Restaurant Group serves up increase in pre-tax profits on improved margins

28th Aug 2015 08:19

(ShareCast News) - Restaurant Group posted a 10% lift in first half pre-tax profits to £36.9m as margins improved.Total revenues were up by 8% to £334m from £308m, which Restaurant Group said showed the company's resilience in tough trading conditions.The company lifted its operating margins by 10 basis points, and said higher levels of wage cost inflation were offset by operational efficiency sand minimal food cost inflation.While the new introduction of a living wage would have "some costs implications", the company said it was taking steps to mitigate the impact.Restaurant Group upped its interim dividend increased by 11.5% to 6.8p per share from 6.1p.Chief executive Danny Breithaupt was upbeat about the year ahead."The strengthening UK economy, increasing wages and disposable incomes, combined with the secular trends driving ongoing expansion of the eating out market, give me great confidence that TRG is well set for continued strong growth this year and beyond," he said.N+1 Singer said in a note interim result was "solid" but the amount of new restrautsn was below wht it had forecast.Analysts at N+1 Singer retained a 'hold' rating and warned a soft start to the third quarter could affect near term sentiment.Shares in Restaurant Group fell by 2.43% at 662p by 0846 BST.