Richoux Group disposes of five sites after reporting £6.7m net loss
The restaurant group, which appointed Jonathan Kaye as chief executive in October 2016, has 18 restaurants operating under the Richoux, Dean’s Diner, Villagio, Friendly Phil’s and Zintino brands.
In the past year it has closed five Deans Diners, while the remaining three – in Chatham, Braintree and Fareham – will be converted to the Friendly Phil’s brand as part of a strategy to focus on its Friendly Phil’s and Richoux formats.
It has also converted its Chislehurst and Port Solent Villagio restaurants to the Richoux brand.
Chairman Simon Morgan said the costs it has incurred will mean that the group will have to approach shareholders for more funds.
As a result of the group’s reorganisation, it has reported adjusted EBITDA of £0.2m having made sales of £13.3m in the 52-week period ending 25 December 2016.
The net loss for the period, having taken into account pre-opening costs, impairment, reorganisation costs and “onerous lease provision” was £6.7m.
Morgan said: “Like many restaurant groups in the casual-dining sector, trading in the first quarter of this year has been difficult. In addition, during this period trading in some of our restaurants was interrupted while we converted or refurbished them.
“The impact of temporary closures will continue during the second quarter. Whilst our new Richoux and Friendly Phil’s restaurants have only been trading for a brief period, the early signs from them are encouraging.
“The cost of converting or refurbishing restaurants and of closing underperforming restaurants, the reduction of income due to temporary closures and the current trading climate, have led the board to conclude that it will need to approach shareholders for further funds in due course.”