Frankie & Benny’s owner The Restaurant Group on Tuesday outlined plans to take the axe to chunks of its estate, as it warned that one-off costs have pushed the firm into the red.
The FTSE 250 casual dining group, which has been grappling with weaker consumer confidence, higher wages and business rates, booked a one-off charge of £115.7 million in the six months to June 30.
That is linked to a more “cautious view” on future trading amid Brexit and market uncertainty in its leisure business, comprising brands such as Frankie & Benny’s, Chiquito and Garfunkel’s.
The division has closed 16 sites since January and around 50% of the remaining 352 properties could shut when lease exit opportunities arise in future.
The Restaurant Group recorded a pre-tax loss of £87.7 million, compared with £12.2 million profit this time last year. Stripping out the exceptional costs, profits rose 35.7% to £28.1 million.
Shares fell 10.9p to 143.3p.
New boss Andy Hornby, who joined last month, was upbeat as he said the firm’s other businesses — airport concessions, pubs and Wagamama — are all outperforming the market.
Group comparable sales increased 4% and Wagamama, which The Restaurant Group agreed a £559 million takeover of last year, led the growth with same-store sales up 10.6%.
Group comparable sales in the most recent six weeks rose 0.2%.
Chair Debbie Hewitt hailed “a really good performance in a very tough market”.
Article Written by Joanna Bourke of Evening Standard https://www.standard.co.uk/business/the-restaurant-group-plans-to-sell-sites-as-it-swings-to-a-loss-a4227951.html
Photo Courtesy of Evening Standard