The Restaurant Group – operator of the Frankie & Benny's, Chiquito and Coast to Coast brands – has announced an 11.2% hike in pre-tax profits as it reaches over 500 sites.
The company opened 44 new sites during the 52 weeks ended 27 December 2015, creating 1,500 new jobs. Group revenues for the period were up 7.9% to £685m. Like-for-like sales were up 1.5%, while operating profits were up 10.5% to £88.9m.
The group also announced the full year dividend is 17.4p, up 13% from last year.
Its pub arm, which includes 54 sites, performed strongly, with the group stating there is a growing market for traditional, quality, food-led pubs. It plans to grow the estate beyond its North West and South East heartlands during 2016 with a particular focus on the Midlands. It also said it expects to open between five and seven new pubs during the coming year, between five and seven new Coast to Coast sites (there are currently 21 units), nine Chiquito sites (currently 86), and 14 new Frankie & Benny’s (which has 261 units).
Chief executive Danny Breithaupt said that although he was pleased with the results, the outlook for 2016 looks much tougher. He said: 'TRG has made good progress in 2015 and, despite difficult trading conditions, delivered double digit growth in profits and earnings per share. Our strategy of improving the balance of the portfolio is starting to take shape. [Reaching over] 500 sites for the first time, [is] an important milestone for the business.'
He added: 'In common with most consumer businesses we will again have some challenges to face in 2016. However, I am confident that the underlying strengths of our business will enable us to successfully navigate our way through this more challenging external environment.'
The company commented that trading patterns during the year were at times volatile, with weekends generally being strong, but midweek trading continuing to be softer. The most challenging periods were late 2015, when flooding hit sites in the North. Frankie & Benny's was the most exposed of its brands to some of the underlying challenges around retail footfall, and the increased number of competitor openings, it said. The ‘young adult’ focused Mexican-themed Chiquito however, will be the company’s ‘key growth engine’ over the next few years.
Current chairman Alan Jackson is due to step down on 12 May, and will be succeeded by Debbie Hewitt.