25 Jan 2017 07:00
The Restaurant Group plc
Post Close Trading Update
The Restaurant Group (the "Group") today provides an update on the results for the 53 weeks ended 1 January 2017.
The results are expected to be in line with previous guidance. Total turnover increased by 3.7%* versus the prior year, to £710.7m, with 53 week like-for-like sales down 3.9%. In the period the Group closed 37 sites and opened 24 sites.
Recent trading continues to be challenging, with 2016 quarter four like-for-like sales down 5.9%, driven by underperformance across our Leisure brands.
As presented at our Interim results, we have started price and menu trials across Frankie & Benny's, which confirm that substantial price and proposition changes are required. Our strategic review of our other Leisure brands has revealed a need for similarly significant change.
We are at the beginning of a transformation programme which is focused on:
1. Proposition improvement to ensure we are competitive on value with a distinctive offering that meets customers' needs.
2. Improving our operating processes to deliver a consistently attentive and engaging service and better align service levels to our trading patterns.
3. Building a better business which is leaner, faster and more focused.
We expect the trading performance of the business in the first half of 2017 to remain difficult, but anticipate momentum improving towards the end of this transitional year as our initiatives start to take effect.
During 2017, the Group will also face well documented external cost pressures from the increases in the National Living Wage, the National Minimum Wage, the Apprenticeship Levy, the revaluation of business rates, higher energy taxes and increased purchasing costs due to the combined effects of a devalued pound, and commodity inflation.
At our Preliminary results on 9th March we will provide an update on the proposition development in Frankie & Benny's, the strategic reviews of our other Leisure brands and the cost efficiency opportunities identified across the Group.
Andy McCue, Chief Executive, said:
"Since joining the Group in September, I have been impressed by my colleagues' passion for our brands, and commitment to our customers through what has been a very difficult trading period. I'd like to thank them all for their positive contribution, and for their continuing support, as we make the necessary changes to offer better value and satisfaction to our customers."
* On a 53 week v 53 week basis total turnover increased by 0.9%
25 January 2017
Enquiries:
The Restaurant Group Andy McCue, Chief Executive Officer Barry Nightingale, Chief Financial Officer
| 020 3117 5001 |
Instinctif Partners Matthew Smallwood Guy Scarborough | 020 7457 2020 |
Notes:
1. The Restaurant Group plc operates 491 restaurants and pub restaurants throughout the UK. Its principal trading brands are Frankie & Benny's, Chiquito, Coast to Coast, and Brunning & Price. It also operates a multi-brand Concessions business which trades principally in UK airports.
2. This statement is based on information sourced from management accounts.
3. Statements made in this announcement that look forward in time or that express management's beliefs, expectations or estimates regarding future occurrences are "forward-looking statements" within the meaning of the United States federal securities laws. These forward-looking statements reflect the Group's current expectations concerning future events and actual results may differ materially from current expectations or historical results.