Falling like-for-like sales and a warning of tougher trading conditions send shares in Frankie & Benny’s owner Restaurant Group (RTN) plunging 12.5% to 558p.
The casual dining group saw like-for-like sales growth of just 1.5% in the 52 weeks to 27 December, a deterioration from the 2.0% growth in reported in the third quarter.
The results are disappointing given the strength of the film slate in the fourth quarter. This was expected to boost Restaurant Group’s trading as half of its restaurants are located next to cinemas.
Analysts suggest the heavy rain in the north and Scotland deterred shoppers and there was too much competition.
Restaurant Group says consumer-facing businesses faced tougher trading towards the end of 2015, as evidenced by poor data from the retail sector and wider economy.
‘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 says.
Other issues concerning the £1.3 billion cap are the EU referendum, national living wage and global uncertainty.
Numis has cut its 2016 pre-tax profit forecast by 1% from £94.6 million to £93.5 million, but it says earnings growth should remain strong.
‘We would use any weakness as a buying opportunity,’ says Numis’ leisure analyst Douglas Jack.
