City Centre Restaurants is to continue its aggressive drive into the leisure park market after the performance of its Frankie & Benny's outlets helped it to a pre-tax profit hike of 8% last year.
Overall the company reported a pre-tax profit for 2002 of £16.8m, compared with £15.6m in 2001, on a turnover that fell slightly to £216m, £12m down on the year before. The fall in turnover reflected the sale of the Deep Pan Pizza and Wok Wok businesses.
Frankie & Benny's is now the brand leader in the cinema park casual dining market. City Centre plans to open up to 15 more outlets this year following the success of its eight new ones in 2002. This will take the total to 90 sites.
Frankie & Benny's is the larger of City Centre's leisure park outlets, with a turnover last year of £64.6m and like-for-like sales up 8.8%. The other, Chiquito, did £27.7m of business with like-for-like sales up 3.3%. New management has been brought in to improve service standards and product offering in the 26-unit brand. Overall, the leisure parks sector delivered £17.5m profit on a total turnover of £92.3m.
The group's high-street restaurants were badly hit in the aftermath of the attack on New York's twin towers when fewer tourists visited London. Visitor numbers recovered in the second half of last year with the 29-unit Garfunkel's turning over £24.8m, just short of the previous year's performance. Including Caffe Uno, the high-street restaurants business turned over £84.4m of business, with operating margins at 14.2%.
At Est Est Est, the group's Italian restaurant chain, like-for-like sales dropped 3.8% on turnover of £19.5m. The brand is undergoing a refurbishment, which was beginning to have positive effects, said chief executive Andrew Guy.
The opening of three new units and a strong second half also improved the fortunes of City Centre's airport concessions business, which is now 27 units strong. More units are likely to be opened this year.
Executive chairman Alan Jackson said: "Against a backdrop of very challenging conditions, the strategy we have put in place is working strongly as a result of our management team and the supreme efforts of all our staff, who are really motivated."
Nigel Popham, drink and leisure sector analyst at Teather & Greenwood, said the results were encouraging. He praised Jackson, who joined the company in 2001, for giving the group strategic direction, and said others within the company had implemented it successfully. But he warned: "In the mid-term, anything to do with airports is of concern because of the war."
The company says 2003 has started well, with a 6% increase in like-for-like sales during the first two months' trading.
* Developer Land Securities is to launch a £75m leisure scheme in the heart of Newcastle upon Tyne, called the Gate. The restaurant, bar and cinema complex will open from 10am to 3am daily.
The business lowdown
Turnover: down 5% at £216m
Pre-tax profits: up 8% at £16.8m
* Up to 15 new Frankie & Benny's restaurants are planned this year, together with three more airport concession units.
* Like-for-like sales up 6% in the first two months of this year.
* Leisure parks delivering strong results and growth.