The Irish arm of 'fast casual' restaurant chain, Nando’s, is on the lookout for new sites for restaurants after reporting sales in excess of pre-pandemic levels earlier this year.
However, the directors expect that higher costs of doing business driven by inflation, will be “a significant drag on our performance in the current financial year”.
The directors make their forecast in new accounts which show that Nando’s Chickenland Ireland Ltd returned to profit to record pre-tax profits of €2.54 million in the 12 months to the end of February 27th this year.
The pre-tax profits of €2.54 million follow pre-tax losses of €2.44 million in the prior year.
The return to profit followed revenues increasing by 92.4 per cent from €8.95 million to €17.2 million.
The ‘fast casual’ restaurant business recorded the profits after benefiting from Government grants of €5.44 million during the Covid-19 pandemic hit year and this followed grants received of €4.2 million during the first year of the pandemic.
The directors state that in the first quarter of the financial year ending February 2023 “many restaurants across the company have seen sales in excess of pre-pandemic levels”.
The directors state that they have been very encouraged by customer demand for the brand’s ‘Peri-Peri’ chicken.
The directors add that nevertheless, “we are seeing significantly higher levels of cost inflation, including higher energy prices” along with wage cost inflation and increase in cost of goods.
In response to increased costs, the directors state “we have clear strategies in place to address these costs, but we expect these factors to serve as a significant drag on our performance in the current year”.
According to the directors, the firm “is currently looking for potential sites to open up new restaurants in the Republic of Ireland”.
They further state that the company’s strategy through the period is to continue to grow in terms of restaurant numbers, profitability, and market share.
They state that to drive profitability and market share, the company will continue to focus on existing locations and develop opportunities for like-for-like growth.
The company recorded operating profits of €3.65 million and combined interest payments and foreign exchange losses of €1.1 million reduced profits.
Staff costs last year totalled €8.54 million which was an increase on the staff costs of €7.5 million in the prior year.
Pay to directors last year totalled €182,860.
Accumulated profits last year totalled €19.26 million while the firm’s cash funds increased from €5.8 million to €11.38 million.