Restaurant Group shares decline as it dips into the red

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Restaurant Group shares decline as it dips into the red
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The price of shares in FTSE 250 hospitality business Restaurant Group (LON:RTN) fell by 7.91% to 108.20p (as of 14:45 GMT) as it booked a statutory pre-tax loss for the year ended 29th December. The Wagamama purchase has performed well and is continuing to generate substantial sales growth, but the company’s leisure brands continued to decline.

CEO Andy Hornby commented: “Having joined the business in August last year I am particularly pleased with the continued and significant progress made following the acquisition of Wagamama and the integration of the business into the Group, which has transformed the Group’s growth trajectory and momentum.

“Our three growth businesses of Wagamama, Concessions and Pubs are all out-performing their respective markets and have clear potential for further growth. I am also acutely aware of the challenges facing our Leisure business and the wider casual dining sector.

“It is therefore clear that our strategic priorities need to evolve in order to maximise shareholder value in the medium term. Following extensive review we have defined three clear strategic priorities for the next two years:

· Grow our Wagamama, Concessions and Pubs businesses;

· Rationalise our Leisure business; and

· Accelerate our deleveraging profile

“In order to support these strategic priorities, the Board has taken the decision to temporarily suspend the dividend. This will allow us to continue investing in our three high growth businesses, whilst facilitating an acceleration of our Leisure estate rationalisation and reducing our net debt.

“We have made an encouraging start to the new financial year with like-for-like sales up 5.3% for the first six weeks of 2020“.

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