The bleak outlook from Chiquito owner Restaurant Group (RTN) has made the market spit out its burrito as management boldly acknowledged that consistent like-for-like sales growth in this tough trading environment would be "difficult to generate". In the first 10 weeks of trading this year, total sales were up 6 per cent, but like-for-likes were down 1.5 per cent compared with a positive underlying growth rate of 2.5 per cent this time last year.
Chief executive Danny Breithaupt says his strategy to rebalance the group's portfolio by opening more of the aforementioned Mexican eateries and Coast to Coast sites will hit its largest franchise, Frankie & Benny's (F&B), as many of the new openings are in similar locations to F&B units. The fact there continues to be absolute sales growth, Mr Breithaupt suggests, vindicates the group's strategy, even if it puts the like-for-like metric under pressure for now.
Consumer demand has been soft of late, but Mr Breithaupt believes his competitors are in the same position. It's thought widespread price discounting means spending remains subdued across the board.
Analysts at Numis have trimmed their adjusted pre-tax profit forecast for 2016 from £92.5m to £90m, giving EPS of 34.7p, compared with £86.8m and 33.8p in 2015.
| RESTAURANT GROUP (RTN) | ||||
|---|---|---|---|---|
| ORD PRICE: | 448p | MARKET VALUE: | £900m | |
| TOUCH: | 447p-448p | 12-MONTH HIGH: | 728p | LOW: 447p |
| DIVIDEND YIELD: | 3.9% | PE RATIO: | 13 | |
| NET ASSET VALUE: | 141p | NET DEBT: | 10% | |
| Year to 27 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2011 | 487 | 48.6 | 17.2 | 10.5 |
| 2012 | 533 | 64.6 | 24.1 | 11.8 |
| 2013 | 580 | 72.7 | 28.0 | 14.0 |
| 2014 | 635 | 84.9 | 33.4 | 15.4 |
| 2015 | 685 | 86.8 | 34.6 | 17.4 |
| % change | +8 | +2 | +3 | +13 |
Ex-div: 16 Jun Payment: 6 Jul | ||||
