29th Apr 2016 07:09
LONDON (Alliance News) - The Restaurant Group PLC on Friday warned on profit for its full financial year after experiencing a "deterioration in trading conditions" which will lead to a fall in full-year like-for-like sales, as it revealed the resignation of its chief financial officer.
Shares in the company were down 16% at 314.00 pence Friday morning, shortly after market open.
The restaurant operator, which runs the Frankie & Benny's, Chiquito and Garfunkel's chains, said it is continuing to see a deterioration in trading conditions in financial 2016 so far, particularly in the leisure business, which it had warned on at the release of its financial 2015 results last month.
In the 17 weeks to April 24, total sales grew by 4.7% but like-for-like sales fell by 2.7% as a result of the difficult trading.
Restaurant Group said it doesn't expect any improvement in underlying like-for-like trends in the short term, which will lead to a fall in full-year sales of between 2.5% and 5.0%. This would translate into a full-year pretax profit in the range of GBP74 million to GBP80 million. Restaurant Group made a pretax profit of GBP86.8 million in financial 2015.
The company has commenced a comprehensive review of its operating strategy in an attempt to improve performance, covering its property portfolio, site roll-out programme, brand positioning and overheads.
Restaurant Group also revealed that Chief Financial Officer Stephen Critoph has resigned from the company with immediate effect, and that it has commenced the search for a replacement.
"We are focused in the short term on the operational levers that will improve our trading performance. In the medium term, we are reviewing the core strategic assumptions that differentiate our operating model to ensure that we optimise returns for shareholders," Chief Executive Danny Breithaupt said in a statement.
"In spite of the current like-for-like challenges, overall returns remain strong, the business continues to be cash generative, and there is a strong core business to build on," he added.
By Karolina Kaminska; [email protected] @KarolinaAllNews
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