February 26, 2020 / 8:00 AM / a month ago

Restaurant Group to close some stores in leisure division, suspend dividend

(Reuters) - Restaurant Group (RTN.L), the owner of the Frankie & Benny’s chain, said on Wednesday it would shut stores in its leisure business and temporarily suspend its dividend.

The company, which operates restaurants and pubs in the UK under brands such as Chiquito and Coast To Coast, said it would reduce the number of stores to 260-275 by the end of 2021, from 350 currently.

Shares in Restaurant Group fell 3.4% to 113.5 pence at 0814 GMT.

The company has been struggling with falling sales in its leisure business that have also offset robust performance in its Wagamama, Concessions and Pubs units.

“This will allow us to continue investing in our three high growth businesses, whilst facilitating an acceleration of our Leisure estate rationalisation and reducing our net debt”, Restaurant Group said.

The company reported statutory pretax loss of 37.3 million pounds for the full year ended Dec. 29, compared with a pretax profit of 13.9 million pounds last year.

Restaurant Group reported a 2.7% rise in its annual like-for-like sales, with total sales surging 56.4% to 1.07 billion pounds.

The company said trading for the first six weeks of 2020 was encouraging with like-for-like sales up 5.3%.

Reporting by Samantha Machado in Bengaluru; Editing by Bernard Orr

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