Nando’s Group Holdings has reported annual sales exceeding pre-pandemic levels and a return to operating profit in the financial year ending 26 February 2023.
The chicken restaurant business said cost pressures remained a challenge and are continuing into the current trading year. Wage inflation, increases in the cost of goods and higher energy costs have resulted in a challenging trading environment across the sector, the company said.
Revenue during the period increased to £1,27 million (2022: £1,06 million). Operating profit/loss before exceptional items returned to a profit of £17.0 million for the first time since 2020 (2022: loss £1.2m), as margin on returning sales exceeded the company’s fixed operating costs.
The company said capital investment had increased with a spend of £78.2m and was continuing to open new restaurants (12 in the UK and Ireland), refurbish sites and invest in technology.
Heightened commodity prices, the continued conflict in Ukraine and inflation levels caused pressure ont he company, but it said it had been encouraged by strong customer demand for its chicken. However it said it expected these factors to “remain a significant drag” on overall performance in the current financial year.
Rob Papps, group chief executive of Nando’s, commented: “The 2023 financial year saw Nando’s deliver a steady recovery to pre-pandemic sales and a return to operating profit driven by strong consumer demand for our flame-grilled PERi-PERi chicken supported by our brand and customer proposition.
“Despite the improved sales performance. cost pressures including higher energy, labour and food prices remained a challenge.
“The macro-economic outlook for 2024 remains uncertain but we are continuing to invest for the future, with further menu innovation, enhancements to our digital capabilities and new restaurant openings planned in all our markets, including 14 in the UK.”
The principal activity of the group is operating fast casual dining restaurants (both company owned and franchise) and the sale and distribution of branded sauces and condiments.