The Restaurant Group scraps dividend and eyes 90 site closures
The Restaurant Group has suspended its dividend as it announced plans to ramp up Frankie & Benny’s and Chiquito site closures to focus on its Asian-fusion chain Wagamama.
The figures
Restaurant Group’s shares dipped 3.1 per cent in early trading as it announced it will scrap its dividend to focus on a new strategic plan.
The company said this morning that group like-for-like sales were up 2.7 per cent last year, with total sales up 56.4 per cent to £1.07bn.
It reported a loss before tax of £37.3m, compared to a £13.9m profit the previous year. Adjusted profit before tax was £74.5m, up from £53.2m the previous year.
The company took an £111.8m hit during the year related to impairment in its leisure business, which includes the Frankie & Benny’s and Chiquito brands.
That left investors to suffer a loss per share of 8.2p.
The firm reported operating cash flow of £140.5m during the year, compared to £88.2m in 2018.
Why it’s interesting
The Restaurant Group this morning said it will downsize its leisure estate from 350 sites to a target of 260 to 275 sites by the end of 2021.
Last year the company reduced its overall estate size by 18 sites via closures and conversions to Wagamama.
The company said over the next two years it will continue to grow its Wagamama, concessions and pubs division.
What The Restaurant Group said
Chief executive Andy Hornby said: “Having joined the business in August last year I am particularly pleased with the continued and significant progress made following the acquisition of Wagamama and the integration of the business into the Group, which has transformed the Group’s growth trajectory and momentum.
“Our three growth businesses of Wagamama, Concessions and Pubs are all out-performing their respective markets and have clear potential for further growth. I am also acutely aware of the challenges facing our Leisure business and the wider casual dining sector.
“It is therefore clear that our strategic priorities need to evolve in order to maximise shareholder value in the medium term. “