The Restaurant Group today provides an update on recent trading and its expectations for the 2016 financial year.
Since we updated on current trading with the preliminary results on 9th March, we have seen a further deterioration in trading conditions, with our Leisure business, in particular, continuing to be impacted by the structural and business challenges referred to in the March Preliminary results statement. As a result for the 17 weeks to 24 April, total sales are up 4.7% and like for like sales are down 2.7%.
In the short term, we do not anticipate any improvement to underlying like for like trends and, on this basis, we now expect full year like for like sales to be down between 2.5% and 5.0% which would translate into full year profit before tax in the range of £74m to £80m.
We are actively implementing the operational initiatives to improve performance that we outlined in detail at the Preliminary results in March. The Group is cash generative and our balance sheet strong, supporting the dividend.
Review of Strategy
A comprehensive review of our current operating strategy has also commenced. This will include our property portfolio, site roll out programme, brand positioning and overheads. We will update on this review at the Interim results in August. We remain disciplined in our self-funded approach to the returns expected from new openings. Recent openings are generating good returns. Year to date we have opened four new sites, and expect to open a further three by the end of the first half. Overall openings this year will be fewer than last year, however we anticipate opening morethan 30 sites across the brands. We will reassess the optimum number of new sites in total and by brand to open going forward.
After 11 years with The Restaurant Group, it has been agreed that Stephen Critoph, CFO, will leave the Company with immediate effect. The Board has commenced the search for a new CFO. The Board thanks Stephen for his contribution.
The Group’s AGM will take place on 12 May. The next scheduled announcement after today’s update will be the Interim results announcement, which will be issued at the end of August.
Danny Breithaupt, CEO said:
“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.
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.”