UK Pizza Hut to raise funds after Budget tax hikes

Published On Nov 16, 2024, 3:31 PM

The UK operator of Pizza Hut restaurants, Heart With Smart (HWS), is planning to raise over £10 million to offset increased costs due to tax hikes. The funds may come from selling a portion of the business or through investments from existing shareholders. The company anticipates a £4 million rise in labor costs due to an increase in employers' national insurance contributions and the National Living Wage. To manage these costs, HWS will invest in new technology for operations but expects to maintain staff levels without major redundancies. Despite the challenges, HWS feels unable to significantly increase prices for customers, limiting their ability to pass these costs on.

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The raising of funds by HWS indicates a proactive approach to address financial challenges stemming from wage and tax increases, which could stabilize the business in the long run. However, the inability to pass costs to consumers could pressure margins. Investors should watch for potential shifts in customer acceptance of price increases.

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