As shares in PizzaExpress plunged 22.8% to 312.5p yesterday after weak full year results, one industry commentator said the restaurant group's management could be close to buying the business back.
The shares have fallen more than two thirds in value since the start of the year, underperforming the FTSE 100 index by just over 40% and other UK leisure stocks by 50%.
Greg Feehely, the hospitality analyst at Old Mutual Securities, said: "Having fallen from 921p in January we don't think it would have to fall much further at all before management seriously considered buying the business back."
Feehely cut his current year pre-tax forecast to £36m to £37m from £43m, adding that the group needs cash to invest in its older sites, so earlier plans to return as much as £100m to investors in a share buyback would be delayed.
PizzaExpress told investors it had been "surprised" by the encouraging results at Gourmet, a chain of five Californian-style pizza and pasta restaurants acquired this year for £1.4m. If further openings are successful, it could become a third brand, the company said.
However, the wisdom of further diluting the company's core restaurant business was questioned by Feehely, who warned that the current uncertain economic climate was not the best environment for experimentation.
PizzaExpress's chief executive, David Page, said the company would double capital spend this year to £12m to begin to bring its 80 restaurants more than 10 years up to scratch after they turned in "disappointing" like-for-like sales, down 3% for the year to June 30.
The company revealed a 4% fall in like-for-like sales in the fourth quarter yesterday, saying there was no sign of a recovery above the final quarter level, particularly in London.
Each site will cost between £60,000 and £600,000 a time to refit, Page said, and closing the restaurants for the work will cost the group £1m, but at three older restaurants recently refurbished, like-for-like sales have gone up by 10%.
The shares have fallen more than two thirds in value since the start of the year, underperforming the FTSE 100 index by just over 40% and other UK leisure stocks by 50%.
Greg Feehely, the hospitality analyst at Old Mutual Securities, said: "Having fallen from 921p in January we don't think it would have to fall much further at all before management seriously considered buying the business back."
Feehely cut his current year pre-tax forecast to £36m to £37m from £43m, adding that the group needs cash to invest in its older sites, so earlier plans to return as much as £100m to investors in a share buyback would be delayed.
PizzaExpress told investors it had been "surprised" by the encouraging results at Gourmet, a chain of five Californian-style pizza and pasta restaurants acquired this year for £1.4m. If further openings are successful, it could become a third brand, the company said.
However, the wisdom of further diluting the company's core restaurant business was questioned by Feehely, who warned that the current uncertain economic climate was not the best environment for experimentation.
PizzaExpress's chief executive, David Page, said the company would double capital spend this year to £12m to begin to bring its 80 restaurants more than 10 years up to scratch after they turned in "disappointing" like-for-like sales, down 3% for the year to June 30.
The company revealed a 4% fall in like-for-like sales in the fourth quarter yesterday, saying there was no sign of a recovery above the final quarter level, particularly in London.
Each site will cost between £60,000 and £600,000 a time to refit, Page said, and closing the restaurants for the work will cost the group £1m, but at three older restaurants recently refurbished, like-for-like sales have gone up by 10%.
