Up to £230m – that's how much the value of The Restaurant Group went down yesterday, according to estimates, after its latest trading update caused investors to lose confidence.
Shares plunged 18%, and now stand at 512.50p, after it reported weaker than expected results for the 52 weeks ended 27 December 2015, suggesting falling sales in late 2015.
Total turnover was up 7.9% on the prior year, and like-for-like sales increased by 1.5%, in results that were slightly weaker than those for the 45 weeks to 8 November at 8% and 2% respectively. The Group’s brands include Frankie & Benny’s, Garfunkel’s, Chiquito, Coast to Coast, Brunning & Price and Filling Station. During 2015 it opened 44 new restaurants.
It said a possible referendum on the UK’s continued membership of the European Union, the national living wage implementation and global uncertainty, all created an uncertain business environment.
Its trading statement said: 'It has become apparent from much of the recent data from the retail sector and the wider economy that the trading environment for many consumer-facing businesses has been tougher in recent months than it was earlier in 2015. This has caused like-for-like sales growth to trend lower and accordingly we are more cautious than previously on the outlook for 2016.'
It continued: 'The company’s move towards a more balanced portfolio is paying dividends and we have a proven track record established over many years of delivering strong financial returns and excellent cash flows, even through more difficult trading periods. Therefore, notwithstanding some of the uncertainties described above, we are confident that TRG is well positioned to deliver further profitable progress in 2016 and subsequent years.'
The group’s full year results will be announced on 9 March.