The Restaurant Group plc (TRG) operates over 440 restaurants and pub restaurants under the principal trading brands of Frankie & Benny’s, Chiquito, Coast to Coast and Garfunkel’s, and has reported a strong performance in 2013 with significant growth in revenues, profits and cash flow:
2013 results – Compared to 2012
Revenue increased to £580m (like-for-like sales +3.5%) – +9%
Operating margin 12.9% – +40 bps
EBITDA increased to £107.8m – +13%
Profit before tax increased to £72.7m – +13%
EPS increased to 28.0p per share – +16%
Proposed full year dividend of 14.0p per share – +19%
Operations strongly cash generative. Operating cash flow £116.8m, up 15%
Roll out continues
- 35 new sites opened in the period
- 36-43 new sites targeted for 2014
- Over 1,000 new jobs created in 2013
Strong current trading, with total sales up 10% and like-for-like sales at 3.5% for the eight weeks to 23 February 2014.
Andrew Page, Chief Executive, commented:
“With the UK economy showing improvement, employment levels rising and inflation falling there are good prospects for an improvement in household finances. This bodes well for our sector and all of our team will be working determinedly to deliver another year of profitable progress. The Restaurant Group is in great shape and I am confident that it will continue to prosper.”
Chairman Alan Jackson added that:
“The Group delivered another strong performance in 2013 with significant growth in revenues, profits and cash flow. This is particularly impressive as it follows on from a decade of consistent growth and demonstrates the very formidable strength of the Group’s business.
“Like-for-like sales were 3.5% ahead of the previous year which represents an outperformance against our sector. I am very encouraged that this trend has continued into 2014 with like- for-like sales for the eight weeks to 23 February 2014 3.5% ahead of the previous year (first eight weeks of 2013: +6.5%).
“We have made a strong start to the current year, with sales growth of 10% (like-for-like sales up 3.5%) for the first eight weeks of the year and we are looking to build further on this as we move through the year. We have an outstanding business with market-leading brands in excellent locations, and an experienced management team with real strength and depth. All of our brands are well recognised, providing our customers with a wide range of choice and superb value for money. I am confident that we are well placed to continue our further profitable progress.”
Results by TRG brands
Frankie & Benny’s (232 units)
Frankie and Benny’s traded strongly in 2013 delivering significant increases in turnover, EBITDA and profit. Once again, margins were very strong and this is particularly encouraging as we have been further building the team and resource base in anticipation of an increased rate of roll out. During the year we opened 17 new restaurants of which six were on cinema sites. Trade at the new openings has been strong and they are on track to deliver excellent returns. We anticipate opening between 18 and 22 new Frankie and Benny’s restaurants in 2014. The strength of the Frankie and Benny’s brand, its breadth of appeal, versatility and high level of customer recognition all contribute to a consistent track record of success. This gives us great confidence that there is significant future roll out potential for this brand.
Coast to Coast (10 units)
We opened our first Coast to Coast restaurant in Brighton in November 2011. By the end of 2013 we had ten Coast to Coast restaurants of which five were opened during the year. The performance of our Coast to Coast restaurants has been excellent and in a handful of cases, truly exceptional. They are set to deliver strong returns. Eight of our ten Coast to Coast restaurants trade alongside either, or both, Frankie and Benny’s and Chiquito. These three brands complement each other well and we plan to continue to open further Coast to Coast restaurants alongside our other Leisure brands. We are planning to open between five and seven new Coast to Coast restaurants in 2014 and we have identified several dozen locations where we are confident that a Coast to Coast restaurant would trade well. Our forward pipeline is encouraging and we believe that this brand has significant roll out potential.
Chiquito (73 units)
Chiquito performed well in 2013 with a solid increase in revenues and a significant increase in EBITDA, profit and margins. We opened four new Chiquito restaurants during the year. They are trading superbly and are set to deliver strong returns. During 2014 we expect to open between five and seven new Chiquito restaurants.
Garfunkel’s (16 units)
Garfunkel’s traded superbly during 2013 and this has continued into 2014. Central London, the traditional heartland of Garfunkel’s, has been especially buoyant and Garfunkel’s has benefited from this. Like-for-like sales growth was exceptionally strong and this translated into significant increases in turnover, profit and margins. We are continuing to search for new site opportunities which will deliver our required returns.
Pub restaurants (49 units)
Our Pub restaurants business traded strongly throughout the year and delivered significant increases in turnover, profits and margins. We opened four new Pub restaurants during the year and these are trading well and are set to deliver strong returns. During the year our recent opening, The Bulls Head, at Mottram St. Andrew, won the Good Pub Guide’s “Best New Pub of the Year” award. We continue to build a portfolio of high quality pubs in terms of location, appeal, standard of food and service and, most importantly, consistent growth in profits. Our Pub restaurant business has the potential to grow significantly over the medium term and also to command a niche position as a high quality, nationwide Pub restaurant business. During 2014 we expect to open four to six new Pub restaurants.
Concessions (60 units)
Our Concession business traded strongly in 2013 with a solid increase in turnover and significant increases in EBITDA, profits and margins. Our business continues to gain market share and, as passenger numbers start to increase, we are confident that this trend can continue. During the year we opened five new units and these are set to deliver strong returns. We expect to open two to four new Concession restaurants in 2014.