Leon is still looking to expand its footprint despite plunging further into the red ahead of its transfer to Asda by the Issa brothers last year.
The latest accounts for the fast food chain filed at Companies House show pre-tax losses widened from £13.2m to £19.5m during the year to 31 December 2023, despite a 24% jump in sales to £69.4m, as it battled with increased costs and strike action across the rail netowrk.
Leon was initally acquired by EG Group in April 2021 for a reported £100m, as Mohsin and Zuber Issa looked to add more food-to-go options in its forecourts, as well as to the Asda business which it acquired in a £6.8bn private equity deal with TDR two months earlier.
The sale was a godsend for Leon’s founders, Henry Dimbleby and John Vincent. The healthy fast-food chain, founded in 2004, had not made a pre-tax profit since the £358,793 it recorded in 2015 and with sales nosediving due to the pandemic, Vincent admitted just days before the sale that Leon was losing £200,000 per week and said it was “quite possible” the chain would collapse if the lockdowns continued.
But while sales have improved as it added 10 new sites in 2022, they are well short of the £90m sales recorded in Leon’s 2019 accounts, and losses widened, forcing the chain to shutter three sites, with no new franchises added. As well as inflationary pressures on the cost of sales and the impact of strike action across the rail network, Leon said sales were constrained by the working from home trend, which led to a slower recovery of sales at office-centric locations.
However, ownership transferred to Asda towards the end of the financial year, when EG Group sold the majority of its forecourts, as well as Leon and its franchises with Subway, Starbucks and KFC in a deal worth £2bn. And the chain’s management told The Grocer it was “confident” the brand would keep growing and was already showing “continual improvement” in 2024, it said.
“While we’ve seen a slight reduction in the number of sites, this is part of our ongoing efforts to optimise our presence,” said Leon managing director Mac Plumpton. “Looking ahead, we are actively exploring new opportunities to expand in key locations that align with our growth strategy.
“Leon is a fantastic and well-established brand, and under the ownership of Asda it continues to deliver on its mission to make it easier to eat and live well,” added Plumpton.
“We continue to expand Leon’s offering through continued menu innovation such as the new Chicken Caesar Burger, and ongoing expansion in the right locations and formats. We’re excited to be opening two new locations in the autumn.”
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