The Restaurant Group plc plc The Restaurant Group 5-7 Marshalsea Road London SE1 1EP Tel: 020 3117 5001 www.trgplc.com Annual Report 2013 A successful year of consistent growth Annual Report 2013 The Restaurant Group plc Annual Report 2013 69 The Restaurant Group plc (“TRG” or “the Group”) Shareholder information operates over 440 restaurants and pub restaurants. Its principal trading brands are Directors Registrar Alan Jackson Equiniti Limited Frankie & Benny’s, Chiquito, Coast to Coast Non-executive Chairman Aspect House Spencer Road and Garfunkel’s. The Group also operates Andrew Page Lancing Pub restaurants and a Concessions business Chief Executive Officer West Sussex BN99 6DA which trades principally at UK airports. Stephen Critoph Auditor Group Finance Director Deloitte LLP 2 New Street Square Trish Corzine London EC4A 3BZ Executive Director, Concessions (until 15 May 2013) Solicitors Tony Hughes Slaughter and May Non-executive One Bunhill Row London EC1Y 8YY Simon Cloke Non-executive Brokers JPMorganCazenove Sally Cowdry 25 Bank Street Overview Non-executive (appointed 1 March 2014) London E14 5JP Company Secretary Panmure Gordon & Co Until 5 April 2013: Robert Morgan One New Change From 5 April 2013: Stephen Critoph London EC4M 9AF Head office (and address for all correspondence) Financial calendar 5-7 Marshalsea Road Annual General Meeting London SE1 1EP 15 May 2014 Strategic report Strategic Telephone number Proposed final dividend – 2013 020 3117 5001 Announcement – 26 February 2014 Ex-dividend – 18 June 2014 Company number Record date – 20 June 2014 SC030343 Payment date – 9 July 2014 Overview Financial statements Registered office 1 George Square Financial highlights 01 Independent auditor’s report 38 Glasgow G2 1AL Governance At a glance 02 Accounting policies for the consolidated accounts 41 Consolidated income statement 45 Strategic report Consolidated statement of changes in equity 46 Chairman’s statement 04 Consolidated balance sheet 47 Chief Executive Officer’s review of operations 06 Consolidated cash flow statement 48 Group Finance Director’s report 12 Notes to the accounts 49 Company financial statements Governance Company balance sheet 65 Board of Directors 16 Accounting policies and basis of preparation 66 statements Financial Report of the Directors 17 Group financial record 68 Corporate responsibility 22 Shareholder information 69 Directors’ remuneration report 25 Audit Committee report 36 The paper used in this report is sourced from well-managed forests and is FSC accredited. 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Designed and produced by Instinctif Partners www.instinctif.com The Restaurant Group plc Annual Report 2013 01 Financial highlights The Group had another strong performance in 2013 with significant growth in revenues, profits and cash flow: Revenue increased to £580m (like-for-like sales +3.5%) Operating margin increased to 12.9% EBITDA increased to £107.8m Profit before tax increased to £72.7m EPS increased to 28.0p per share Proposed full year dividend increased to 14.0p per share Operations strongly cash generative. Operating cash flow £116.8m, up 15% Roll out continues: 35 new sites opened in the period Overview 36-43 new sites targeted for 2014 Over 1,000 new jobs created in 2013 Strong current trading, with total sales up 10% and like-for-like sales growth at 3.5% for the eight weeks to 23 February 2014. Strategic report Strategic Revenue (£m) EBITDA (£m) Profit before tax (£m) Governance +9% +13% +13% 13 579.6 13 107.8 13 72.7 12 532.5 12 95.5 12 64.6 11 487.1 11 89.7 11 60.3 10 454.0 10 83.4 10 54.0 Financial statements Financial 09 435.7 09 79.6 09 50.0 EPS (£m) Dividend per share (p) +16% +19% 13 28.02 13 14.00 12 24.08 12 11.80 11 21.86 11 10.50 10 19.25 10 9.00 09 17.48 09 8.00 02 Annual Report 2013 The Restaurant Group plc At a glance over Strong brands focused on 1,000 new jobs the casual eating-out market created 43m meals served 17 new openings in 2013 4 new openings in 2013 5 new openings in 2013 232 restaurants 73 restaurants 10 restaurants Frankie & Benny’s brings together classic Mexican for fun, fantastic food, amazing Coast to Coast takes its inspiration from the American and Italian style with food and drink atmosphere – for a good time, guaranteed. Lincoln Highway, which spans the United States that always provides great value for money. The Chiquito menu offers a great range of of America from New York to San Francisco. The kitchen buzzes with bustling activity as authentic Mexican & “Tex-Mex” dishes in a lively This is reflected in our great range of authentic the chefs prepare dishes from our broad menu environment, with fantastic music. The décor food and drinks, all served with superb hospitality – pizzas, pastas, burgers, grills and other favourites draws inspiration from Mexican architecture and and service. We offer the best of classic American – while, in typical stateside fashion, service at Latin style. Some restaurants have a rustic and food – Aberdeen Angus beef burgers, deep dish Frankie & Benny’s is second to none! Settle into relaxed feel while others demonstrate the buzz style Chicago pizzas, distinctive steaks, amazing a cosy booth to enjoy a casual family meal or and graphic energy of contemporary Mexico City. seafood dishes, wraps and South-West American a catch up with friends and observe the clatter Chiquito favourite dishes include nachos, burritos, specials. Coast to Coast is more than just a and chatter of the open kitchen and the familiar enchiladas and our signature sizzling fajitas, as well restaurant, with a great bar serving speciality classic 50’s and 60’s soundtrack playing in the as the old favourites – burgers, ribs, salads and cocktails and a wide range of beers, spirits and background. The restaurant walls are filled with hand-cut steaks from the grill. We specialise in traditional milkshakes. The music is an eclectic family snapshots and memorabilia showing life on great food, good times and fantastic cocktails mix of Motown and American Rock, songs you the lower east side of the Big Apple, helping you to ensure every meal is a fiesta. Chiquito is open may not have heard in a little while, but are into a “New York state-of-mind”. First opened in for lunch, lazy afternoons and lively evenings, so absolutely guaranteed to lift your spirits and 1995 in Leicester, Frankie & Benny’s has become whether you’re out shopping, meeting friends after make you smile. We currently have ten restaurants one of the best known casual dining brands in the work or planning a party it’s the only place to be! open and see significant opportunities to United Kingdom, and trades successfully in leisure Trading in the UK for over 20 years, Chiquito grow Coast to Coast into a great brand. and retail locations, standalone sites and at six continues to attract a broad mix of young adults, airports. The estate comprises of 232 restaurants couples, teenagers, families and large parties. spread across the country from Aberdeen to Over 70 leisure, retail and stand-alone restaurants St Austell. cover the UK with more openings planned. www.frankieandbennys.com www.chiquito.co.uk www.c2crestaurants.com The Restaurant Group plc Annual Report 2013 03 53 Scotland – 53 South East – 103 Midlands – 54 29 Frankie & Benny’s 37 Frankie & Benny’s 38 Frankie & Benny’s 09 Chiquito 14 Chiquito 10 Chiquito 07 Garfunkel’s 20 Pub restaurants 03 TRG Concessions 08 TRG Concessions 29 TRG Concessions 03 Coast to Coast 42 03 Coast to Coast 06 Northern Ireland – 06 North West – 67 05 Frankie & Benny’s London 32 Frankie & Benny’s 67 01 Chiquito (inside the M25) – 46 09 Chiquito 15 Frankie & Benny’s 08 TRG Concessions Wales – 21 07 Chiquito 17 Pub restaurants 13 Frankie & Benny’s 13 Garfunkel’s 01 Coast to Coast 03 Chiquito 05 Pub restaurants 05 Pub restaurants 05 TRG Concessions North East – 42 54 01 Coast to Coast 32 Frankie & Benny’s 28 South West – 25 09 Chiquito 16 Frankie & Benny’s East Anglia – 28 01 Coast to Coast 06 Chiquito 21 15 Frankie & Benny’s 01 Garfunkel’s 46 05 Chiquito 02 TRG Concessions 02 Pub restaurants 05 TRG Concessions 25 103 01 Coast to Coast Overview Pubs Strategic report Strategic 4 new openings in 2013 5 new sites opened in 2013 21 restaurants Governance 49 pub restaurants 60 sites (including 5 Filling Station) Really great pubs are timeless, familiar and very TRG’s Concessions business has a market-leading Garfunkel’s – founded in London’s West End in British. Everybody knows what their perfect pub reputation for developing partnerships to deliver 1979, Garfunkel’s is proud to be the original British looks like. Each of ours has its own style and catering solutions that meet the needs of our café restaurant serving breakfast, lunch and dinner personality, and you’ll always find a warm welcome, clients and their customers.