Restaurant Group ousted Chief Executive Officer Danny Breithaupt, bringing in the former head of bookmaker Paddy Power to replace him after a year of turmoil at the UK owner of Frankie & Benny’s eateries.
Breithaupt will leave immediately, only two years after being appointed to the top job, the London-based company said Friday. His successor, Andy McCue, will start September 19.
Restaurant Group shares rose as much as 11 per cent in London trading on optimism that the change can inspire a turnaround. McCue, who led Paddy Power for two years prior to its merger with Betfair, “has significant experience in the UK leisure space and his appointment should be taken well,” Berenberg analysts said in a note.
After more than a decade of consistent revenue and earnings growth, Restaurant Group is stumbling amid increased competition from rival casual dining chains and a drop in visitors to UK retail parks, where many of its outlets are located. In April, the company forecast another hit to profits amid deteriorating sales and said Chief Financial Officer Stephen Critoph had left after 11 years.
“We see this as a positive catalyst in dealing with the pent-up problems of the past and expect the news to be well received,” Anna Barnfather, an analyst at Panmure Gordon, said in a note.
The ousting of Breithaupt follows the completion of the first phase of a strategy review that started in April. The board decided a new leader is needed “to implement the initial actions and then prioritize the next phase of the review,” the company said. Breithaupt worked at Restaurant Group for 15 years.
Restaurant Group said business is in line with its previous guidance. The company will report first-half earnings and provide a strategy update on Aug. 26.
News by Bloomberg, edited by Hospitality Ireland
