Leon plunged further into the red ahead of its transfer to Asda by the Issa brothers last year and closed three sites but insists it will keep growing under its new owners.
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 £64.9m.
EG Group had initally bought Leon in April 2021 for a reported £100m, as Issa brothers Mohsin and Zuber Issa looked to add more food-to-go options in its forecourts, as well as the Asda stores it had recently acquired. The healthy fast-food chain was founded in 2004 by Henry Dimbleby and John Vincent, but ran into trouble due to the pandemic. Days before the sale, Vincent admitted that Leon was losing £200,000 per week and said it was “quite possible” the chain would collapse if the lockdowns continued.
But ownership was transferred to Asda in October 2023 when EG Group, owned by the Issas, sold most of its UK operations to Asda, including the majority of its forecourts, in a deal worth £2bnwhile sales have improved they are well short of the £90m revenues recorded in Leon’s 2019 accounts.
Leon told The Grocer the widening losses were linked to inflationary pressures to the cost of sales and the impact of strike action across the rail network, which resulted in lower footfall to restaurants in transport hubs on strike days. It also said the working from home trend had led to a slower recovery of sales at office-centric locations.
Despite Leon having not made a pre-tax profit since the £358,793 it posted in 2015, the chain’s management said it was “confident” the brand would keep growing. It was already showing “continual improvement” in 2024, it said.
Despite an increase in revenue, the chain halted its expansion, closed three company-owned sites and did not add any new franchises in 2023.
The number of total sites went from 86 to 83 last year. In comparison, the chain opened 10 sites the previous year.
“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 fantastic and a 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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