With The Restaurant Group’s AGM on Thursday, leading analyst Doug Jack at Numis has said that he believes like-for-like sales, which rose by 2.5% during the first eight weeks, should have at least maintained this momentum in March and April.

He said: “In our view, LFL sales momentum should at least have been maintained even though the restaurant Peach Tracker fell by 0.4% in March. In March, cinema attendance rose 11.4% and London airport passenger volumes rose 7.8%. In April, weekend cinema box office revenue rose 43%. In our view, there should be upgrade risk to forecasts as this year progresses.

“For the full year, we assume LFL sales rise 3.0%, supported by a strong cinema release schedule and easy admission comps in Q2-4. In 2014, May-December cinema admissions were 6.1% below 2013’s level and 10.2% below 2012’s.”

Jack forecasts margins rising by 15bps in 2015E, with lower food cost inflation (under 1%) and increasing expansion offsetting higher labour cost inflation (3-4%).

He said: “Margins should benefit if LFL sales volumes are higher than expected (menu prices rose by less than 1% in October), with each 1% of additional LFL sales worth potentially a 6% increase in PBT and earnings.

“We forecast 45 new restaurants in 2015E (vs 40 in 2014), comprising: 17 Frankie & Benny’s (F&B), nine Coast to Coast, nine Chiquito, four pub restaurants and six Concessions. We believe the pick-up in Chiquito’s expansion rate reflects its new-design sites trading as well as F&B as well as an acceleration in cinema multiplex expansion in 2015E.

“We believe there is upgrade risk to our 2015E forecasts (PBT: £86.3m; consensus £88.2m), which anticipate 11% earnings growth, based on 3% LFL sales, 15bps margin growth and no change in debt. We expect RTN to be a beneficiary of rising consumer disposable income and a strong cinema film slate in both 2015E and 2016E.”