Nando's has made a cheeky return to profitability after suffering years of substantial losses totalling more than £600 million, though the popular restaurant chain has immediately issued a warning about the impact of recent tax increases introduced by Chancellor Rachel Reeves.
A Long-Awaited Return to the Black
Newly filed accounts with Companies House reveal that Nando's achieved a pre-tax profit of £38.2 million for the 12 months ending 23 February 2025. This marks a significant turnaround for the peri-peri chicken specialist, representing its first profitable year since February 2016.
The recent profit stands in stark contrast to the company's previous financial performance. In the prior year, Nando's recorded a pre-tax loss of £50.1 million, which itself was an improvement from the £86.2 million loss in 2023 and the £99.4 million deficit in 2022. The chain's financial difficulties were particularly severe during the pandemic, with losses reaching £241.7 million in the year to February 2021.
Revenue Growth Amidst Ongoing Challenges
The return to profitability was supported by substantial revenue growth, with Nando's announcing last week that its turnover increased from £1.36 billion to £1.47 billion. The company's operating profit more than doubled, jumping from £59.8 million to £146.6 million.
Despite these positive indicators, the South African-owned business sounded a cautious note about its current financial year. The company specifically highlighted increased costs following tax and wage rises implemented in April, warning these factors are likely to impact performance.
Expansion Plans and Cost Pressures
In a statement of confidence in its UK operations, Nando's confirmed plans to open 14 new restaurants across the country during the current financial year. The chain also increased its workforce from 24,878 to 25,473 employees during the last reporting period.
However, the board-approved statement outlined significant challenges: "While cost pressures remained a challenge and are continuing into the current trading year ending February 2026, the group has managed these pressures effectively."
The company identified several specific pressure points, including wage inflation, increased National Insurance contributions, sustained high cost of goods, and higher energy costs, creating what it described as "a continued challenging trading environment across the sector."
Nando's reported that sales have continued to grow in the first half of the current financial year, with customer demand described as "encouraging." Nevertheless, the company acknowledged that cost inflation remains at elevated levels and is actively managing these pressures through various initiatives, including productivity gains and the rollout of energy-efficient grills across its UK and Ireland estate.
The company concluded: "While these actions have been effective in mitigating some of the impact, we anticipate that cost pressures will continue to affect our overall performance in the current financial year."
