Pizza Express takeover appetiser

By STEVE HAWKES
Updated:

 

STRUGGLING restaurants chain Pizza Express said a firm takeover bid was drawing closer despite a sharp fall in profits and little sign of improving sales. Chairman Nigel Colne said talks with several interested parties, including a management buyout team led by chief executive David Page, were well advanced and details could emerge within the month.

At least three bidders are thought to be circling Pizza Express after entrepreneur Hugh Osmond pulled a potential £250m bid in November, blaming a failure to agree terms.

Colne said: 'We are still talking to several bidders and that does, we can confirm, include management. We hope to be in a position to communicate to shareholders fairly soon.'

Speculation has grown on the back of the deepening crisis at Pizza Express, whose core London sites have been hit by dwindling tourist trade, increased competition and job cuts in the City.

The group, famed for its American Hot and Veneziana pizzas, operates 135 of its 311 UK restaurants within the M25 and said sales fell by 10% at these sites on a like-for-like basis in the first half to 31 December. Like-for-like sales across the rest of the UK were flat. Group turnover climbed 8% to £112m, but underlying pre-tax profits plummeted 18% to £17.8m.

Page, who would not comment on his buyout plans, said Pizza Express was doing what it could to withstand the downturn but added that trading conditions had not improved since the half-year. He said: 'This is the most severe downturn we have had for over 25 years. The next three to four months are going to be interesting, but we are doing the best we can within the confines of managing the company.'

Former chairman Page took over chief executive responsibilities exactly a year ago when Ian Eldridge left. He has brought in new management, revived the menu and made the pizzas bigger.

The first signs of a downturn emerged with a damaging profits warning in June last year. Annual results three months later showed the group had failed to lift full year profits for the first time since flotation in 1993.

Shares in Pizza Express were up 2 1/2p at 306p today, valuing the business at £219.6m.

Most watched Money videos