The chairman, Bruce Johnston, said London and the South-east had been worst hit by recession and it was therefore encouraging to see the streets busy again. Some 40 per cent of the company's restaurants are within the M25 area.
However, Mr Johnston added that he hoped tax increases this month would not dampen or eliminate these early signs of improvement.
Profits before tax in the year to the end of December rose 14.8 per cent to pounds 12.6m on turnover up 6.2 per cent to pounds 95.2m. Total dividends rose 13.4 per cent to 1.78p per share.
Trading followed a similar pattern to 1992 with buoyant first and third quarters, but a disappointing run-up to Christmas. The week between Christmas and the year-end was excellent. Consumers remained very price and value-conscious, but gross margins (after food and wage costs) widened slightly, after a similar improvement in 1992.
The company will continue to focus on expanding the Deep Pan Pizza division and will speed up the opening rate of Chiquito Mexican restaurants due to the increasing popularity of ethnic catering.
This year it intends to open five Caffe Uno pasta restaurants to add to the two opened last year, and two more Garfunkel's airport units to add to the existing five airport restaurants. The company says the Garfunkel's brand is particularly suited to high volume, high customer mobility sites.
Capital expenditure last year totalled pounds 8.2m, including pounds 4m on new branches and pounds 2.7m on refurbishments.
Despite lower interest rates, interest received rose to pounds 672,000 from pounds 574,000 due to an increase in cash resources to pounds 14m at the year- end from pounds 11.4m.
The shares rose 3p to 82p.Reuse content