Frankie & Benny's Owner Issues Profit Warning

Shares (Berlin: DI6.BE - news) in the owner of the Frankie & Benny's restaurant chain lost more than a quarter of their value on Friday after it issued a profit warning.

Restaurant Group (Other OTC: RSTGF - news) said it had endured a further deterioration in sales as it battles intense competition and the effects of more shoppers buying goods online rather than on the high street.

It (Other OTC: ITGL - news) reported that in the 17 weeks to 24 April, total sales were up 4.7% but like-for-like sales - a measure which reflects trading at outlets open for a year or more - were 2.7% lower.

The company, which is also behind the Chiquito and Garfunkel's brands, forecast like-for-like sales to be down by between 2.5% and 5% for its full year, with profits in the range of £74m-£80m.

It made profits of almost £87m in its last financial year.

Restaurant Group, which has 500 outlets - many of them at Leisure locations such as cinemas and bowling alleys - also confirmed it had parted company with its chief financial officer.

Chief executive Danny Breithaupt said: "We are focused in the short term on the operational levers that will improve our trading performance.

"In the medium term, we are reviewing the core strategic assumptions that differentiate our operating model to ensure that we optimise returns for shareholders.

"In spite of the current like for like challenges, overall returns remain strong, the business continues to be cash generative, and there is a strong core business to build on."

The company's turnaround efforts include changes to menus.

Its share price lost 26% of its value during Friday trading and has more than halved since the start of the year.