Reuters: Hot Stocks: UPDATE 1-Restaurant Group's sales growing, shares touch life-high

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UPDATE 1-Restaurant Group's sales growing, shares touch life-high Feb 27th 2013, 10:48 Wed Feb 27, 2013 5:48am EST * Comparable sales up 6.5 pct in 8 weeks to Feb. 24 * Company expects growth to continue for rest of 2013 * 2012 adjusted pretax profit up 7 pct to 64.6 mln stg * 2012 revenue up 9 pct to 533 mln stg * Shares touch life-high of 412.05 pence (Adds CEO & analysts' comments, details, background; updates share move) By Richa Naidu Feb 26 (Reuters) - Britain's Restaurant Group Plc, which runs the Frankie & Benny's chain, said comparable sales were up 6.5 percent so far this year and it expected the growth to continue for the rest of the year. The company's shares touched a new life-high of 412.05 pence on the London Stock Exchange on Wednesday morning. An increase in footfall in the eight weeks to Feb. 24 and a rise in average spend drove sales growth, said the owner of popular British eatery Garfunkel's. Comparable sales growth was better in February than in January, Chief Executive Andrew Page told Reuters. "The spend growth divides equally between people trading up a little bit, perhaps having a pudding or a coffee, and some price increases that we were able to put through last year." Page said he expected the food costs to keep increasing, some of which the company may pass on to customers. Restaurant Group sales would have to grow at 4 to 5 percent this year to keep profits unchanged, primarily due to food cost inflation, Panmure analyst Simon French said in a note. Liberum Capital analyst Patrick Coffey said in a note that he expected a gradual slowdown in comparative sales to average at around 2 percent growth for the whole year. Restaurant Group, which runs more than 400 restaurants and pubs in the UK, plans to open 28 to 35 more outlets in 2013. The company's 2012 adjusted pretax profit rose 7 percent to 64.6 million pounds ($97.8 million). Revenue increased 9 percent to 533 million pounds in 2012. Excluding new restaurants, revenue grew 4.5 percent. Burger and red-meat sales were not affected by the recent horsemeat scandal in Europe, Page said. The FTSE-250 company's shares were trading up 4.9 percent at 408 pence at 1033 GMT on the London Stock Exchange. ($1 = 0.66 British pounds) (Reporting By Richa Naidu in Bangalore; Editing by Joyjeet Das) Link this Share this Digg this Email Reprints

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