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Record profits for San Carlo

Kevin Feddy
30/ 6/2008

ITALIAN restaurant chain San Carlo today showed how it is defying the consumer spending slowdown with record half-year profits as it vowed to press ahead with a multi-million pound expansion programme.

San Carlo, which has its flagship venue on Manchester's King Street West, posted operating profits of £1.2m for the six months to March 31, up from £650,000 last year.

Turnover surged from £6.3m to £7.6m, boosted by the acquisition last July of the Signor Sassi, in London's Knightsbridge district.

Revenues for the full year to September 30 came to £11.2m and profits were £750,000.

The Manchester San Carlo is the group's biggest outlet, with 220 covers. It serves 3,500 people a week and is popular with stars of Coronation Street and Manchester United, while former Manchester City and England manager Sven-Goran Eriksson was a frequent customer during his time in the city.

First-half takings in Manchester increased from £2.3m to £2.85m.

San Carlo's other restaurants are in Birmingham, Bristol and Leicester.

The group employs 300 people in total and is led by founder and chairman Carlo Di Stefano, 64, who lives in Prestbury, Cheshire. His son Marcello, 29, is a director. Marcello said the first half exceeded expectations and that Manchester had continued to perform strongly.

Trade

"Trade in the city is fantastic," he said.

"We thought there might be a slowdown but we are seeing anything but. Manchester is booming - there are always concerts, big soccer matches or sports events which bring people into the city, the corporate lunch trade is buoyant, and more and more people are living in the city centre."

The group said soaring revenues had more than offset the impact on margins of higher import costs for goods such as wine, pasta and cheese, triggered by the strength of the euro.

At the same time, fixed costs have remained fairly static, enabling the group to improve its profits as revenues rise.

Carlo Di Stefano said: "These results show that whatever the economic climate, people still want to enjoy top quality food in the right atmosphere.

"Unlike other restaurants, we have not put our prices up. We are absorbing increased costs for the longer-term benefit of our business."

San Carlo is to open a restaurant in Liverpool in October on the site of a former bank and is eyeing sites in Leeds and another in London. Each outlet costs around £1.5m to develop.

San Carlo is being advised on its expansion plans by Steven Gordon, a partner at accountancy firm Jackson Stephen.