FishWorks, the AIM-listed fishmongers and restaurant group, has reported annual losses of £5.5 million.

Like-for-like sales for the year ending July 31 rose by 5.1 per cent, but pretax losses hit £5.5 million, more than three times last year's figure of £1.7 million.

Over the past year the group has undergone a thorough overhaul. In July, Mitch Tonks, the founder of the chain, left as director. Mr Tonks, a self-taught chef who began his career as an accountant, developed the chain from his first fishmongers in Bath.

It has offloaded three underperforming sites, including those in the fashionable Notting Hill and Parsons Green areas of London - in the past 12 months, and sold Channel Fisheries, its supply business, in September.

In a statement this morning Gary Ashworth, chairman of FishWorks, said the group had achieved "significant cost savings centrally".

"Like many others we remain cautious regarding the UK financial outlook but although current market conditions are extremely tough the Board believes they will also present good opportunities in the coming months, as commercial terms improve on potential acquisitions of additional units."

Paul Goodale, chief executive of FishWorks, told Times Online that the group was focusing its attention on its customer-facing operations, and he said it would be "foolish" to start cutting back on elements of the business which have an impact on the customer's experience.

FishWorks has faced difficulties for two years.

In February 2007, its stock suffered after it admitted "material uncertainty" over its future, shortly after Ratnesh Bagdai, its then finance director, was dismissed after less than a year in the role. Mr Bagdai was succeeded by Chris Marsh, who took on the post in a part-time capacity until Stephen Easthope was appointed in February this year.

This followed a surprise profit warning in November 2006, when the management forecast profits of £750,000 against a market consensus of £2.1 million. The company, in which Luke Johnson, Channel 4 chairman and entrepreneur, holds an 11.1 per cent stake, was floated on AIM in 2005.

FishWorks styles itself as a brand of the moment, with an emphasis on sustainably-sourced produce and a delivery service in the affluent seaside town of Brixham in Devon to match its 10 outlets in chichi locations in the south west and London, which include Chelsea, Islington, Chiswick, Primrose Hill and a new flagship restaurant in Swallow Street, Piccadilly.

Mr Goodale said that initially Christmas bookings had been slow this year.

"As per the experience of a lot of other people Christmas bookings were late in starting this year," he said. "Obviously people are being very prudent with the arrangements they are making."

Mr Goodale added that while the chain's fishmongers perform well at this time of year, traditionally FishWorks restaurants do not see a spike in bookings at Christmas, principally because their residential locations and specialist offering do not make them an immediate choice for Christmas parties.

However, he said this was not the case with the new Swallow Street branch in central London.

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