Restaurant Group reports 'very encouraging' trading

The Restaurant Group reported "very encouraging" trading for the first four months of the year, putting it ahead of schedule to achieve its medium-term targets for increasing its margins and reducing its debt.

The pub and restaurant owner also said that it was making "good progress" on its cost saving initiatives, having already delivered approximately £5m of such savings on an annualised basis.

For the four weeks to 30 April, the company announced that like-for-like sales at its Wagamama franchise were ahead by 9%, Pub sales up by 8%, and sales at Concessions 20% higher.

Sales at Concession were benefitting from the easy comparables with the same period one year before, when air passenger volumes were impacted by Omicron.

Nevertheless, year-to-date LFL sales in that business arm were 5% higher than in 2019 and by 10% when compared to the second quarter of 2019.

LFL sales at its Leisure arm however were off by 1%, although that was better than the 4% drop seen over the 13 weeks ending on 2 April.

In a trading update, Restaurant Group added that it would accelerate its previously announced rationalisation plan for the Leisure unit which would bolster its cash generation in the back half of 2019.

"Favourable" dynamics in its UK property market meanwhile were providing more opportunities for new Wagamama sites on "attractive" rent terms.

That had led to the decision to accelerate the pace of new openings of Wagamama restaurants in FY 2024 from five to eight.

The Board added that it was continuing to evaluate its long-term strategic options.