2017 was a bit of a nightmare for the Frankie & Benny’s and Garfunkel’s-owner. Starting at £3.33 the stock actually found itself at a 4 month high of £3.86 in early March – that was the extent of its good news, however. By the end of the year it had sunk to £3.02, marking a 9% drop year-on-year.
That decline has only ramped up since 2018 began, with the stock spooked not only by a dodgy January update, but a bombardment of worrying reports from its high street peers like Jamie Oliver Restaurant Group, Prezzo and Strada. Restaurant Group PLC now sits at a current trading price, and 8 and a half year nadir, of £2.32.
That January statement saw Restaurant Group reveal that full year like-for-like sales were down 3%, with total sales falling 1.8%. However, the company did argue that its ‘investments in price, food quality and marketing’ during 2017 – a shift that saw prices slashed at the likes of Frankie & Benny’s especially – saw ‘progressively improved volume momentum’ in its Leisure brands throughout the year.
CEO Andy McCue also stated he is aiming for the firm to launch 10 new pub locations in 2018, up from the 3 opened in 2017, alongside an increase in Restaurant Group’s presence in airports, both moves assumedly intended to ease the pressure on its struggling retail park properties.
In terms of Wednesday’s annual results, the company claimed back in January that it is ‘on track’ to meet current profit expectations, with adjusted pre-tax profit forecast to plunge 26% to £57 million and revenue set to drop 5.9% to £669 million.
Restaurant Group Plc (LON:RTN) has a consensus rating of ‘Hold’ alongside an average target price of £3.41.
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