Harvester and Toby Carvery owner Mitchells & Butlers PLC (LON:MAB) served up higher first-half profits and unveiled plans to revamp key sites.
M&B said revenue in the 28 weeks to April 9 fell 1.5% to £1.1bn, although adjusted operating profit rose 2% to £156mln. Pre-tax profits rose to £83mln from £75mln a year ago.
The group, which also owns chains such as All Bar One, O’Neills and Ember Inns, said, however, that it was facing a highly competitive market and real wage inflation.
It said sales had stayed tough in the first half despite higher profits, but a review showed revamped outlets had done better than un-refurbished sites.
M&B has consequently speeded up investment in site refits and conversions, with plans for 300-350 overhauls a year.
The company completed 142 in the first half compared with 97 in the same period last year.
It says it is looking to reduce its 233-strong Harvester chain to a core, all of which will be refitted in the next 18 months.
It also plans to convert many of its Crown Carveries to the Pizza & Carvery concept.
Chief executive Phil Urban said: “Following a challenging trading period with subdued sales but margin growth, our sales performance in recent weeks has been more encouraging.
“We are cognisant of the challenge of future wage cost increases but will continue to execute our plans at pace to build on this performance.”
Shares in the group rose 8.4p, or 3%, to 285.6p in mid-morning London trading.
Panmure Gordon noted that the new initiatives will cost £180m capex this year and £200m next and aim to target 300-350 conversions a year (1,775 in total). Pricing, procurement and culture initiatives are also in play.
"This hits the right strategic notes but will take time," the broker said.