Broker snap: Restaurant Group shows resilience

12th Jan 2011 10:39

Charles Stanley Securities advises its clients to add more shares in The Restaurant Group (TRG) to their plate after the company announced that profits should be just ahead of market consensus, showing "resilience despite a tough year."Analyst James Dawson says that a drift-off in 2010 like-for-like sales performance to -1% seems understandable given the "extreme weather conditions during December set against the backdrop of a nervous consumer."The group, which owns the Garfunkel's, Chiquito and Frankie and Benny's chains, confirmed that 24 new sites were opened in the year, and reaffirmed the target opening range of 22-27 for 2011.Charles Stanley says that the group has consistently remained cautious with its debt remains position, and expects TRG will report an improved net debt position year-on-year in the final results as positive cash flows continue even post the expansionary capital expenditure.The broker says the trading update provides reassurance and its near-term outlook remains unchanged. An 'add' rating and target price of 330p are retained.