The Restaurant Group reports acceleration in openings: The Restaurant Group, which operates over 450 restaurants and pub restaurants, has reported an acceleration in new openings whilst like-for-like sales were up 2.5% in the first half of its financial year ending 29 June. Total sales rose 10% to £308m (2013: £280m) with profit before tax up 12.3% to £53.2m (2013: £46.9m). A total of 17 new sites opened in the company’s first half and a further three have opened so far in the Second Half. A total of 38 to 43 new openings are now expected for 2014. The company reported continued strong trading with year to date like-for-like sales for the 34 weeks to 24 August 2014 up 3.5%. Andrew Page, chief executive of The Restaurant Group, said: “The Restaurant Group has delivered another record set of results, with double digit growth in earnings, dividends and cashflow. These results reflect the hard work and efforts of all of the TRG team and I would like to record my thanks to them for delivering another outstanding performance. The Restaurant Group is in great shape, I am confident that it will continue to prosper and I wish Danny and the TRG team well as they take the business forwards.” Danny Breithaupt, incoming chief executive, added: “I am delighted to be taking on the leadership of TRG with the business in such great shape. TRG has a clear strategy, successful brands and a great team of people. This is a terrific platform for the further growth of the business, and I am looking forward to building on this and leading the Company through its next phase of development.” Chairman Alan Jackson said: “I am pleased to report that the Group has traded well during the first six months of the year, delivering strong growth across all of the key metrics, with sales, margins and profits all increasing. Total sales grew by 10%, like-for-like sales were 2.5% ahead of the previous year (against tough comparatives), operating profit margins increased by 20bps and profits were 12.3% ahead. This represents another strong performance from the Group. Like-for-like sales grew in each of the first five months but were slightly negative for June, essentially as a result of the impact of the football World Cup. Since the half year, like-for-like sales have grown strongly in July and August so that, for the 34 weeks to 24 August, the Group’s like-for-like sales are 3.5% ahead of the prior year, which bodes well for a strong second half performance. During the first six months of the year we opened 17 new restaurants and since June we have opened a further three restaurants. Our new openings are performing strongly and we anticipate opening between 38 and 43 new restaurants during the year.”

The company stated: “Frankie & Benny’s traded strongly during the first half to deliver a sizeable uplift in revenues and profits. Frankie & Benny’s enjoys a loyal and growing customer base as a result of its wide range of offerings, with great value for money and high levels of customer service. As was the case last year, we have continued to experience an ongoing increase in the number of breakfasts sold and this additional trade is particularly helpful in terms of enhancing bottom-line profits. We opened nine new restaurants during the first half and another one since the end of the first half. The new openings are trading well and are set to deliver strong returns. During 2014 we expect to open a total of between 18 and 21 new Frankie & Benny’s restaurants.”

The company stated: “Chiquito performed well during the first half recording strong increases in both revenues and profits. With the growing popularity of Tex-Mex cuisine and our focus on variety, authenticity, service and customer engagement, Chiquito continues to deliver good results. During the first half we opened one new restaurant; it is trading strongly and is set to deliver high returns. We have opened one further restaurant since the half year end, and expect to open a total of between seven and nine in the full year.”

The company stated: “Coast to Coast has performed strongly with a substantial increase in revenues and profits. We have opened new restaurants in Rochester and Sheffield during the first half, both of which sit alongside existing Frankie & Benny’s and Chiquito restaurants. In each case our new Coast to Coast restaurants are trading superbly and are set to deliver strong returns. This further re-enforces our view that we have developed, with Coast to Coast, a new brand with significant growth prospects and one that complements our existing successful Frankie & Benny’s and Chiquito brands. We had expected to open at least five new Coast to Coast restaurants during 2014. However, as a result of landlord and developer delays, at least three sites we had anticipated would open during 2014 will now open in the earlier part of 2015. Notwithstanding these delays we expect to open at least one further restaurant this year, and a substantially higher number in 2015.”

The company stated: “Our pub restaurant business has delivered an outstanding performance in the first half with significant increases in revenue and profit. As previously noted, we now have a well-established model for our Pub restaurant business which is scalable and capable of delivering sustained and high levels of return on investment. During the first half we opened a new pub, the Aspinall Arms, near Clitheroe - its performance since opening has been exceptional and it is set to deliver strong returns. Since the first half we have opened another new pub, The Red Lion, near Lichfield and we expect to open two more new pubs during the remainder of the year.”

The company stated: “Garfunkel’s traded well during the first half and continues to deliver good levels of margins, profits and returns. Although currently we do not have any new Garfunkel’s planned for 2014, we are actively looking for potential new sites which will meet our criteria for returns on investment.”

The company stated: “The Concessions business traded strongly in the first half delivering strong growth in revenues and profits. UK passenger numbers (“pax”) continue to increase, growing by 4.6% in the first six months of the year. Once again, our Concessions business like-for-like sales growth outperformed UK pax growth over the first six months. During the first half we opened four units which included taking over all of the catering at Southampton airport and launching our new Wondertree restaurant at the new Terminal 2 in Heathrow. All of our new restaurants are trading well and are set to deliver strong returns. It was recently announced that we have won tenders to open two new restaurants and a new bar at the re-developed Stansted airport. These include a Coast to Coast restaurant (the first in a UK airport) and will open in early 2015. During the remainder of 2014 we expect to open at least one more Concessions restaurant.”

Tesco slashes capital expenditure as new chief executive arrives early: Tesco is to reduce capital expenditure by £400m and its new chief executive will arrive early on Monday. The company stated: “The combination of challenging trading conditions and ongoing investment in our customer offer has continued to impact the expected financial performance of the Group. The business continues to face a number of uncertainties, including market conditions and the pace at which benefits from the investments we are making flow through in the second half and consequently the Board has revised its outlook for the full year. We now expect trading profit for 2014/15 to be in the range of £2.4bn to £2.5bn. Trading profit for the six months ending 23 August 2014 is expected to be in the region of £1.1bn. Dave Lewis will now join Tesco as Chief Executive on Monday 1 September. He will be reviewing all aspects of the Group in order to improve its competitive position and deliver attractive, sustainable returns for shareholders. The Board is focused on maintaining a strong financial position in order to maximise its business and strategic optionality. Reflecting this and our current expectations for future performance, the Board anticipates that it will set the interim dividend at 1.16p per share - a reduction of 75% from last year’s interim dividend. In addition, we are implementing further reductions in capital expenditure. For the current financial year capital expenditure will now be no more than £2.1bn, some £0.4bn less than originally planned and a reduction of £0.6bn from the previous financial year. This will be achieved in a number of areas including IT and the slower roll-out of our store refresh programme.” Sir Richard Broadbent, Chairman, said: “The Board’s priority is to improve the performance of the Group. We have taken prudent and decisive action solely to that end. Our new Chief Executive, Dave Lewis, will now be joining the business on Monday and will be reviewing every aspect of the Group’s operations. This will include consideration of all options that create value for customers and shareholders. The actions announced today regarding capital expenditure and, in particular, dividends have not been taken lightly. They are considered steps which enable us to retain a strong financial position and strategic optionality.”