Pizza Express’ hefty losses reach £56m as appetite for casual dining wanes Jinlong Wang, the chairman and chief executive of Pizza Express, said that rising labour and property costs in the UK had hit revenues

Pizza Express became the latest casualty in the casual dining sector to report hefty losses.

The Italian restaurant chain said its £55.8m loss for 2018 was 40 per cent bigger than the £31.6m loss it suffered the year before. The full-year figure emerged depsite the company reporting a rise in sales and turnover at the end of April.

Net debt stood at £607.7m at the end of 2018, or at £1.12bn if a loan from its parent company, the private equity investor Hony Capital, was included.

The i newsletter latest news and analysis Email address is invalid Email address is invalid Thank you for subscribing! Sorry, there was a problem with your subscription.

In April, Pizza Express told the City that group earnings had fallen by 15.3 per cent to £80.2m but revenues were up 1.6 per cent to £543m.

High street uncertainty

Though the firm did publish its full-year accounts, which included further detail of its losses and debts, in its annual report in April, they were only published at Companies House yesterday.

Jinlong Wang, the chairman and chief executive of Pizza Express, said that rising labour and property costs in the UK, as well as increased competition in China, had eaten into the firm’s revenues.

He also said that last year’s “extreme weather” had deterred diners from visiting high-street restaurants.

‘Worrying trends’

Russ Mould, an investment director at AJ Bell, said that although a the fall in pre-tax profits was to be expected in the current market, a near-doubling of Pizza Express’s pre-tax losses was more worrying.

He said: “One big difference between the two is interest costs, which were more than £90m last year, as a result of Pizza Express’s enormous debt pile. Those liabilities will be a severe burden given current trading.”

He said there was a “regrettable trend” of firms using non-statutory measures of profit in order to mask their performance.

Restaurant closures

More From PizzaExpress is opening a new takeaway cafe, where you can buy pizza by the slice

Pizza Express has long been touted as the next casual dining firm to be forced into closing some of its branches. Last year, the likes of Carluccio’s, Gourmet Burger Kitchen, Byron, Strada and Prezzo all closed branches.

In April, the Pizza Express managing director, Zoe Bowley, said that it had no plans to close pizzerias – but did say that the company was looking at other ways to cut its costs.

She said: “In 54 years [since the company was launched], we have weathered many storms, through the depths of recessions. I think what it forces you to do is appraise your business model and understand how you can take appropriate costs out.”

She did not rule out rent reductions on a case by case basis.