Pizza Express has warned that its immediate prospects are "uncertain" after disappointing trading took a bite out of its profits.

The restaurant chain announced pre-tax profits before one-off items of �17.8m for the six months to the end of December, down from �21.8m in the same period a year ago.

Like-for-like sales - which strip out the effects of new store openings - fell by 4.8% over the period, with sales in London especially badly hit.

It added that discussions over a possible bid for the company were "well advanced" and that it hoped to make an announcement soon.

Fallen star

Pizza Express was founded in London in the 1960s and enjoyed rapid growth during the next three decades, becoming a firm favourite with investors after it made its stock market debut in 1993.

But changing restaurant fashions and a slump in tourist numbers in the wake of the 11 September attacks have taken their toll on the company's performance, denting profits and curbing sales growth.

In November last year, a takeover attempt led by the ailing High Street restaurant chain's former owner Hugh Osmond fell through.

But the chain is reported to have received a number of other approaches in recent months, including a possible management buyout headed by chief executive David Page.

'Encouraging' signs

Pizza Express said trading conditions remained difficult over the back end of last year, and competition remained fierce, especially from the pub sector.

Like-for-like sales within the M25 fell by 10%, while underlying sales remained "flat" in the rest of the UK.

But there was some good news for the restaurant chain.

Last December Pizza Express increased the size of its pizzas and revamped its menu in an attempt to lure diners back to its tables.

The company said the reaction to both these moves was "encouraging", and added that its restaurant refurbishment programme was also helping.