Restaurant owner Tasty Plc (LON:TAST) was looking anything but on Wednesday after it swung to a loss in 2018 and warned that things are unlikely to get any better this year either.
UK restaurants have been closing at a rate of knots over the past year or so as intense competition within the sector has taken its toll.
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Put simply: There aren’t enough customers to fill every restaurant, especially at a time when consumer confidence is deteriorating. Higher costs have also squeezed margins further.
Tasty, which owns the dim t and Wildwood chains, saw revenues fall 6% in 2018 to £47.3mln (2017: £50.3mln), reflecting site closures and a decline in like-for-like sales.
As a result of the sharp rise in costs, the group swung to an operating loss of £0.4mln (2017: profit of £1.2mln). Underlying earnings (EBITDA) more than halved to £1.6mln (2017: £3.5).
No improvement expected in 2019
Bosses said market conditions became “increasingly challenging” during 2018, and they expect there will be “no significant improvement” in the year ahead.
Chairman Keith Lassman blamed Brexit uncertainty as he noted that trading has “started slowly” in 2019.
He also said last year’s poor performance was down to the cold weather, then the hot weather and then the World Cup.
Shares plunged 21.5% to 6.7p in early deals on Wednesday. The stock has now almost halved since this time last year.