The Restaurant Group endures tough start after record year

The Restaurant Group served up a solid set of results for 2015, but like-for-like sales have faltered as the challenging trading conditions from the end of last year continue into 2016 and look set to linger for longer.

Despite total sales having risen 6% in the 10 weeks of trading in 2016, like-for-like sales have been down by 1.5% and the softness is "likely to persist".

The operator of the Frankie & Benny's, Chiquito and Coast to Coast chains said that while its restaurant opening programme will continue to boost total sales, the softening in consumer demand and weaker overall consumer confidence is likely to linger and mean "consistent like-for-like sales increases are likely to be difficult to generate".

Management are taking some mitigating actions but remain confident in the underlying strengths of the business and brands, and provided loose guidance of "profitable progress in 2016 and the years ahead".

For 2015, pre-tax profits rose 11.2% to £86.8m on revenues up 7.9% to £685m in the calendar year.

As indicated in a year-end trading update, like-for-like sales last year were up 1.5%.

With earnings per share up 12.8% to 33.8p and free cash flow up to a total of £97.2m, a final dividend of 10.6p per share gives a total for the year of 17.4p, an increase of 13% on the prior year.

Looking to the coming year, chief executive Danny Breithaupt said: "In common with most consumer businesses we will again have some challenges to face in 2016. However, I am confident that the underlying strengths of our business will enable us to successfully navigate our way through this more challenging external environment."

After opening 44 new sites in 2015 and seeing new sites generating consistently strong returns on investment, the strong pipeline of new sites is expected to deliver a similar number of new restaurants during 2016.

With chairman Alan Jackson stepping down in May, successor Debbie Hewitt will be hoping things have improved by the time she takes the top seat.