City Centre Restaurants up 26% despite discounts

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The Independent Online
CITY Centre Restaurants improved profits by 26 per cent in the first half of 1992, despite erratic movements in monthly trading patterns and competitive price discounting.

The owner of the 157-strong Garfunkels and Deep Pan Pizza chains made pounds 4.3m before tax, up from pounds 3.2m in the comparative period. Shares in City, which has 68 of its outlets in London, firmed 1p to 62p on the results.

Bruce Johnston, chairman, said: 'While it is abundantly clear that the recessionary conditions continue, the effect on business from month to month is impossible to predict and, despite trading in May and June being below expectations, trading volumes in July improved again.'

The fall-off in trade in May and June was partly attributed to the fizzling out of post-election euphoria, and an absence of tourists.

Volume sales increased over the half-year, but the average spend per head fell by 2 per cent to pounds 5.40 in pizza outlets and by 1 per cent to pounds 6.60 in Garfunkels.

The falls in spending largely reflected price discounting. However, Mr Johnston said that the company's special offers were likely to become a permanent feature, recession or not. 'The public like them, and we are able to do offers without loss of profit margin if we can get the volume.'

Actual sales in the six months amounted to pounds 42.1m, up from pounds 37.9m. With a one-point improvement in margins to 9.6 per cent, operating profits rose from pounds 3.2m to pounds 4m.

The pre-tax line was bolstered further by City's ability to generate surplus cash - pounds 2m in the half-year, which took the company's positive bank balance to pounds 6m. Interest receivable soared from pounds 33,000 to pounds 257,000.

City, though, is sticking to its policy of holding the interim dividend, at 0.45p, until the full-year results before considering a rise.

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