- However, the group was boosted by a £2.5million insurance payout
The owner of Wildwood restaurants said sales were ‘disappointing’ in the lead-up to Christmas, after it underwent a restructure in the hope of reviving its fortunes.
Hospitality group Tasty, which also owns the dim sum chain Dim T, said it continued to uphold a ‘cautious outlook’ while the casual dining sector endures ‘several adverse factors.’
These include food cost inflation and declining consumer confidence and discretionary spending, as well as national insurance and living wage changes unveiled in the Government’s October Budget.
Tasty shut 14 sites and made about 160 people redundant during the first six months of 2024 as part of a restructuring aimed at reviving its profitability.
Consequently, its turnover fell by 12 per cent to £19.1million, although it recovered to a £13.4million pre-tax profit after making a £6.2million loss in the same period last year.
Under the restructuring plan, Tasty hopes to make savings in its head office of around £600,000 per year and improve its underlying earnings before nasties by £2.1million up to 2025.
Festive trade: Wildwood restaurant chain owner Tasty reported its sales were ‘disappointing’ in the weeks preceding Christmas
In addition, the group expects to make £33.4million in revenue, generate £1.3million in cash, and rebound to a £1.2million profit this financial year.
Tasty also said it had gained a settlement from its insurer worth £2.5million, or about £1.5million after creditor and legal costs.
The settlement related to a claim for losses deriving from a breach of an insurance contract in 2020 when hospitality operators suffered severe restrictions on trading due to the Covid-19 pandemic.
Many insurers refused to pay out for business interruption losses deriving from the pandemic until a High Court judgment in 2023 ruled in favour of some companies, including Pizza Express, over the matter.
Budget measures hit hospitality
In the Budget, Chancellor Rachel Reeves announced that employers National Insurance rates would increase from the current 13.8 per cent levy on wages above £9,100 to 15 per cent on salaries exceeding £5,000 from April.
The National Living Wage will also rise by 77p to £12.21 per hour, while business rates relief for the hospitality industry will be reduced from 75 per cent to 40 per cent up to £110,000.
Some major hospitality firms like Whitbread and JD Wetherspoon have warned these measures will increase their annual costs by tens of millions of pounds.
Other businesses have said they will have to hike prices, axe jobs, reduce investment or close venues.
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