LONDON (ShareCast) - (ShareCast News) - Restaurant operator Tasty has issued another profit warning and promised to sell off and close certain assets after trading across its London-centric estate of Dim T and Wildwood outlets has been even lower than management's low expectations.
The AIM-listed company said it expects to report profit before tax down 84% to £0.2m on revenue of £24.4m for the 26 weeks to 2 July.

In March, management had cautioned about the "challenging" environment in the restaurant sector and has since undertaken a full review of its estate, operational structure and cost base.

"However the expected improvements from these initiatives are now unlikely to be significant in the current year," Tasty said in a statement on Wednesday.

Directors, who expect the first- and second-half half weighting of its financial performance to be similar to historic periods, assured that the company "remains profitable and has a strong balance sheet".

But they plan to sell certain fixed assets during the second half of the financial year "to strengthen the cash resources available to the group" and close certain loss making sites, "which may lead to impairments but improved operational cash flow".

Management stated their belief that the core Wildwood brand "remains attractive to customers", but plan to make some refinements in the second half, and that the property estate contained "desirable locations which will deliver significant financial performance".

Tasty shares fell more than 16% in early trade to below 38p before rallying to 43.37p after two hours of trading on Wednesday, where they are down more than 70% in the year to date.

Analysts at broker N+1Singer said investors had read across from this profit warning.

"There isn't much more detail in the statement but this is clearly not helpful for another leisure stocks such as Restaurant Group. The recent trading statements from the pub companies saw them benefit from the good weather with wet led sales i.e. drink driving performance.

"Now the weather has turned we may see a more true picture of demand."

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