Tasty shares tank as losses widen, but board confident in turnaround plan
By Benjamin Chiou
Date: Friday 28 Jun 2024
(Sharecast News) - Restaurant operator Tasty saw shares drop sharply on Friday after the Dim T and Wildwood owner reported a doubling of losses in 2023, but expressed its confidence in its turnaround after closing underperforming sites.
Tasty, which operated from 53 restaurants during 2023, undertook a restructuring in recent months to reshape the group's estate, make redundancies and "correct the trading decline".
It has since decided to close a number of venues - one Dim T site, 10 Wildwoods, along with two non-trading and three sub-let sites - and renegotiated rent agreements on a number of others, along with securing a £750,000 loan.
"The board believes that the restructuring plan will allow the group to stabilise towards the end of the year, with a significant improvement in EBITDA performance expected over the next two years through site rationalisation and other tangible cost savings," said chair Keith Lassman.
Revenues in 2023 totalled £46.9m, up 6.5% on 2022, with like-for-like sales up 4.1%. However, the company said growth was limited by declining footfall which it blamed on work-from-home culture post-Covid, transportation strikes and bad weather coinciding with important trading periods, as well as the general cost-of-living pressures.
Meanwhile, continuing increased utility, food and labour costs held back the bottom line, with a loss after tax of £14.5m for the year, down from a £6.4m loss in 2022.
"We are hopeful that the restructuring plan will allow the group to meet new opportunities in the sector in 2025 beyond its existing operations, including exploring new concepts, attracting new audiences and considering potential partnerships," Lassman said.
The stock was down 24% at 1.07p by 0857 BST.
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