Hospitality group Tasty bounced back to profit last year as Britons returned en masse after indoor dining was allowed to restart in May.
The Wildwood restaurant chain owner declared a £1.2million profit for the 52 weeks to Boxing Day, compared to a £12.7million loss in the previous 12 months when coronavirus-related curbs forced its outlets to close for much of the time.
Significant pent-up demand and disposable income built up during the lockdown, as well as the growth in domestic holidays caused by international travel restrictions, helped the firm’s overall revenue jump 44 per cent to £34.9million.
Healthy results: Wildwood restaurant chain owner Tasty declared a £1.2million profit for the 52 weeks to Boxing Day, compared to a £12.7million loss in the previous 12 months
Sales surpassed management forecasts prior to December as relatively sluggish trade at its city centre establishments was offset by strong footfall at its sites in residential areas, where the majority of its estate is situated.
However, the emergence of the Omicron variant meant sales over the peak trading period came in below expected levels as the UK Government advised people to work from home.
The company said trade this year has begun well but warned that profitability would be affected by higher costs and reduced public financial support measures, many of which are set to arrive in the first half of next month.
These include the anticipated 1.25 per cent hike in National Insurance contributions, the rise in the National Living Wage from £8.91 per hour to £9.50, and VAT on purchases in hospitality venues returning to 20 per cent.
On top of all this, Tasty, which also runs five Dim T restaurants, said the UK’s departure from the European Union and the pandemic had caused difficulties in hiring and retaining staff and forced them to raise wages in some instances.
Its headcount rose by 330 to slightly less than 1,000 at the end of last year, although it admitted that staff shortfalls had led to temporary closures of some outlets when there had been positive Covid-19 cases.
Chain: Aside from Wildwood, Tasty plc also operates the Dim T Asian-themed restaurants
The London-based group acknowledged that four of its outlets are not trading either because of labour shortfalls or weak trading conditions, and is considering selling or re-gearing the lease on two or three of them.
Virtually all sectors have been impacted in some form by recruitment problems, but this issue has been particularly acute for hospitality firms, which have relied for some years on significant numbers of EU immigrants to fill positions.
Many of these workers returned home after the Brexit referendum or during the coronavirus pandemic when all non-essential businesses, such as restaurants, were forced to shut when nationwide lockdowns were in force.
‘During the two years of the Covid-19 pandemic, we have had to deal with and adapt to unexpected challenges,’ remarked Tasty’s chairman Keith Lassman.
‘It has been a test of endurance, strength and resilience, and our success has been testament to our dedicated teams and management, and our customers.’
Plea: Business leaders have said that Chancellor Rishi Sunak’s Spring Statement did not go far enough, with calls to extend the 12.5 per cent VAT rate for hospitality going unheeded
Business leaders had been urging Chancellor Rishi Sunak to announce some relief measures in his Spring Statement today to give the hospitality trade a much-needed boost following two years of mass job losses and closures.
Sunak did reveal a 50 per cent discount on business rates for hospitality companies, a £3,000 increase to the threshold at which National Insurance contributions start to be paid and an expansion in the Employment Allowance.
Yet amidst soaring energy and fuel prices and inflation reaching 6.2 per cent last month – its highest level in 30 years – hospitality bosses complained that the Spring Statement did not go far enough, with calls to extend the 12.5 per cent VAT rate for their industry going unheeded.
UKHospitality’s chief executive Kate Nicholls said the decision not to prolong the reduced VAT rate was ‘might prove fatal’ for many firms and make it harder for others to recoup their losses.
She added: ‘Locking in VAT at 12.5 per cent would have given hospitality businesses a major boost, and helped the sector in its ambition to lead the UK back to post-Covid prosperity.
‘As it is, thousands of jobs could be lost, the UK will remain uncompetitive versus international rivals, and already hard-pressed consumers in the midst of a cost-of-living crisis will see price rises in their favourite pubs, bars and restaurants, further fuelling inflation.’
Tasty shares closed trading 10 per cent, or 0.5p, higher at £5.50 on Wednesday.
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