TGI Fridays operator Hostmore has narrowed its losses for the past year as it pushed forward with its turnaround strategy.

The UK hospitality company reported lower revenues in the face of the challenging backdrop for hospitality firms.

The update comes weeks after Hostmore, which runs 89 sites across the UK, agreed a deal to merge with US-based TGI Fridays Inc, to create a larger firm which will remain listed in London.

Hostmore said on Friday that 2023 was a “transitional year” as it sought to put its finances back on a strong footing.

It revealed revenues for the year to December 31 of £190.7 million, dropping from £195.7 million in 2022.

Nevertheless, it heavily reduced its pre-tax losses to £25.5 million from £108.3 million a year earlier.

The reduction came after significant cost-cutting, which it said provided a £6.2 million boost last year.

It also deferred planned restaurant opening for last year to the end of this current year, saving it around £15 million in capital expenditure.

Stephen Welker, chair of Hostmore, said: “2023 was a transitional year for Hostmore during which we successfully implemented a turnaround of the business.

“The turnaround reduced costs, deferred cash outlays for new store openings, and improved the operations of our existing stores, while introducing a revised capital allocation policy to focus on high ROI (return on investment) organic growth initiatives and prioritising the full repayment of our borrowings and initiating shareholder distributions.”