Cheap menus leave bad taste at restaurant chain

RestauRant Group slid down the FTSE250 after a broker said the new menu at its Frankie & Benny’s chain of restaurants could slash profits.

Following a visit to the chain’s Milton Keynes restaurant, analysts at Peel Hunt cut their profit forecasts for the firm by 8pc and retained their ‘hold’ rating.

According to the broker, the number of main dishes priced under £10 rose from five to 22, with prices on average falling 9.5pc. With burger prices falling by more than 12pc and starters by nearly a quarter, Peel Hunt called the move a ‘radical step’.

Restaurant Group said it now expects profits to fall by £22m this year, with £13m of these losses resulting from Frankie & Benny’s lower food prices.

The firm has been battling increased competition from pubs and a drop in visitors to retail shopping parks, where many of its outlets are located.

Last month, finance chief Barry Nightingale left the firm less than a year after he was brought in to turn around the business. Shares fell 4pc, or 14p, to 335.5p.

The Ftse 100 rose 0.2pc, or 13.57 points, to 7248.1.

G4s, the world’s biggest security firm, guarded its spot at the top of the FTSE 250 throughout the day, after reporting a near 10pc jump in revenues over the first quarter.

The firm saw double-digit growth in developed markets and said it remains confident it can grow 4pc to 6pc this year.

Despite flat growth in emerging markets, it said ‘momentum’ has continued from last year. Shares rose 3.4pc, or 10.6p, to 325.1p.

Sheilas’ Wheels owner esure hit an all-time high after reporting a 24pc rise in written premiums over the first quarter.

The insurer raked in £187.4m of written premiums, up from £151m in the same period last year. It saw strong growth in its motor insurance market, where premiums grew 29pc year-on-year. But its home insurance division struggled, with premiums falling 4.5pc.

Chief executive Stuart Vann said the division does not currently provide opportunities for profitable growth. Shares were up 3pc, or 7.7p, at 266.6p.

Gem Diamonds sparkled after it unearthed a high-quality, undamaged 80-carat diamond from its mine in Lesotho, Africa. Last month it recovered a 114-carat diamond from another mine. Shares rose 5.4pc, or 4.5p, to 88.5p. Online estate agent Purplebricks posted decent results despite the ongoing investigation by the Advertising Standards Authority. The firm announced that instructions had grown 83pc in the second half of the year to April 30, although it did not list the number of houses it had actually sold.

The company, which has been called the ‘Uber of real estate’, uses self-employed estate agents – who do not work on commission – to offer homeowners a flat fee regardless of whether their house sells or not.

The Advertising Standards Authority is investigating the firm after the Charter For Independent Estate And Letting Agents complained about its marketing.

Purplebricks is yet to make a profit, although it expects to report one in its final results on June 29.

It also announced that chief financial officer Neil Cartwright will step down due to ill health.

He will be replaced by James Davies, who held the same role at William Hill. Shares rose 7pc, or 22.25p, to 340.25p.