Scores of jobs to go at Restaurant Group after £40m loss posted
Around 80 jobs are set to be axed after the struggling owner of Frankie & Benny's swung to a full-year loss.
The Restaurant Group posted a pre-tax loss of £40 million in the year to January 1 after being stung with a £117 million exceptional charge linked to restructuring efforts.
In August, the firm, which is also behind Garfunkel's, said it would shut 33 under-performing sites as part of a strategic review in a move that affected around 1,000 staff.
The group will now close an additional eight restaurants this year, with around 80 jobs set to go.
Boss Andy McCue said he is "pursuing a new and focused plan to turn around and grow the business".
This will include finding efficiency savings including "reducing overheads, extracting further purchasing benefits from our scale and reducing the number of people we employ.
"This will involve some difficult decisions but we are confident our colleagues will embrace being part of a more efficient organisation."
Revenue was up 3.7% to £710.7 million and, stripping out the exceptional charge, pre-tax profits came in at £77.1 million.
Like-for-like sales fell 3.9% over the period and Mr McCue, who was drafted in to the role last year, said the turnaround will take time.
"It will take time to effect the scale of change required and for customers to respond but I'm proud of how our colleagues are rising to the challenge," he said.
The Restaurant Group operates 488 restaurants and pubs and it also behind Chiquito, Coast To Coast and Brunning & Price.
In January the company admitted it has lost value-conscious customers at Frankie & Benny's after significant price hikes and the firm pledged to "look at the pricing architecture of the menu" and "reinvigorate the value offer" in a bid to attract more families to its outlets.
Investors warmed to Mr McCue's comments, sending shares up over 9% in morning trading.
Tim Barrett at Numis said: "The new CEO's strategy involves an improved value proposition in the leisure brands, better service execution, growing the pubs/concessions divisions, building a leaner organisation.
"This should add incremental profit from full year 2019 but will be reinvested into price/marketing in the short term."
"We are encouraged by the ambitious restructuring and now factor in the additional eight site closures which adds £3 million to profit before tax as a result of lower depreciation on the sites. This results in a 4% upgrade to full year 2017 estimates."