The Restaurant Group has reported like-for-like sales in the 52 weeks to 31 December down 3%, with total sales down 1.8%.
The group said it expected to deliver adjusted profit before tax in line with current market expectations and continued to make good progress on its core strategy despite a challenging market.
TRG said its investments in price, food quality and marketing during 2017 drove progressively improved volume momentum in the Leisure business. Initiatives to enhance guest experience, improve effectiveness of labour scheduling and deployment, and exploit new technologies are also on track, the group said.
It stressed that both the Brunning & Price pubs estate and the TRG Concessions business had performed well through the course of the year and the pipeline of new site opportunities continues to grow.
Chief executive Andy McCue said: “In 2017 we made solid progress against our strategic initiatives, resulting in improved volume momentum in our Leisure business, a lower cost base and a more focused growth plan. While the market has softened, we continue to benefit from strong cash generation and a healthy balance sheet.”
The team at Liberum described the results as “as good as can be expected”, adding: “We see the grassroots of the strategy working and take encouragement that the early and decisive action taken by management has seen the estate cull required, costs controlled and price cuts made. These are now bearing fruits with a volume led-recovery taking hold albeit in a difficult market, leading to our FY17E estimates beaten. With relatively flat short term profits forecast, RTN is effectively balancing investments in price and proposition while at the same time improving technology, people and skills. The shares have underperformed the FTSE250 by 37% the past year, trading on 5.8x EV/EBITDA, c12x PE, for a 5% dividend and 7% FCF yield coupled with a very strong balance sheet, we see RTN as offering good value.”