The popular restaurant chain Nando's has returned to profitability for the first time since 2016, but has issued a stark warning about how upcoming tax increases from Chancellor Rachel Reeves could impact its future performance.
From Losses to Profitability
According to newly filed accounts with Companies House, Nando's reported a pre-tax profit of £38.2 million for the year ending 23 February 2025. This marks a dramatic turnaround from the previous year's pre-tax loss of £50.1 million and ends a nine-year period of consecutive losses for the peri-peri chicken specialist.
The company's financial journey shows a steady recovery from substantial losses, including £86.2 million in 2023 and £99.4 million in 2022. Before this recent profitable year, Nando's last recorded a pre-tax profit in the year to February 2016, which totalled £19.1 million.
Revenue Growth and Expansion Plans
Supporting this return to profitability, Nando's announced that its revenue increased significantly from £1.36 billion to £1.47 billion. The South African-owned business also confirmed plans to open 14 new restaurants in the UK during the current financial year, demonstrating continued confidence in expansion despite economic challenges.
The company's growing presence is further evidenced by its increased workforce, which expanded from 24,878 to 25,473 employees over the financial year.
Future Challenges and Cost Pressures
Despite the positive results, Nando's sounded a cautious note about the coming year. The company specifically highlighted that increased costs due to tax and wage rises implemented in April are expected to affect its performance in the current financial year ending February 2026.
In a board-approved statement, the company elaborated: "While cost pressures remained a challenge and are continuing into the current trading year ending February 2026, the group has managed these pressures effectively. Most significantly wage inflation – including increases to National Insurance contributions in the UK – sustained high cost of goods and higher energy costs have resulted in a continued challenging trading environment across the sector."
Regarding current trading conditions, Nando's added that while sales continued to grow in the first half of the current financial year and customer demand remained encouraging, cost inflation persists at elevated levels.
The company is actively managing these pressures through various initiatives, including productivity gains and the rollout of energy-efficient grills across its UK and Ireland estate. However, Nando's acknowledged that despite these measures, cost pressures will likely continue to affect overall performance throughout the current financial year.
