Pizza Express is pushing ahead with plans for at least 15 new restaurants by June despite the slowdown in sales growth shown in its interim results.
The group saw pre-tax profits soar by 40% to £13.2m in the six months to 31 December 1998, helped by the opening of 22 new restaurants and higher sales in its established outlets. Restaurants less than a year old contributed profits of £700,000 on turnover of £7m.
Turnover for the period was up 28% from £47.6m to £61m. Stripping out the new restaurants, like-for-like sales - although 3% ahead - grew more slowly than in 1997.
But the group's low and relatively few fixed costs, said chairman David Page, meant that the group could still prosper "in a period of fragile consumer confidence".
"In six years we have paid a premium on only 26 out of 161 new sites. We expect this parsimony to be maintained over the coming years," he said.
Average costs for new restaurants dropped by 6% to £460,000 per restaurant as a result of tight financial controls and static administrative costs. Operating profit margins improved from 19.7% to 22.1%.
Page also attributed the strong profits in part to the group's staff bonus schemes, with more than 250 employees receiving share options or subscribing to deferred shares. "It is no accident that this leads to superior performance, low absenteeism and below-average employee turnover," he said.
The 200-strong group is also planning to accelerate its international expansion with sites in Pakistan, Kuwait and Malta and negotiations ongoing in Japan and South Africa.
by Christina Golding