Slow end holds back City Centre: Garfunkels and Deep Pan restaurant group shows six-month profit rise

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The Independent Online
A POOR end to the interim period held back profits at City Centre Restaurants - the company that owns Garfunkels, the Deep Pan Pizza Company and Chiquitos.

Profit before tax for the six months to 30 June was pounds 4.8m, up from pounds 4.3m. Bruce Johnston, chairman, said the advance would have been stronger but for a fall-off in trade in May and June.

Mr Johnston said the quiet end of the period mirrored the performance in 1992, when consumer confidence dried up after the general election.

Operating profits were pounds 4.4m, up from pounds 4.1m, and turnover was pounds 45.3m against pounds 42.1m. The operating profit margin remained unchanged at just under 10 per cent.

Mr Johnston said: 'Although turnover in each of the months within the period was in excess of that for the equivalent month in 1992, trading during May and June was, as last year, disappointing compared to pre-recession historical patterns.'

He added that the group was unlikely to see activity as frenzied as in 1988 again, but was encouraged by an uplift in business in the first six weeks of the second half.

CCR owns 160 outlets including 36 Garfunkels and 96 that trade as the Deep Pan Pizza Company. Despite a heavy bias toward the South-east of England, CCR was protected from the worst ravages of recession because it had not borrowed money.

Expansion was funded from cash flow. CCR had net cash of pounds 12m at the end of the half. It did not open any new restaurants in the period under review but spent pounds 3m refurbishing outlets already in the portfolio. Plans have been laid to open six restaurants in the second half, taking total capital expenditure for 1993 to pounds 7m.

Earnings per share increased to 1.68p from 1.57p. The interim dividend, however, was held at 0.45p, reflecting a cautious outlook. CCR has traditionally paid 40 per cent of the total dividend at the interim and the rest at the end of the year. Mr Johnston said this practice would continue, but that the second-half dividend would take account of second- half profitability.

CCR said yesterday that its 61-year- old chief executive, Phillip Kaye, is stepping down. He will stay on the board with executive responsibilities for development of the business. His chief executive duties will be taken on by James Naylor, formerly joint managing director of First Leisure. The shares closed up 1p at 86p.