Restaurant Group posts half year profits hike

The Restaurant Group (TRG), which operates Frankie & Benny's and Garfunkel's eatery chains as well as a number of pub restaurants, has announced like-for-like sales growth up three per cent in the first half of 2008.

The group appears to have ducked the more onerous consequences of the downturn in the economy, with overall sales up 18 per cent to £203m, while adjusted operating profits grew 19 per cent to £23.9m. Adjusted pre-tax profits rose by a fifth to £21.1m, while basic adjusted earnings per share rose nearly a quarter to 7.2p.

The group said the performance of its 43-site pub restaurant business had been "solid", but acknowledged the operation had been hit both by the economic uncertainty and by rising food cost inflation, "as a result of a higher meat content in its food offering".

"We have been able to mitigate the impact of cost pressures through careful menu engineering - both content and price point - and cost management initiatives," the group's non-executive chairman Alan Jackson said.

Brunning & Price, the food-led pub group which TRG bought last year, was performing "well and in line with our expectations", the group said.

TRG said turnover and profits had also grown across its Frankie & Benny's and Chiquito restaurant chains. While sales and profits were up across its concessions businesses, margins came under pressure.

Jackson said that while the group was not immune from the issues surrounding the UK economy, it had positioned itself "in a manner which has made it more resilient and enable us to continue to grow sales and profits".

He added the second half of the year had started well, with year-to-date like-for-like sales up 18 per cent.

The City welcomed the numbers, sending TRG's shares up 9.25p - seven per cent - to 141.25p.