Volcano chaos casts a cloud over Restaurant Group's profits

Frankie & Benny's owner Restaurant Group was counting the cost of the flight disruption caused by Iceland's volcano as it forecast a profits hit.

Volcanic ash caused five days of pain for the firm, as the flight shutdown led to a more than 90 per cent sales drop for its airports business.

Group like-for-like sales were consequently just 0.5 per cent ahead in the 18 weeks to May 2, compared to estimates of 1.5 per cent without the ash closures.

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Restaurant Group estimated the shutdowns would reduce profits in its concessions division by about 500,000.

Restaurant Group – whose portfolio also includes Garfunkel's and Chiquito – said performance in its concessions division was now returning to normal, although recent flight suspensions amid a new ash cloud in Scotland and Ireland have had a small impact.

The chain has 55 concessions, of which 47 are at eight UK airports.

It also has 189 Frankie & Benny's, a 64-strong Chiquito chain, 23 Garfunkel's and 43 pub restaurants largely under the Brunning & Price brand.

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Restaurant Group said it opened seven new branches so far this year, including three concession outlets at Bournemouth Airport.

All recent openings were trading well and the firm plans to open a total of 15 to 25 new outlets during 2010.

"Despite some difficult external factors adversely impacting on our business during the first four months of the year we are encouraged by the positive start we have made to 2010," the firm said.

"Our unique market positioning, strong brands and motivated teams continue to benefit The Restaurant Group and we are confident of reporting further profitable progress in our upcoming interim results."

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