Calendar An icon of a desk calendar. Cancel An icon of a circle with a diagonal line across. Caret An icon of a block arrow pointing to the right. Email An icon of a paper envelope. Facebook An icon of the Facebook "f" mark. Google An icon of the Google "G" mark. Linked In An icon of the Linked In "in" mark. Logout An icon representing logout. Profile An icon that resembles human head and shoulders. Telephone An icon of a traditional telephone receiver. Tick An icon of a tick mark. Is Public An icon of a human eye and eyelashes. Is Not Public An icon of a human eye and eyelashes with a diagonal line through it. Pause Icon A two-lined pause icon for stopping interactions. Quote Mark A opening quote mark. Quote Mark A closing quote mark. Arrow An icon of an arrow. Folder An icon of a paper folder. Breaking An icon of an exclamation mark on a circular background. Camera An icon of a digital camera. Caret An icon of a caret arrow. Clock An icon of a clock face. Close An icon of the an X shape. Close Icon An icon used to represent where to interact to collapse or dismiss a component Comment An icon of a speech bubble. Comments An icon of a speech bubble, denoting user comments. Ellipsis An icon of 3 horizontal dots. Envelope An icon of a paper envelope. Facebook An icon of a facebook f logo. Camera An icon of a digital camera. Home An icon of a house. Instagram An icon of the Instagram logo. LinkedIn An icon of the LinkedIn logo. Magnifying Glass An icon of a magnifying glass. Search Icon A magnifying glass icon that is used to represent the function of searching. Menu An icon of 3 horizontal lines. Hamburger Menu Icon An icon used to represent a collapsed menu. Next An icon of an arrow pointing to the right. Notice An explanation mark centred inside a circle. Previous An icon of an arrow pointing to the left. Rating An icon of a star. Tag An icon of a tag. Twitter An icon of the Twitter logo. Video Camera An icon of a video camera shape. Speech Bubble Icon A icon displaying a speech bubble WhatsApp An icon of the WhatsApp logo. Information An icon of an information logo. Plus A mathematical 'plus' symbol. Duration An icon indicating Time. Success Tick An icon of a green tick. Success Tick Timeout An icon of a greyed out success tick. Loading Spinner An icon of a loading spinner.

Fridays owner Hostmore warns over profits as costs rocket

Hostmore warned profits could be hit by weakening customer demand and higher costs (Alamay/PA)
Hostmore warned profits could be hit by weakening customer demand and higher costs (Alamay/PA)

Fridays owner Hostmore has warned that soaring costs and weaker customer demand will pull down profit margins for the year.

Shares in the company, which only floated on the stock market in November, plummeted as a result.

The group, which also owns cocktail bar and restaurant brand 63rd+1st, said it has changed its outlook for the rest of the year due to the “challenging consumer environment”.

Hostmore told shareholders that like-for-like revenues slipped by 6% over the 20 weeks to May 22, compared with pre-pandemic levels from 2019.

The hospitality business said it predicts that like-for-like volumes could be 8% lower for the rest of the 2022 financial year as the cost-of-living crisis weighs on household spending.

It added that food and drink cost inflation is currently around 10% but said it has partially offset this impact through fixed utility and supply contracts.

Nevertheless, the business expects higher costs and lower volumes to result in “low double digit” earning margins for the year, having previously forecast levels in the “mid-teens”.

It came as the group hailed progress with new openings, as it launched a new restaurant under the Fridays brand, which was previously TGI Fridays, in Chelmsford this month.

Fridays & Go site in Dundee
The group launched a new Fridays And Go site in Dundee (Euan Cherry/PA)

The group also launched a new Fridays And Go site in Dundee earlier in the period and said both have traded ahead of expectations.

Robert B Cook, chief executive of Hostmore, said: “We are not where we expected to be, however, I am able to report a financial performance which, regardless of the arduous challenge and extreme economic headwinds being encountered presently, allows us to confidently continue with our development strategy.

“Our ambition remains that of almost doubling the size of our existing portfolio brands over the medium term as economic conditions improve.

“Our relationship with landlords, coupled with a prudently managed balance sheet, provides the basis for confidence in the success of our strategy over the longer term.”

Shares were 12% lower in early trading.