The Financial Week Ahead – Tomlinson on top.

Pizza may have travelled (and sold) well from Italy, but it is a British chain of pizza restaurants which has attempted to export the popular food to distant shores. As Pizza Express group financial director Glen Tomlinson prepares to announce first-half results on 7 February, the company is contending with overseas branches that have done well, and others which have failed to bite. As popular as the up-market pizza restaurants have proved, they still have some way to go to show that the format – high-design interiors and high-quality food – will export to places like Egypt. City observers have seen the company go from strength to strength. Its full market value stood at £507m in the middle of last year, with turnover at around the same time of £99.6m. It also operates the Cafe Pasta chain of restaurants in the UK. The last full year pre-tax profits were revealed at £23m, a massive advance on the 1996 record profits of £10.2m. ‘For the last year or so it has been interesting looking at the challenges for the next stage of the company’s development which is opening 30 restaurants a year and delivering satisfactory growth in the UK,’ Tomlinson said. With such a background of money making, the company has been aggressively expanding, reaching a total of 235 outlets in Britain and 20 worldwide. But it’s the export product that may reveal an Achilles heal. So far the uptake has been good but the risks remain high for international expansion. While in Tokyo a new restaurant has entered the firm’s top five branches by enticing the Japanese away from their more traditional diet, to take £5,000 a day just one week after opening, the Egyptian restaurant is another matter. In Cairo the firm has turned to consultants to help turn around a noticeable dearth of customers and a performance, two years after opening, well below expectations. Tomlinson puts the difficulties down to the fact that Muslim culture prevents Pizza Express from selling alcohol which has had a marked effect on profitability.

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