Frankie and Benny's owner looks to exit sites after hefty loss
The Restaurant Group said it is planning to leave a number of Chiquito and Frankie & Benny's locations to stabilise its long-term future after posting sizeable losses.
The group, which also owns Wagamama, posted an £87.7m pre-tax loss in the six months to June 30, falling from a £12.2m profit in the previous year, as it was weighed down by impairment charges related to its leisure estate.
The dining business said it has earmarked 42 sites which it plans to exit, in addition to 76 Frankie & Benny's sites it identified earlier this year.
These will not be immediate closures but will largely involve allowing leases to run out at "unattractive" current locations, the group said.
It added that it is "mindful" of the challenging headwinds currently facing the casual dining sector and is also planning ahead with the "uncertainties" created by a no-deal Brexit in mind.
Like-for-like sales for the period rose by 4%, the company said, as total sales surged on the back of its £559m acquisition of Wagamama in October 2018.
Wagamama drove the company to a 58% increase in total sales to £515.9m for the period.
The group reported a 0.2% rise in like-for-like sales for the past six weeks but said strong performances in the growing parts of its business were offset by decline in the leisure arm, which includes the Frankie & Benny's and Chiquito brands.
Half-year sales for the leisure division "marginally declined" as it was dented by comparisons against a strong 2018 driven by weather and the men's football World Cup.
Debbie Hewitt, non-executive chairman of The Restaurant Group, said: "We continue to focus on improving our brand offerings and delivering the best possible experience to our customers whilst optimising our leisure business to enhance the overall group performance.
"Prevailing feeling is that uncertainty is having an impact on consumer sentiment but we believe we have a sufficiently strong set of brands.
"Regarding Brexit, the supply of food and labour are the two issues we want clarity on and are working to ensure we are as prepared as possible."
The half-year figures were the first results since former HBOS chief Andy Hornsby was appointed as new chief executive.
He said: "I am delighted to have joined The Restaurant Group in August. Despite the well documented challenges facing the casual dining sector, the group's diversified set of brands provides firm foundations."