Relief as Frankie & Benny’s owner The Restaurant Group slows sales decline

The City feasted on shares in The Restaurant Group today after the Frankie & Benny’s owner responded to critics with better-than-expected sales.

Shares in the company, which also owns Chiquito, Coast to Coast, Joe’s Kitchen and Garfunkel’s, came under pressure this week as analysts doubted its turnaround efforts, including cutting prices and restoring favourite dishes to menus, would pay off.

Today they leapt 32.4p, or more than 10%, as The Restaurant Group said that sales in restaurants open for more than a year fell just 1.8% in the past 20 weeks. That compared with 2016’s 3.9% decline and the 4% drop JPMorgan analysts had pencilled in.

TRG credited strong performances in its concessions and pubs businesses, which were boosted by increased passenger traffic and good weather respectively.

Cinema admissions helped its leisure business but TRG warned box-office sales and passenger numbers would moderate over the rest of the year.

Despite that, full-year pre-tax profit is likely to meet market expectations, it added.

JPMorgan upgraded the company from Neutral to Overweight. The broker concluded that the stock “appears too cheap”.