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Fri 28th Aug 2015 - The Restaurant Group reports LfLs up 2.5%, accelerating openings
The Restaurant Group reports LfLs up 2.5%, accelerating openings: The Restaurant Group has reported sales rose 8% to £334m (2014: £308m), with like-for-like sales up 2.5% in the 28 weeks to 28 June. Ebitda increased by 8% to £57.4m (2014: £53.2m). Profit before tax increased by 10% to £36.9m (2014: £33.7m) It is accelerating new site development with 12 new sites opened in the first half. A further nine new sites opened so far in the second half with 43-48 new sites expected for 2015. Year to date like-for-like sales for the 34 weeks to 23 August are up 2%. Danny Breithaupt, chief executive of The Restaurant Group, said: “The Restaurant Group has delivered another strong set of results, with good growth across all key performance measures and excellent progress on our strategy of increasing the pace of roll out in a more balanced way between our brands. These results reflect the hard work that has gone in to driving the continued evolution of the Group and I would like to record my thanks to our teams across the country for delivering another excellent performance. The strengthening UK economy, increasing wages and disposable incomes, combined with the secular trends driving ongoing expansion of the eating out market, give me great confidence that TRG is well set for continued strong growth this year and beyond.”

Of its major brands, it stated:

Frankie & Benny’s (251 units): Frankie & Benny’s traded well during the first half delivering good growth in turnover and profits combined with some margin improvements. During the first half we opened four new Frankie & Benny’s restaurants, with a further two opening since the end of June. These new sites are all performing well and are set to deliver strong returns. We expect to open a total of 13 to 15 new Frankie & Benny’s restaurants in the full year. Frankie & Benny’s has broad appeal, particularly among families. Service and value are important drivers within this market and we have worked hard in 2015 to ensure we remain ahead of the competition on these issues. The ‘Family Matters’ program, which represents a step change in service culture, launched across all sites at the beginning of the year. Both this and our Red Sauce Revolution menu implemented in August have been designed to deliver further long-term improvements in performance. We believe that both of these significant developments will ensure this brand is well positioned for growth both now and long into the future. 

Chiquito (79 units): The rejuvenation of the Chiquito brand, which started some two years ago, has continued apace. During H1 Chiquito recorded the strongest growth in both sales and profits of all our brands. We opened one new Chiquito during the first half, have opened three subsequently and expect to open a total of 8 to 10 in the full year. We are extremely pleased with the performance of recent openings, all of which are set to deliver strong returns. Major recent areas of focus include the development of the breakfast, dessert and cocktail offerings, all of which are contributing to strong sales growth. We are confident that Chiquito will become an increasingly important part of TRG’s success going forward and that it will further strengthen its position as a market leader in its sector.

Coast to Coast (13 units): Coast to Coast is now a well-established part of the TRG brand portfolio and has delivered a strong financial performance. Although we did not open any new Coast to Coast restaurants during the first half of the year, we have subsequently opened in three new locations. Two of these sites (Aberdeen and Northampton) sit alongside existing successful TRG units. The third new Coast to Coast opening is in Chester city centre. We believe Coast to Coast has the diversity of appeal to operate in multiple location types, as evidenced by the successful Birmingham city centre opening last year. The strong performance of our openings gives us great confidence in the future of this brand and that Coast to Coast will become an increasingly significant part of The Restaurant Group’s success and diversification over time.

Pubs (53 units): Our Pub restaurant business had an excellent first half with strong growth in turnover and profitability. In the first half we opened one new pub and we expect to open a total of 3 to 4 in the full year. We have a well-established model for our Pub business which is scalable and capable of delivering sustained high levels of return on investment. Over the last nine months we have deliberately strengthened the team in several areas to support the acceleration of new pub openings. The Pub business has now reached the scale at which it helps with diversification, trading well through hot summer months and providing good balance to the TRG portfolio. This business will only get better going forward as we accelerate the pace of new openings over the next few years. 

Concessions (60 units): The Concessions business traded strongly during the first half with good growth in turnover, margins and profits. During the first half we opened five new units, including a very strong roster of three outlets in the re-developed Stansted departures lounge, and our first airside unit at Birmingham Airport. We expect to open at least two more units in the balance of the year, making a total of at least seven new openings for the full year. This business continues to be a real success story for TRG. Our focus on concept development and customer service levels continues to generate levels of sales growth ahead of UK passenger growth numbers and excellent returns on investment. With a stronger economic outlook we expect to see travel hubs become busier in the coming years and we are well positioned to take advantage of this going forward.

Chairman Alan Jackson added: “Danny Breithaupt has now completed his first full year as CEO of the Group. I am delighted with the progress that has been made under his leadership both financially and culturally within the business, as clearly evidenced by these results which represent an outperformance against our sector. The Group benefits from operating in market segments with barriers to entry and excellent growth prospects which have proved to be resilient over many years. We have a strong portfolio of complementary brands and an impressive pipeline of new sites in terms of both quality and quantity. We also have a focussed senior management team which has been strengthened and re-energised over the last 12 months. All of these factors mean that the Group is now well positioned to deliver on the strategy of doubling in size with a more balanced portfolio over the next eight to ten years. With continuing improvements in the UK economy, a strong pipeline of new sites and an exciting cinema release schedule, I am confident that the Group will continue to make excellent and profitable progress both in this year and future years.”

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