Food chain lifts profits target

The owner of Chiquito and Frankie & Benny’s has bounced back from a poor weather-hit December to upgrade its full year profit expectations.

The Restaurant Group, which also owns Garfunkel’s, said like-for-like sales in the 53 weeks to January 2 dropped by 1% after freezing temperatures and snowfall prevented customers from eating at its restaurants in the final quarter.

Analysts said this equated to a decline of 8% over November and December and meant the snow cost the chain an estimated £5 million to £6 million in sales.

Despite the disruption the company expects to deliver full year profits ahead of the current market consensus of £55.4 million for the 2010/11 financial year.

The group, which runs most of its 380 restaurants from leisure parks, partly relies on the performance of cinemas nearby as movie-goers sit down for a meal before watching the film. Last week, Cineworld warned the adverse weather had a negative impact on box office and retail revenues.

Chief executive Andrew Page said he had noted the drop in attendance at cinemas over the festive season, but said a strong performance from the group’s new restaurants had helped lift profits for the full year.

Mr Page said customers still ate at its restaurants without combining the trip with a movie, adding: “Trade bounced back as soon as the weather abated.”

The company has had a turbulent year after the volcanic ash crisis hit sales in the 40 restaurants it owns in airports. This was compounded by the World Cup in June and July as customers either stayed at home or ate in pubs showing the tournament.

Despite this and recent woes caused by the weather, new restaurant openings and a strong film line-up at cinemas have lifted profitability.

The company said new openings in the period were up on the previous year, with 24 new restaurants opened in 2010. The group hopes to open 22 to 27 new restaurants this year.