A soft start to the second half sees Restaurant Group (RTN) slip 1.8% to 666p this morning, but its performance is expected to pick up in the fourth quarter when several blockbusters films are released.
The Frankie & Benny’s and Chiquito owner grew pre-tax profit by 10% to £36.9 million in the first six months of the year and grew like-for-like sales by 2.5%, in line with market expectations.
Like-for-like sales over the last eight weeks have slowed to 0.4% but this was anticipated as the group was up against a tough 6.8% rise the previous year.
Restaurant Group opened 12 new restaurants in the first half and expects to open a total of 43 to 48 in the full year.
Chief executive Danny Breithaupt says he’s confident for the full year given the strong pipeline of new sites, improving UK economy and exciting cinema release schedule. Half the group’s revenue is derived from restaurants near cinemas.
Cinema-goers have the next instalments of the James Bond, Hunger Games and Star Wars series to look forward to in October, November and December.
N+1 Singer forecasts full year pre-tax profit growth of 12% and says the trigger point for upgrades is likely to be the third quarter update in November. The analyst has a target price of 721p, implying upside of 8.3%.