March 8 Britain's Restaurant Group, the
owner of the Frankie & Benny's chain, said it would seek to
offer better value and improved service to win back customers
after reporting lower annual profit in 2016.
"It is clear that we had added an unsustainable premium to
pricing in our leisure businesses and that changes to our menus
had been insufficiently tested with our customers," said
Restaurant Group, which runs chains such as Chiquito and Coast
Adjusted pretax profit for 2016 fell 11.2 percent to 77.1
million pounds ($93.9 million) on total revenue which was up 3.7
percent to 710.7 million pounds. Like-for-like sales fell 3.9
The company, which operates more than 500 restaurants and
pubs in Britain, has put the brake on expansion plans until it
is sure that its brand and location strategy is 'sufficiently
robust', it said on Wednesday.
It has also identified cost saving of 10 million pounds to
be delivered by 2019.
N+1 Singer analysts said that the strategic review was frank
about failings and importantly, outlined a clear plan for each
part of the business. The brokerage has 'hold' rating on the
The company maintained its full year dividend at 17.4 pence
per share. Its shares were up more than 6 percent at 349 pence
at 0840 GMT.
"Having completed the strategic reviews of our brands, we
are now pursuing a new and focused plan to turn around and grow
the business," said Andy McCue, who became chief executive last
"However, there is much to change in our leisure businesses
to provide customers with better value and an improved
experience while, at the same time, ensuring we continue to grow
our pubs and concessions businesses," he added.
Restaurant Group reiterated its warning of a rise in costs
due to government initiatives such as the apprenticeship levy,
proposed increases in business rates and higher energy taxes.
The company also pointed to a rise in buying costs due to a
weak pound and commodity inflation.
($1 = 0.8210 pounds)
(Reporting by Rahul B in Bengaluru; editing by Keith Weir)