Reflecting robust across-the-board trading, Restaurant Group (RTN) delivered like-for-like sales growth of 5 per cent at the first-half stage. Add in decent cost controls and group operating profit jumped 14 per cent year-on-year to £31m.
The Frankie and Benny's chain enjoyed a "sizeable uplift" in revenue and profit, while the group's Chiquito outlets benefited from the popularity of Mexican food. Coast to Coast, the group's newest venture, also performed well, and the upmarket pubs business - though still generating less than 10 per cent of group turnover - also traded strongly. Indeed, finance director Stephen Critoph expects significant growth here - it also has the highest average spend across the group.
All of the 11 new restaurants opened this year are trading ahead of expectations and a further 19-24 are expected to go live before the year-end. Moreover, Mr Critoph says he's not worried about the possibility that growing supply in the sector could lead to margin pressure and rent inflation. He says that growth in branded restaurant numbers is being offset by a contraction in the independent sector - leading to a fairly static overall supply picture.
Broker Shore Capital expects full-year pre-tax profit of £71.8m, giving EPS of 26.5p (from £64.4m and 23.8p in 2012).
| RESTAURANT GROUP (RTN) | ||||
|---|---|---|---|---|
| ORD PRICE: | 547p | MARKET VALUE: | £1.1bn | |
| TOUCH: | 546p-548p | 12-MONTH HIGH: | 579p | LOW: 316p |
| DIVIDEND YIELD: | 2.3% | PE RATIO: | 21 | |
| NET ASSET VALUE: | 102p | NET DEBT: | 13% | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 252 | 26.0 | 9.63 | 4.50 |
| 2013 | 280 | 30.0 | 11.2 | 5.25 |
| % change | +11 | +15 | +16 | +17 |
Ex-div: 11 Sep Payment: 9 Oct | ||||
