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Thu 6th Oct 2016 - Losses deepen at Chipotle UK despite turnover increase |
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Losses deepen at Chipotle UK despite turnover increase: Losses have deepened at Chipotle UK’s seven strong operation despite a rise in turnover in the year to 31 December 2015. Turnover rose by 11.8% to £8,192,487 from £7,330,857 the year before. Operating losses were £4,718,336, including a £500,000 impairment, compared with £3,386,640 the year before. The £500,000 impairment charge relates to the closure of a Chipotle site in London’s Wimbledon Hill Road in August this year. The company opened its seventh site on 8 July 2015. The company stated: “Comparable restaurant sales for the year were 5.7%. We continue to see a negative impact on our Charing Cross location due to construction in the area. Our cost of sales for the full year of 2015 was £9.6m (2014: £8.3m), primarily consisting of restaurant level expenses. Refining our long-term supply strategy for our European locations remains an important objective and includes hiring a supply chain manager for the region late in 2015. We also continue to focus on labour costs as we strengthen our teams and become more efficient in serving our customers. Gross loss for 2015 was £1.4m (2014: £1m), an increase of 40% from the previous year. Administrative expense for the full year were £2.9m (2014: £2.4m), an increase of 18.5% primarily resulting from an increase in salaries and other employee costs.” Under the “principal risks and uncertainties” section of accounts filed at Companies House, the company stated: “Continued development in the UK will partially depend on our ability to generate strong sales and returns for our investors. Specifically, due to lower consumer familiarity with the brand, differences in consumer tastes or spending patterns, sales at restaurants in the UK may take longer to ramp up and reach expected sales and profit levels, and may never do so. To build brand awareness, we may need to make greater investments in advertising and promotional activity which could negatively impact our profitability.” Food accounts for £7,462,102 of UK turnover with beverages achieving sales of £730,385. The company now has estimated total losses of £12,716,799 (2014: £8,739,239) to carry forward against future trading profits.
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