The Restaurant Group (LON:RTN) posted a statutory loss before tax of £87.7 million on Tuesday in its interim results, sending shares crashing.
The British restaurant chain said it would close at least 124 sites of its Frankie & Benny’s and Chiquito brands over the next six years.
Like-for-like sales were up 4%, with total sales up 58.2% to £515.9 million, the company highlighted in its results.
Like-for-like sales growth was driven by the market outperformance of Wagamama and its Concessions and Pubs businesses, it added.
“Our Leisure business delivered a marginal decline in like-for-like sales despite benefitting from the weaker comparatives following last year’s extreme weather and football World Cup,” Debbie Hewitt MBE, Non-executive Chairman, commented in the results.
Its Leisure sites include brands such as Frankie & Benny’s, Chiquito and Coast-to-Coast.
In the first eight months of the year, 16 sites were closed – 10 Frankie & Benny’s, four Chiquito, one Coast to Coast and one Garfunkel.
“We are mindful of the headwinds in the casual dining sector and the meaningful uncertainties created by the potential of a ‘no-deal Brexit’ and are planning with this in mind. However, our business is now better diversified and purposefully positioned to benefit from multiple opportunities for growth,” the Non-executive Chairman continued.
The Restaurant Group’s warning of the casual dining sector comes just a week after Boris Johnson asked the Queen to suspend parliament, limiting MPs’ ability of blocking a no-deal departure from the European Union.
The uncertainties surrounding the nation’s departure from the European Union were also cited on Tuesday by the BRC and KPMG in their report on retail sales, which “flatlined” in August.
Additionally, the Restaurant Group welcomed Andy Hornby in its results as its new CEO, who said that “despite the well documented challenges facing the casual dining sector, the Group’s diversified set of brands provides firm foundations.”
Shares in the Restaurant Group plc (LON:RTN) were trading at -12.58% as of 12:27 BST Tuesday.
