Rising bills, cost-of-living crisis hit Tasty's bottom line

27th Sep 2023 10:42

(Sharecast News) - Casual dining operator Tasty reported minor first-half revenue growth on Wednesday, with a 0.9% increase year-on-year to £21.7m.

However, the AIM-traded company's adjusted EBITDA declined in the 26 weeks ended 25 June, to £1.1m from £2.7m a year earlier.

Tasty's impairment charge was a significant concern, which considerably increased from £1.6m to £4m.

Consequently, the company reported a loss of £6.2m after tax, nearly doubling the loss of £2.7m from the first six months of 2022.

Tasty's liquidity position also saw a downward shift, with a reported cash balance of £2.8m, a significant decrease from £8m year-on-year.

Despite those challenges, the firm demonstrated resilience in its operations, with 52 of its 54 restaurants remaining open throughout the period.

In a positive light, the company reported a 1.4% increase in like-for-like sales compared to 2022.

Additionally, despite facing operational challenges, Tasty said it had seen an improvement in staff retention.

However, the broader economic landscape remained challenging, with Tasty expecting the ongoing cost of living crisis and interest rate hikes to impact revenue negatively in the second half.

Moreover, the company said it was continuing to grapple with inflationary pressures on various fronts, including labour, food, and utilities, adversely affecting its profitability.

"In these uncertain times, we continue to remain cautious in our approach," said chairman Keith Lassman.

"Retention of staff and cost control is a key priority, and the board remains cautiously confident of managing current challenges."

At 1034 BST, shares in Tasty were down 24.68% at 1.77p.

Reporting by Josh White for Sharecast.com.