Frankie & Benny’s operator The Restaurant Group has said it is facing ‘continued headwinds’ as rising costs impacted profits and revenue at its interim results.
Adjusted pre-tax profits showed a slump of 30.3% to £25.5m for the 26 weeks ended 2 July 2017. Turnover declined by 7.1% to £333.1m, while like-for-like sales fell 2.2%.
The company – which also owns the Chiquito, Garfunkel’s, Filling Station and Joe’s Kitchen brands – opened 12 new restaurants and pubs during the period, and said it expects to open 18 to 20 sites total during 2017. It opened 24 during 2016.
The company said increasing labour costs, food and drink input costs, utilities and occupancy costs, had impacted its numbers and warned that it expected the inflationary cost pressures to continue during the second half of the year.
It has embarked on a number of cost-cutting measures to mitigate losses, with lower-price, price-fixed menus introduced at brands such as Garfunkel’s and Frankie & Benny’s.
Chief executive, Andy McCue, said: ‘We have made good progress against our strategic initiatives outlined in March. Our Leisure customers are enjoying a better value, higher quality product; our growth plans for our Pubs and Concessions businesses are advancing well and we have made good progress in delivering cost efficiencies. I’ve been impressed with our colleagues’ receptiveness to change and thank them for their contribution to stabilising the business.’
Dividends remained unchanged from last year at 6.8 pence per share, ‘given the board’s confidence in the plan and the strength of our balance sheet’, the company said.