The owner of the restaurant chains Zizzi and Ask Italian, Azzurri Group, reported a jump in sales in its full-year results, however, earnings dipped as the firm saw its margins pressured by rising costs.
The group reported that sales in the year to 1 July had risen 8.5% to £279.8mln, boosted by the opening of 15 restaurant openings and like-for-like growth across its brands.
‘Wall of costs’ squeezes margins
However, underlying earnings dipped 0.8% to £37mln as margins shrank to 13.2% from 14.5%.
Steve Holmes, Azzurri’s chief executive, said that he was pleased with the performance of the group despite a “wall of costs” that have been facing the industry.
Despite the slightly gloomy outlook, Holmes added that the “market fundamentals” were holding up well for restaurants, adding that the group would continue to invest in its locations, having completed 33 refurbishments during the year.
The firm’s sales are also getting a boost from its vegan offering which it launched 18 months ago and now accounts for 8% of all main courses served.
Increases in the minimum wage and rising business rates have been blamed by several restaurants and high street chains for reductions in profitably as their margins are slowly eaten away.
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