Expansion on the cards for Zizzi owner as sales rise to £280m
Azzuri Group chief executive Steve Holmes says ‘a very challenging year from a cost perspective’ led to flat profits.
The owner of Italian restaurants Zizzi and ASK has revealed a year of strong sales growth as it eyes expansion plans but said its profits were flat after absorbing higher costs.
Azzurri Group’s sales jumped 8.5% in the year to July, reaching £279.8 million, with like-for-like growth across all brands.
Underlying earnings were flat at £37 million as margins fell from 14.5% to 13.2%.
Speaking to the Press Association, chief executive Steve Holmes said it had been “a very challenging year from a cost perspective”.
“Today the consumer is looking for great value,” he said.
“So we’ve been very cautious about putting prices up and worked hard to offset a lot of those costs.”
The group – which also owns the Coco di Mama and Radio Alice brands – now has 290 branches with plans to open more in the coming year despite a difficult backdrop with several restaurant groups shutting sites this year.
Millennials are eating out a bit more, especially at places that provide experiences Chief executive Steve Holmes
Zizzi could now expand abroad following a successful debut in Ireland, where a third site will open by the end of 2018.
Meanwhile, coffee and pasta chain Coco di Mama is set to open more sites in London.
The Salisbury branch of Zizzi finally reopened last week, eight months after it was caught up in the poisoning of former Russian intelligence agent Sergei Skripal and his daughter Yulia.
Mr Holmes said the restaurant had been “very busy” since reopening.
Restaurant chains have had a rough year facing food inflation, rising rents and rates, and tough competition.
Other Italian chains such as Jamie’s Italian and Prezzo have closed underperforming stores in a bid to improve trading.
Commenting on the current market, Mr Holmes said: “My view is that the market fundamentals are quite strong, millennials are eating out a bit more, especially at places that provide experiences.
“There are winners and losers. The winners are the ones that are providing interesting, relevant and different propositions.”