Papa John’s UK’s FY loss widen to £19.3m, lfl sales down 5.7%: Papa John’s UK saw its pre-tax loss for the year to 31 December 2023 widen to £19,289,000 (2022: £3,846,000), which was affected by the closure of 43 sites post year end that impacted its onerous lease and loan receivable provisions. The company, which had 524 sites in the UK at the year end – 408 of which operate under franchise, said that its profitability was also impacted by the costs of franchise portfolio restructure and general store sales performance when compared to 2022. It reported that like-for-like system sales across UK and Ireland declined by 5.7% during the year. Turnover stood at £95,902,000 (£95,149,000). The business said that following an impairment assessment as of 31 December 2023, the group’s investment in PJ Corp Stores – its newly formed company-owned business – was impaired by £11,421,000 resulting in a loss after tax of £18,527,000 (2022: £2,908,000). On 22 February 2024, the company made a decision to close 43 stores in the UK. The company said: “The valuation of assets and liabilities at 31 December 2023 was evaluated as a result of this decision. Conditions relating to the decision existed at 31 December 2023 and accordingly adjustments were made to the onerous lease provision and the loan receivables provision at 31 December 2023. These adjustments contributed to the increase in the onerous lease provision of £4,180,000 and the increase in the loan receivables provision of £1,800,000 during the year. On 26 April 2024, the company issued 8,713,495 ordinary shares of £1 to Papa John’s Pizza limited, with an aggregate nominal value of £8,713,495. The share issue was satisfied with conversion of debt of an equal carrying value. The directors believe that this does not impact the financial results of the company for the year ended 31 December 2023, or its financial position at that date, and therefore this event is non-adjusting. In 2023, our business in the UK continued to be affected by adverse macroeconomic conditions, including high inflation, rising interest rates, an energy crisis and slowing economic growth which resulted in negative comparable sales and a challenging operating environment for our franchisees. These challenges also impacted the financial condition of our UK franchisees. We have seen some signs of improvement in 2024 with both interest rates reducing and economic growth returning slowly. As we navigate this challenging economic environment, we are continuing to invest in capabilities to improve our operations and will continue the work to further re-position the franchise base to further strengthen our business in the UK. If our efforts to reposition the franchise base are unsuccessful, we might need to find new operators for certain restaurants and/or close them, which could adversely impact the company’s financial condition and results of operation in the region. The company’s commitment to the Papa Johns brand, with its focus on superior product quality and innovation remains. The company continues to invest heavily in marketing activities to further build on the brand recognition, and has continued to advertise in national media, leading to increased brand recognition by consumers.”