Edit: This report has taken shape now, so I've removed the initial introduction and am replacing it with a list of what we've covered today:



Thanks Graham! It's Paul here. We're trying to write the same article in relays. What could possibly go wrong?!

As regards Restaurant (LON:RTN) - I woke up thrilled that it looked as if there had been a 240p bid for Revolution Bars (LON:RBG) but then realised that I'd got the wrong ticker! I'm actually short of Restaurant (LON:RTN) - so was not best pleased with an 8% rise in its share price this morning, in reaction to interim results.

It's about £700m market cap after today's rise. RTN operates the Franki & Benny's chain, and some other smaller operations. About half its estate are near cinemas. I'm short of the shares because the main format seems tired. People I know tell me that the food is awful - microwaved frozen stuff, apparently.

There is over-capacity, and cost pressures (especially wages) in this sector. Although judging from the share price (now up nearly 10% at the time of writing), it sounds as if investor worries might be overdone. Could there be opportunities in the hospitality sector, I wonder?

A quick look at interim results from

Restaurant (LON:RTN)

(in which I (Paul) have a short position)

26 weeks to 2 Jul 2017

  • LFL sales down 2.2%
  • Adjusted profit of £25.5m in H1 - down 30% on prior year - note how operational gearing kicks in on the downside - a small drop in revenues = big drop in profits.
  • Net debt of £19.3m, so company looks well-funded. 
  • Balance sheet looks strong, with NAV of £190.5m, and NTAV of £164.0m
  • Interim divi maintained at 6.8p "as a sign of confidence in our plan"
  • Outlook - current trading in line.
  • Expect to deliver an adjusted…

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