The Restaurant Group sees 'subdued' growth in final quarter

The stock market value of The Restaurant Group (TRG), whose operations include the Frankie & Benny's and Bluebeckers pub restaurant chains, fell by nearly a third today after it reported "subdued" like-for-like sales growth in the last quarter of 2007.

Shares in the group slumped more than 29 per cent, despite it revealing in a pre-close update that trading during the Christmas period had been "solid". It said full year like-for-like sales were up 5.5 per cent, half a percentage point up on 2006.

Following a "very strong" like-for-like sales performance for the first three quarters of 2007, like-for-like sales growth in the final quarter of 2007 was more subdued at one per cent, versus a seven per cent rise in 2006.

But the group told analysts that competition had intensified and footfall was now less buoyant than it had been in the first three quarters of last year.

TRG opened 36 new restaurants during 2007, of which 34 were Leisure brands and two were Concessions and in October of last year acquired Brunning and Price's pub restaurant business.

The group said it had recently completed a refinancing exercise and now had committed banking facilities of £120m for five years until December 2012, on improved terms to the previous facility.

Andrew Page, TRG's chief executive, said: "Following on from like-for-like sales growth of five per cent in 2006, and against a more subdued economic backdrop, this is a good performance and a credit to our team.

"Although we anticipate tighter consumer conditions during 2008, we believe that the clear focus on our two distinct market segments, our robust business model and our value proposition will continue to benefit the group".

TRG reports its full year results on March 5, which the group expects "to be in line with management expectations and in line with the mid-range of current market forecasts".

The group's shares were down 29.9 per cent at 122.5p.