Shop closures, staff costs and deteriorating spending are biting restaurateur Tao Heung Holdings.

Chairman Chung Wai Ping has issued a profit warning to shareholders to expect a drop in earnings as high as 50 per cent.

The company blamed the profit drop on declining in turnover due to weak consumer sentiment in Mainland China and Hong Kong, increased staff costs to support the group’s operations, increased rents as leases come up for renewal and costs associated with store closures.

“Based on the preliminary review of the unaudited… accounts of the group for the six months ended 30 June, it is expected to record a significant decrease of approximately more than 50 per cent in the amount of profit attributable to equity holders of the company,” the statement said.