Individual Restaurant Group in hunt for development cash

Individual Restaurant Group (IRC), which runs the Piccolino and Restaurant Bar & Grill eatery chains, is looking for ways to raise cash to expand the business.

IRC today revealed an operating loss of £920,000 on turnover for the six months to July 4, 2010, of £24.6m, down two per cent.

The group pointed the finger at the World Cup, bad weather at the start of the trading period and increased payroll costs due to National Minimum Wage hikes as factors in the operating profit decline, despite holding gross margins at 73.4 per cent.

Nevertheless Steven Walker, IRC's chief executive, said he was confident about the "inherent strength" of the group's brands, but that the challenge was to be able to find a way to exploit this in the current lending environment.

IRC, which is believed to be effectively devoid of any development capital despite refinancing its £18.5m loan facility, is said to be looking at a number of ways to raise the funds necessary to expand its estate.

These could include merging the business, selling it, or a fund raising exercise with investors. All options were being investigated, the group said.

IRC said its finance costs had doubled during the period to £400,000 as a result of the refinancing exercise.

Walker said the group's revenue's in the first 10 weeks of the second half of its financial year had been "generally in growth".

IRC currently operates 22 Piccolino restaurants and 11 Restaurant Bar & Grill sites.

The group is chaired by Robert Breare, the pub and restaurant entrepreneur who left Merchant Inns last year after it went into administration with debts of more than £30m.