Daily Mail

Wagamama owner rises 10pc as sales bounce back

- by Matt Oliver

ShareS in Frankie & Benny’s owner The Restaurant Group soared amid signs it is finally turning the corner.

The company, which bought noodle chain Wagamama for £559m last year, reported profits of just £13.9m for 2018 – around half the £28.2m it made the previous year.

But shares rose 10.1pc, or 12.8p, to 139.4p after bosses revealed sales were up 2.8pc over the past ten weeks. The stock is still well down on the 540p peak reached four years ago.

Graham Spooner, investment research analyst at The Share Centre, said the figures ‘ have helped provide some muchneeded relief for shareholde­rs’.

But he added: ‘We regard the shares as a high-risk buy for investors who believe the management will be able to counter the current problems in the casual dining sector, and benefit from the Wagamama acquisitio­n. The big question is, can the early signs of improving sales be maintained?’

The firm was hit by one-off costs of £39.2m relating to the Wagamama transactio­n, the closure of 28 sites and onerous store leases. It also snapped up gastropub chain Food & Fuel and four pubs owned by ribble Valley Inns.

Sales declined by 2pc last year as the firm blamed the weather and the football World Cup for keeping customers out of its restaurant­s. It will shut almost a third of its Frankie & Benny’s sites where leases are set to expire.

russ Mould, investment director at broker aJ Bell, warned the future of the firm – which also owns chains Garfunkel’s and Chiquito – ‘now lies heavily on the success of Wagamama’.

The FTSE 100 grew 0.6pc, or 42.85 points, to 7,228.28 yesterday, while the FTSE 250 saw a 1pc uptick, or 207.97 points, to 19,491.03. Shares in luxury housebuild­er

Berkeley Group rose after it played down fears of a housing market slowdown.

The London-focused group said that business from November to February had been in line with previous years, despite concerns about Brexit uncertaint­y.

Its comments came as fears grew about falling transactio­ns and prices in the capital.

But Berkeley said it had a strong balance sheet and it was optimistic about sales in the South east.

Berkeley said: ‘While very mindful of the potential for short-term market dislocatio­ns from the current political backdrop, we remain steadfast in our belief in the longterm resilience and attraction of our markets of London, Birmingham and the South east.’

Its shares rose 1.9p, or 74p, to 3981p after the update.

Profits at Wetherspoo­n’s tumbled in the first half of the year as rising sales failed to cancel out an increase in costs. The pub group’s pre-tax profits in the six months to January 27 fell 18.9pc to £50.3m as costs rocketed, especially labour, which increased by about £33m.

however, revenue rose 7.1pc to £889.6m and like-for-like sales were up 6.3pc in the period.

Chairman Tim Martin warned that costs would continue to rise in the second half.

he said: ‘as previously indicated, costs in the second half of the year will be higher than those of the same period last year.

‘The company anticipate­s an unchanged trading outcome for the current financial year.’

he added that, in the six weeks to March 10, like-for-like sales increased by 9.6pc and total revenue jumped 10.9pc, helped by good weather. Shares rose 2.8pc, or 36p, to 1328p.

Shipping company Clarksons bobbed higher after chairman Bill Thomas and non- executive director Peter Backhouse bought shares. The stock rose 13pc, or 300p, to 2610p.

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