the second half to strengthen its cash resources.
“The company also expects to close certain loss making sites which may lead to impairments but improved operational cash flow,” it added.
The group has undertaken a full review of its estate, operational structure and cost base but said the expected improvements from these initiatives are “now unlikely to be significant in the current year”.
Tasty, which expects to release its interim results on 12 September, stressed that the company remains profitable and has a strong balance sheet.
Shares dropped 6.25% to 45p in afternoon trading.