Sushi restaurant chain, Wasabi, undergoes job cuts due to significant decrease in profit margins
Wasabi Reports Improved Financial Performance, Continues Expansion
Wasabi, the popular sushi chain, has reported a profit after tax of £231,000 for the year 2024, marking a significant improvement from a loss of £1.3 million in the previous period. The company's EBITDA also increased from £4.9 million to £6.6 million, indicating enhanced operational profitability.
Despite this positive news, some reports suggest a drop in pre-tax profit in 2024 compared to previous years. The reasons for these fluctuations are multifaceted. Expansion-related costs, industry-wide challenges such as inflationary pressures and increased costs for ingredients and labor, and competitive market conditions are all contributing factors.
The grocery business of Wasabi continued to perform strongly in Sainsbury's and Tesco, and the chain made significant strides with the successful Q4 2024 launch of its range in Morrisons and Co-op. The company is also well advanced in building a strong pipeline of new restaurants across the UK.
In the restaurant division, Wasabi performed well despite a challenging market environment, with particular strong growth in travel hub locations. The chain's headcount reduced from 1,314 to 1,186 over the past 12 months, a move that supported solid EBITDA conversion.
Wasabi's founder, Dong Hyun Kim, stepped away from operations towards the end of 2021. Henry Birts has been the chief executive of Wasabi since 2019. Under his leadership, the company has made significant investments in manufacturing automation, restaurant refurbishment, and IT infrastructure.
Wasabi's turnover for 2024 increased from £120.2 million to £121.6 million. The company operates in 33 locations in London, as well as in Birmingham, Cambridge, Kent, Leeds, Oxford, and one at Luton Airport.
Meanwhile, rival sushi eatery chain Yo! Sushi lost more than £20 million in the year ending March 31, 2024. Wasabi's statement signed off by the board indicates that the company built on its strong prior-year performance, delivering further sales and profit growth. The statement also mentions that healthy cashflow was generated to reinvest in the business.
Wasabi is exploring opportunities to work with franchise partners to accelerate growth. The company's focus on internal processes, productivity, and cost control will undoubtedly continue to support its financial performance moving forward.
- As Wasabi reported improved financial performance and continues its expansion, the company's focus on areas such as taxes, finance, and business strategies will be crucial in managing the expenses associated with industry-wide challenges, like inflationary pressures and increased costs for ingredients and labor.
- Given the positive financial performance and continuous expansion of Wasabi, the company's robust plans for franchise partnerships, along with an emphasis on internal processes, productivity, and cost control, will significantly impact the growth of their business and lifestyle offerings in the near future.
