RESTAURANT Group yesterday said its total sales for the first 18 weeks of the new financial year grew 5.5 per cent, but warned of tough market conditions ahead due to fragile consumer confidence.
The company, which owns the Garfunkel’s and Frankie & Benny’s chains, said yesterday sales of restaurants open for at least a year were 0.5 per cent ahead, while margins remained broadly in line with its expectations.
“Trading conditions during 2011 look set to continue to be similarly challenging to those we experienced during 2010, with consumer sentiment remaining cautious and household inflation and disposable income still under pressure,” chairman Alan Jackson said in a statement.
Restaurant Group shares, which have gained 20 per cent of their value since the beginning of the year, closed 7.8 per cent lower yesterday at 303.3p.
Analysts at Liberum Capital said the company may have to look to new sites to deliver earnings per share for investors. The group expects to open between 22 and 27 new sites this year.
Greg Feehely at Altium said of the share-price fall-off: “We would view this as an opportunity to add to holdings in a quality self-funded operator with a decent dividend yield and a fast-falling level of debt.”
City A.M. Reporter