You are here: Home - Investing - Experienced Investor - News -

Stock of the week: Restaurant Group

0
Written by: YourMoney.com
02/05/2017
Helal Miah, investment research analyst at The Share Centre, picks Chiquito and Frankie & Benny’s owner, Restaurant Group, as stock of the week.

We are taking a contrarian approach and have picked Restaurant Group which has had a difficult few years given competition, badly judged price hikes and the rise in minimum wages.

With over 500 restaurants and pubs to its name, Restaurant Group strives to double in size over the next eight to 10 years. The positioning of its restaurants, including Garfunkel’s and Coast to Coast, has been a key to its success, as they are often located in out of town, retail and entertainment complexes.

The company, which sells 43 million meals each year, also operates a concessions business which trades over 60 outlets across more than 30 brands, primarily in the UK. Interested investors should appreciate that shareholders benefit from a 25% discount at the restaurants.

Following the appointment of the experienced CEO, Andy McCue in 2016 and the completion of the firm’s strategic review on the business, investors will be hoping that the company’s fortunes will improve. Within this review, management has focused on the competitiveness of its brands, an improved customer experience, growing the concessions business and creating a leaner and more focused organisation. Investors should note that, encouragingly, management hopes the changes being made will start to show through by the year’s end.

The speed of the bad news over the first half of 2016 caught us and many in the market out. After the latest update, we would suggest the shares as a higher risk ‘buy’ for contrarian investors only, who either see its strong brands as a tempting proposition to a predator or to enable management to address the recent problems.

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Are you a first-time buyer looking for a mortgage?

Look no further, get the help you need by searching for your perfect mortgage

Which ISA is right for you? A round up of the six products available in 2017

From cash to innovative finance to lifetime, here's our guide to the ISA products available to savers this yea...

Guide to buy-to-let tax changes

In late 2015, former Chancellor George Osborne announced a range of  tax measures aimed at landlords, which t...

A guide to switching energy provider

All you need to know about switching from one energy supplier to another.

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Five fund tips for a 0.25% interest rate environment

With interest rates stuck at a record low 0.25% and expectations rates could fall to close to zero, here are ...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

Investing your money

Alliance Trust Plc gives you smart insight into how to invest your money

Money Tips of the Week

Read previous post:
2317956-pension-investment-lp-db-dc
More uncertainty as government stalls response to state pension age increase

The upcoming general election call means the government has stalled on publishing its deadlined response to recommendations for the state...

Close