The Restaurant Group plc (TRG) has posted interim results for the 26 weeks ended 1 July 2018, showing like-for-like sales down 3.7%, with total sales down 2.1% to £326.1m (2017: £333.1m).
Adjusted profit before tax stood at £20.1m (2017: £25.5m). Statutory profit before tax of £11.7m (20172: £12.6m). Adjusted EBITDA was £38.1m (2017: £44.3m).
The group reported that operating cash flow was £25.6m (2017: £46.0m), and there was net bank debt of £22.8m (2017: £19.3m).
The results come before the group acquired the11-site-strong London gastropub and cafe-bar chain, Food & Fuel Ltd for £14.9m. Food & Fuel was set up in June 2006 when Karen Jones, the former chief executive of Spirit, bought 5 sites from Punch Taverns.
Strategic highlights
• Continued improvements to the customer proposition in the Leisure business:
- further progress to increase competitiveness of our brands;
- optimising digital channels; and
- developing new 'off-trade' channels.
• Pubs business outperforming the market and accelerated growth on track:
- organic pipeline further strengthened; and expansion accelerated through complementary acquisitions.
• Concessions sales outpacing growth in passengers. Further success in winning new space as well as renewing existing space.
• Progressing well on cost efficiencies.
Current trading and outlook
• Good momentum post the end of the World Cup with like-for-like sales up 2.4% for the six weeks to 26 August 2018.
• Post period acquisition of Food & Fuel Ltd consisting of 11 premium leasehold pubs in affluent London locations for £14.9m.
• The firm expects to deliver an adjusted PBT outcome for the full year broadly in-line with current market expectations given the impact of adverse weather and the World Cup.
Andy McCue, Chief Executive Officer, commented, “Over the last six months we have delivered against our strategy, creating a more competitive and balanced business, more closely aligned to the growth segments of our market.
'The turnaround of our Leisure division continues to plan and shows further progress. This was despite the headwinds facing the sector as a whole and the adverse effects of extreme weather and the World Cup.
'Meanwhile our Pubs and Concessions businesses have traded strongly, with both businesses expected to deliver significant total sales growth this year. Our recent acquisition of Food & Fuel Ltd will further accelerate our growth at the premium end of the pub market.'
McCue continued, 'We remain focused on developing our offering to meet consumers’ evolving demands and behaviours. Over the last six months we have rolled out delivery and ‘Click-and-Collect’ across most of our Leisure estate and successfully trialled two delivery-only brands, ‘Burger Burger’ and ‘Kick-Ass Burrito’, both of which have been well received.
'Following a positive like-for-like sales performance in recent weeks, we remain on track to deliver an adjusted PBT outcome broadly in line with current market expectations for the full year.”