UK restaurant group steadies sales

Garfunkels and Frankie & Benny’s owner The Restaurant Group today said it had halted a slide in sales after a hit from the volcanic ash crisis and slower trade during the World Cup.

The firm – which owns more than 40 restaurants in airports – was impacted by the air travel woes in the first six months of its year, while the World Cup added to pressure on the rest of its estate.

Interim like-for-like sales fell 0.5%, but it said it had seen more resilient recent trading since then, with like-for-like sales flat in the 35 weeks of the year so far.

Cost cutting helped the group deliver a 13% hike in underlying pre-tax profits to £24.6m (€29.5m) in the 27 weeks to July 4, or up 10% on a 26-week comparable basis.

This came despite the troubles at its airport eateries, where sales plummeted by around 90% over the week-long ash cloud crisis, knocking more than £500,000 off earnings.

Its Frankie & Benny’s and Chiquito businesses were then impacted by weaker trade during the World Cup.

This left interim earnings below a year earlier at Chiquito, although Frankie & Benny’s grew sales and earnings in a “creditable” performance.

The Restaurant Group, which also owns the Brunning & Price pub restaurant chain, said it had maintained its programme of restaurant openings, with eight new outlets launched in the half-year and a further four since then.

It also aims to open another 20 to 25 by the end of its financial year.

The group is already eyeing a handful of new sites next year for the Garfunkel’s business, which performed “superbly” in the half-year thanks to significant growth in revenues and profits.

Shares rose more than 2%, with Seymour Pierce analyst Hugh-Guy Lorriman upgrading full-year profits forecasts by around 7% on the back of today’s figures.

He said: “These are excellent results showing profitability holding up well.”

The Restaurant Group owns 375 restaurants, including more than 50 concessions and 42 pub restaurants.