Frankie and Benny's owner the Restaurant Group sees its shares soar higher despite revealing slipping sales

  • The Restaurant Group said like-for-like sales fell 3 per cent in 2017
  • It owns family friendly restaurants Frankie and Benny's, Garfunkel's and Chiquito
  • Share price jumped 12 per cent on Wednesday as it pledged to revamp offering

By LOUISE HILL FOR THIS IS MONEY

Updated:

The owner of the Frankie and Benny's restaurant chain reported a slip in sales in 2017 but saw its share price soar 12 per cent higher on Wednesday.

Investors were not put off by a 3 per cent fall in like-for-like sales in 2017 across the Restaurant Group's brands which includes Garfunkel's and Chiquito, with its share price rising 11.96 per cent on the back of its annual results.

Earnings fell to £95.1million last year, down from £121million in 2016, and profit before tax was down from £77.1million in 2016 to £56.7million last year.

'Transitional year': Group boss Andy McCrue said it had made significant investments into price and proposition to refresh the company's offering to customers

'Transitional year': Group boss Andy McCrue said it had made significant investments into price and proposition to refresh the company's offering to customers

The group said the decline in sales and revenue reflects the investment it made in competitive pricing, marketing and product quality.

It cut the prices on its Frankie and Benny's and Chiquito menus by around 7 and 6 per cent respectively, with main courses at Frankie and Benny's slashed by 26 per cent compared to a year earlier after it found it had lost its image as a good-value eatery.

Boss Andy McCue said: 'As expected, 2017 was a transitional year for the group, with significant investments made in price and proposition within our leisure business, which is driving improving volume momentum.

'We start 2018 with a significantly more competitive offering in our leisure business, a strengthened pipeline of growth opportunities in both our pubs and concessions businesses, and a leaner, faster and more focused organisation.'

Strong sales in its pubs and concessions business, made up of the Brunning and Price chain, helped offset and falls in its restaurants over the year.

Earnings in the pub arm returned more than 20 per cent in 2017 and the group revealed plans to drive bookings and introduce private dining and accommodation by the end of this year.

It expects to open five to ten new pubs in 2018, it added.

The full year dividend payment was maintained at 17.4p a share.

It traded 28 points higher at 265.80p on Wednesday morning, nearly 12 per cent higher since trading opened.

 

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