The Restaurant Group PLC (LON:RTN) shares jumped 10% higher on Wednesday as the Frankie & Benny's and Chiquito brands owner maintained its dividend, reflecting confidence in the delivery of its strategic plan, even though 2017 adjusted profit and sales fell.
The FTSE 250-listed firm reported an adjusted pretax profit of £56.7m for the 52 weeks to 31 December 2017, down from £77.1m the year before, as its revenue fell by 4.4% to £679.3mln from £710.7mln a year earlier.
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The group - which operates 498 restaurants and pub restaurants throughout the UK - saw its like for-like sales fall by 3% in 2017, albeit representing an improvement on the decline in 2016.
Despite the drop in profit, however, Restaurant Group is paying a final dividend of 10.60p per share, giving a total payout for 2017 of 17.40p, unchanged on the previous year which it said reflects "the Board's confidence in delivery of the plan."
The Restaurant Group said proposition enhancements in its Frankie & Benny’s brand are driving improving volume momentum, while its pubs business continues to outperform the market. Meanwhile, the group's cost reduction programme of £10mln is delivered ahead of plan and enables reinvestment in leisure business.
2017 a transitional year
Andy McCue, the firm's chief executive officer, said: “As expected, 2017 was a transitional year for the Group, with significant investments made in price and proposition within our Leisure business, which is improving volume at the moment.”
He added: "We start 2018 with a significantly more competitive offering in our Leisure business, a strengthened pipeline of growth opportunities in both our Pubs and Concessions businesses, and a leaner, faster and more focused organisation."
In late morning trading Restaurant Group shares were 12.2% higher at 266.4p