Frankie & Benny’s owner bulks up following Wagamama deal

Frankie & Benny’s owner Restaurant Group has hailed a “pivotal” year despite a drop in core sales, as it eyes growth opportunities following its multi-million-pound takeover of Wagamama.

Frankie & Bennys is one of the groups' core brands: Picture: Anna Gowthorpe/PA Wire
Frankie & Bennys is one of the groups' core brands: Picture: Anna Gowthorpe/PA Wire

Like-for-like sales, which excludes new openings and acquisitions, fell by 2 per cent in the 52 weeks to 30 December.

But the group said it had delivered comparable growth in the latter half of the year, since the World Cup.

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Meanwhile, total sales, which include a record 21 new pubs and 21 new concessions as well as one week of trade from Wagamama, climbed 1 per cent.

The £559 million Wagamama deal formally completed on 24 December, bringing almost 200 branches into the Restaurant Group’s portfolio.

Plans to integrate the business include converting some existing sites which currently operate under other brands into Wagamama branches.

Chief executive Andy McCue said the company is now poised for growth.

“2018 has been a pivotal year for the group in which we have opened a record number of new sites in both our pubs and concessions businesses as well as acquiring an extremely high-quality business in Wagamama,” he said.

“The enlarged business is now orientated strongly towards growth with a number of exciting opportunities ahead. We are focused on executing on our multi-pronged growth strategy and plans for the site conversions and cost synergies are progressing well.”

Profits are expected to be in line with market expectations.

Paul Hickman, an analyst at Edison Investment Research, noted: “Restaurant Group, still reporting its results before the inclusion of Wagamama, continues to see underlying growth. Like-for-like sales for the whole 52 weeks to the end of December were down 2 per cent, slightly better than the decline of 2.2 per cent after 42 weeks to the end of October.

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“However, the company says it has been in like-for-like sales growth since the World Cup. Growth was led by the pubs business which beat lacklustre trading in the pub restaurant sector, seen for instance in Marston’s trading statement yesterday.

“The concessions business, largely in airports, has also traded strongly. That leaves the leisure business, typified by Frankie & Benny’s, which has seen improved (though implicitly negative) like-for-like sales momentum through 2018, with a downward lurch in December due to weaker cinema admissions.

“The company has meanwhile been active in estate development with 21 new pubs including acquisitions and the same number of new concessions.

“The Wagamama acquisition, which completed on 24 December, will provide a much-needed performance boost in 2019.”