City news: Restaurant Group, WPP, British Airways and AstraZeneca
RESTAURANT Group lost a quarter of its market value as cut-throat competition in the eating out market took a bite out of sales, setting the group on course for its first-profit fall in more than a decade.
Shares in the Frankie & Benny’s and Chiquito operator fell 99¼p to 275p as it warned business had deteriorated over the past two months.
Like-for-like sales are down 2.7 per cent for the 17 weeks to April 24 and no improvement is seen in underlying trends in the short term.
Annual profit forecasts have been reduced to between £74-80million from about £87million.
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It said finance chief Stephen Critoph will leave immediately after 11 years.
It has also launched a “comprehensive review” of its properties and site roll-out programme.
Business has also been hit by online shopping.
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WPP vets rivals for new leader
WPP has begun identifying potential candidates to eventually succeed founder Sir Martin Sorrell as it defended his £70.4million pay package.
Sir Martin, 71, who has led the advertising giant for three decades, saw his remuneration jump from £42.7million mainly due to a big rise in long-term incentives.
WPP’s compensation committee chairman Sir John Hood said: “While the value of Sir Martin’s award is very large, it was the result of an outstanding set of returns to shareholders.”
Addressing succession, chairman Roberto Quarto said: “At some point we all leave our jobs. The question is when. We have already begun to identify internal and external candidates.”
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Terror hits IAG epansion
THE owner of British Airways has put the brakes on its short-term growth plans after the Brussels terror attacks hit ticket sales.
IAG, which also operates Aer Lingus and Iberia, has also seen demand weaken from higher-paying premium customers.
Lower fuel costs helped quarterly operating profit take off in the three months to March 31 to €155million (£121million) from £19.5million the previous year as passenger revenue climbed 8 per cent to £3.48billion.
Chief executive Willie Walsh said: “March revenue was affected by Easter and the Brussels terror attacks.”
Shares fell 26p to 525p.
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Astra turns focus to cancer
ASTRAZENECA is embarking on a £752million efficiency drive and increasing its focus on cancer treatments to boost flagging profits.
The drugs giant posted a 1 per cent rise in first-quarter sales to £4.2billion but operating profit dipped 12 per cent to £1.1billion as it spent more on research and development and integrated acquisitions.
Astra, which is working on treatments to replace lost revenue from blockbuster drugs losing patent protection, is focusing on areas including diabetes, respiratory conditions and oncology.
Chief executive Pascal Soriot said: “We are also driving greater efficiency.”
