Gowrings shares sizzle after profits rise

Shares in Burger King franchising group Gowrings soared 8% today after it served up a near-trebling in half-year profits from its restaurants and said the second half had started well.

The stock picked up 5p to 69.5p after the company said its 41 Burger King outlets in the UK had booked profits of £441,000 (€654,900) in the six months to June 30, against £163,000 (€242,100) in 2003.

Gowrings said it was looking forward to the traditionally stronger second half in its restaurants, where sales this month and in July topped last year’s levels.

The group, which sold its car accident repair centres in June, said in May that it could put itself up for sale after finding it difficult to attract new investment.

It has asked a team of financial advisers to review its options and said a decision on its future would be taken within the current year.

Today, it said the review was continuing and that it would keep shareholders informed of developments.

Gowrings is the second-largest Burger King franchisee in the UK.

It said the higher profits in the restaurant business – in the face of a 5% fall in like-for-like sales – came from increased efficiency in areas such as overheads and marketing.

The sales decline was due to a very quiet first four months of the year, particularly on the high street where it is facing more competition, although the sales trend since May had been positive.

It said it was benefiting from the closure last year of two loss-making stores and the trading from its outlet in Birmingham’s revamped Bull Ring shopping complex.

Gowrings said the weather and strong adult and kids’ promotions linked to the Shrek II and Spiderman films had helped trading in July and August.

The group has successfully introduced Cadbury’s soft ice cream to several stores and is looking to trial other new products.

Gowrings was originally set up in 1922 as a motor dealership, but ended its involvement in the car retailing business in 2002 by selling its two Ford dealerships to Inchcape.

In June this year, the group completed the sale of its three loss-making accident repair centres to Nationwide Accident Repair Services, severing more than 80 years of involvement in the motor trade.

Chairman and chief executive Derek Coulson said the centres at Wokingham, Swindon and Oxford had experienced a difficult couple of years.

“I’m pleased we have completed the sale of this business,” he said.