Restaurant Group profit rises on new openings

Restaurant and pub operator Restaurant Group saw annual profit rise, as new restaurant openings drove an increase in revenue.

The group, which owns restaurant chains Frankie & Benny's, Chiquito, Coast to Coast and Garfunkel's, said profit in 2014 rose 7.4% to £78.1m, driven by a 10% increase in revenue to £635m.

The FTSE 250 group, which plans to open between 42 and 50 new sites this year, said sales were boosted by the opening of 40 new restaurants in 2014, with like-for-like sales up 2.8%.

However, new openings and and wage cost inflation weighed on the group's profit margin, which fell from 12.9% to 12.7%.

"The group has delivered another strong set of results in 2014 with growth in turnover, profits and cash flow," said group chief executive Danny Breithaupt.

The company hiked its dividend by 10% to 15.4p and said it had started 2015 strongly, with total sales up 9.5% and like-for-like sales up 2.5% for the eight weeks to 22 February.

Broker Oriel reiterated its 'hold' rating on the stock, saying Restaurant Group remained well placed to sustain its record earnings growth.

Restaurant Group shares were up 0.14% to 730p.