Tasty Plc (LON:TAST) has warned investors that conditions in the restaurant industry “continue to be challenging” as it reported another six months of widening losses.
The AIM-quoted firm, which owns the Wildwood and dim t restaurant chains, has issued a couple of profit warnings over the past year.
READ: Tasty warns on industry outlook (again)
Restaurants, like high street retailers, have been struggling to get cash-strapped customers through the door, while years of overexpansion has left those who are still spending with a wealth of options.
In response to the challenges, Tasty closed a handful of underperforming stores earlier this year and introduced a raft of changes, measures which are beginning to yield “early signs of improvement”.
Tough market conditions are persisting though and have been “exacerbated by the unfavourable weather conditions and the World Cup”.
Tasty said it has no plans to open any stores, rather it is keeping an eye out for other restaurants in its portfolio which could be closed and sold off.
Should the board decide to get rid of some they are unlikely to get as much as they thought they could this time a few months ago.
Hefty write-down
The company has written down the value of its properties by £11.2mln which it has recognised as a one-off impairment charge.
Taking that into account, the group posted a loss of £10.7mln in the six months to July 1 (H1 17: loss of £9.3mln). Sales fell 6% to £23.0mln (H1 17: £24.4mln).
“Market conditions remain difficult, but we are starting to see the benefits of the infrastructure changes that have been and continue to be, implemented,” said chairman Keith Lassman.
“The directors believe that our restaurants are appealing to customers and, once the economic climate has improved, the group is well placed to resume growth.”
Shares fell 5.9% to 16p early on Friday.