The Restaurant Group has begun a comprehensive review of its current operating strategy after admitting it has seen a “further deterioration” in trading conditions over the past two months.
In a trading update issued this morning, it said that its Leisure business in particular had continued to be impacted by the structural and business challenges referred to in its preliminary results published on 9 March.
As a result for the 17 weeks to 24 April, total sales are up 4.7% and like for like sales are down 2.7%.
The company said that in the short term, it does not anticipate any improvement to underlying like for like trends and, on this basis, it now expects full-year like for like sales to be down between 2.5% and 5% which would translate into full year profit before tax in the range of £74m to £80m.
TRG, which owns brands such as Frankie & Benny’s and Chiquito, is now undertaking a full review of its property portfolio, site roll-out programme, brand positioning and overheads and said it will provide an update on this exercise when it releases its interim results in August.
The company has opened four new sites in the year to date, and expect to open a further three by the end of the first half. Overall openings this year will be fewer than last year, however it still anticipates opening more than 30 sites across the brands. It plans to reassess the optimum number of new sites in total and by brand to open going forward.
CEO, Danny Breithaupt, said: “We are focused in the short term on the operational levers that will improve our trading performance. In the medium term, we are reviewing the core strategic assumptions that differentiate our operating model to ensure that we optimise returns for shareholders.
“In spite of the current like for like challenges, overall returns remain strong, the business continues to be cash generative, and there is a strong core business to build on.”
Meanwhile, the company confirmed that CFO, Stephen Critoph, is to leave the business with immediate effect. He had been with TRG for 11 years. The Board said it wished to thank Critoph for his contribution and said it has commenced the search for a new CFO.