Business Irish

Wednesday 24 July 2019

Former Paddy Power CEO McCue overhauling restaurant chain

Former Paddy Power boss Andy McCue
Former Paddy Power boss Andy McCue

Ravender Sembhy

The struggling owner of the Frankie & Benny's restaurant chain is expected to report another fall in profits next week.

Chief executive Andy McCue - formerly CEO of Paddy Power - is expected to outline the progress of turnaround efforts.

A consensus of City analysts forecast that half-year pre-tax profit at the Restaurant Group will fall over 30pc to £25.2m (€27.2m) as warm June weather and poor cinema attendance look set to have dented footfall.

Because of their locations, sales at the group's restaurants, which also include Garfunkel's and Chiquito, are closely aligned to cinema attendance. The chain has three resturants in Northern Ireland.

Tim Barrett, analyst at Numis, said: "A weak film slate and record June weather were unfavourable for cinema attendance, meaning it seems reasonable to expect a small, temporary moderation in footfall." In its last trading update, the Restaurant Group said like-for-like sales fell 1.8pc in the 20 weeks to May 21, with total sales declining 1.5pc.

However, the figures marked an improvement on the fourth quarter, which saw like-for-like sales drop 5.9pc.

For the half year, Numis is pencilling in a 2.5pc dip in sales, with the performance of the firm's pubs business likely to have been boosted by the warm weather and mitigating a decline in restaurants.

As part of Mr McCue's turnaround, the company has been closing under-performing restaurants and rejigging menus.

It comes after the Restaurant Group admitted it had lost value-conscious customers at Frankie & Benny's after significant price hikes, with the firm pledging to "look at the pricing architecture of the menu" and "reinvigorate the value offer" in a bid to attract more families to its outlets.

Irish Independent

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