THE RESTAURANT GROUP PLC
Date : 03/03/06 FTSE sector: Leisure Entertainment & Hotels FTSE sub sector : Restaurants
An analysis of the performance of TRG over the past 5 years in the market in which it operates has identified its financial status, the economic realities of the business in its environment and reviews the changes that have taken place (Reid and Myddleton 2004).
The group has shown strong year on year performance in terms of sales, profits and utilisation of assets which have reflected both internal changes within the group and external changes in the business environment.
TRG have illustrated a balance between an efficient financing policy using funds raised at the lowest cost together with the utilisation of cash generated from relate earnings for their expansion programme.
By gaining greater confidence from investors they have raised finance via the cheapest route of issuing ordinary shares. This confirms the strength its financial management and its operational efficiency.
The review has clearly identified the strength in the management team and in shareholder value.
Analysing the share price performance over the last 5 years has been used as a barometer to determine the success of financial decisions via the market valuations of shares.(Pike and Neal 2004)Their performance shows a 225% growth in share price, (doubled in the last two years) and compared to
the restaurant sector performance of 75% and the
FTSE All share performance of no growth clearly
evidences the shares in TRG are highly liquid making them highly attractive.
Potentially there is room in the UK market and the global market for further expansion .
Based on the analysis taken place the recommendation is a STRONG BUY for the potential of future growth in capital gains....