Profit sliced

THE COMPANY that operates the Milano chain of restaurants in Ireland last year sustained a 14 per cent drop in pre-tax profits to €2.85 million in spite of an increase in revenues.

According to accounts just filed by Agenbite Ltd to the Companies Office, revenues increased by 1.6 per cent from €17 million to €17.2 million in the year to the end of June 26th last.

The accounts show that the company’s accumulated profits last June stood at €20.1 million.

A subsidiary of the UK-based Pizza Express, Milano opened its first outlet in Ireland on Dublin’s Dawson Street in 1995. Along with several restaurants in Dublin, the company also operates outlets in Cork, Galway, Limerick and Ennis.

As a result of the opening of a new outlet last year, the numbers employed increased from 328 to 344.

According to the directors’ report, “during the period, the company opened one new restaurant and did not close any restaurants. The casual dining market is highly competitive and the company will seek new opportunities to open new restaurants, whilst continuing to operate effectively and efficiently”.

The directors state that the key risks to the company are considered to be competition from other restaurateurs; employee retention; timely supplies of quality products; and the impact of the economic climate.

The returns show that the employment of 16 additional staff contributed to staff costs increasing from €6.67 million to €7.11 million last year. The company’s cost of sales increased from €13.7 million to €14.3 million, resulting in the company’s gross profit declining from €3.2 million to €2.9 million.

Administrative expenses of €73,000 resulted in the company’s operating profit declining by 14 per cent from €3.3 million to €2.8 million. After paying tax of €394,000, the company’s profits were €2.46 million, while cash reduced from €3.5 million to €837,000.

The amount spent by the firm in operating leases last year increased from €1.9 million to €2 million while non-cash depreciation costs totalled €769,000. The company did not pay a dividend last year. Pizza Express established its first restaurant in London and operates over 400 restaurants in the UK, with ventures in continental Europe and the Far East.