The Restaurant Group (TRG) has reported a 4.5% increase in like-for-like sales for the first 19 weeks of its financial year “reflecting another period of outperformance” and said it was on track to report a very satisfactory first half performance. It said trading for the period has been strong with total sales 11% ahead of the previous year During the period, it opened two new Frankie & Benny's restaurants and one new pub restaurant. It said that these sites are trading well and are set to deliver good returns. In total, the company expects to open between 30 and 35 new restaurants this year, most of which will be in the second half and at least half of these will be Frankie and Benny’s. Looking further forward, it said that its new site pipeline for 2014 and beyond is “better than we have seen for a number of years”. The company said: “The performance of our new Coast to Coast restaurants is particularly pleasing. Coast to Coast is both distinct and scalable and we expect to open a further four to five sites in 2013. The group will open its next Coast to Coast in Highcross, Leicester next month, with further openings lined up in Bolton and Norwich. The group said its balance sheet remains strong and continues to benefit from good cash generation from its operations. Subject to approval at the AGM, the final dividend in respect of the year ended 30 December 2012 of 7.3p per share (making the full year dividend in respect of 2012 a total of 11.8p per share) will be paid on 10 July 2013, this represents a 12% increase on the previous full year’s dividend. The company said: “The group is trading in line with expectations, margins have improved and we are on track to report a very satisfactory first half performance.” Simon French at Panmure Gordon said: “For the 19 weeks to 12 May, The Restaurant Group has reported 4.5% LFL sales growth, 11% total sales growth and improved margins. This is a slightly stronger performance than we anticipated and the group is on track to report a very satisfactory H1 performance. “Management has narrowed its opening guidance for 2013 to 30-35 new restaurant openings (from 28-35) and comments the new site pipeline for 2014 onwards is better than for a number of years. We expect no material change to consensus forecasts on the back of this statement but the strong sales growth and improvement in margins implies the risk is on the upside. The stock trades on a 2013E adjusted EV/EBITDAR of 9.0x and yields 2.7%. We reiterate our Buy recommendation and 560p Target Price, implying c15% potential upside.”