Shares digital

The owner of up-market eateries Restaurant Bar & Grill and Piccolino has bucked a growing trend for leisure operators to report declining trade. Individual Restaurant Company (IRC:AIM) says strong sales growth seen last year has carried forward into 2008.

‘People are willing to trade up if there is good service,’ claims chief executive Steven Walker. Customers spend between £30 and £33 per head, on average, at Restaurant Bar & Grills. Walker said he had not seen this spending level fall in recent months, but admitted that the business would take a cautious approach to the year.

The company is about to renegotiate a food supply contract. If it cannot pass on extra costs from higher price inflation, it is forecasting a £300,000 drop in 2008 profit. Expansion plans remain intact, opening six or seven new sites a year. Walker said a weaker property market had reduced premiums paid to acquire leases, but hadn’t lowered rental rates.

In 2007, Individual Restaurant Company generated £2.6 million pre-tax profit against £3.5 million loss a year earlier.

Shares says: A positive start to the year, but mixed trading among rivals suggests harder times could be ahead.

by: Dan Coatsworth