the restaurant group plc
57 marshalsea road
london se1 1ep
tel 020 3117 5001
wwwtrgplccom
the restaurant group plc  annual report 2010
strong brands 
focused strategy
annual report 2010
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designed and produced by the college  wwwthecollegeukcom  the restaurant group plc operates 389 
restaurants and pub restaurants its principal 
trading brands are frankie  benny’s chiquito 
and garfunkel’s and it also operates a pub 
restaurant business as well a concessions 
division which trades on over 50 sites  
principally at uk airports
introduction 
financial highlights 01 
at a glance 02
business review 
chairman’s statement 04 
chief executive officer’s review of operations 06 
group finance director’s report 12 
governance 
board of directors 16 
report of the directors 18
corporate responsibility 26 
directors’ remuneration report 29 
audit committee report 36 
financial statements 
independent auditors’ report 38 
accounting policies for the consolidated accounts 39 
consolidated income statement 43 
consolidated statement of comprehensive income 44 
consolidated statement of changes in equity 45 
consolidated balance sheet 46 
consolidated cash flow statement 47 
notes to the accounts 48
independent auditors’ report – company accounts 69 
company financial statements – under uk gaap 70 
group financial record 72
shareholder information 73 
contents
the restaurant group plc annual report 2010 73 
directors
alan jackson
nonexecutive chairman
andrew page
chief executive officer
stephen critoph
group finance director
trish corzine
executive director concessions
tony hughes
nonexecutive
simon cloke
nonexecutive
company secretary
robert morgan
registered office
until 14 march 2011
151 st vincent street
glasgow g2 5nj 
from 14 march 2011
1 george street
glasgow g2 1al 
head office
57 marshalsea road
london se1 1ep
telephone number
020 3117 5001
company number
sc030343
shareholder information
registrar
equiniti limited
aspect house
spencer road
lancing 
west sussex bn99 6da
auditors
deloitte llp
hill house
1 little new street
london ec4a 3tr
solicitors
maclay murray  spens llp
one london wall
london ec2y 5ab
slaughter and may
one bunhill row
london ec1y 8yy
brokers
jpmorgan cazenove
20 moorgate
london ec2r 6da
panmure gordon
moorgate hall
155 moorgate
london ec2m 6xb
financial calendar
annual general meeting – 11 may 2011
proposed final dividend – 2010
announcement – 9 march 2011
exdividend – 18 may 2011
record date – 20 may 2011
payment date – 17 june 2011 introduction business review governance financial statements
the restaurant group plc annual report 2010 01 
financial highlights
the group had a strong performance 
in 2010
•	 	 r e v e n ue 	 u p 	 7  	 t o 	 £ 4 6 6 m	 
 l i k e  f o r  l i k e 	 s al es 	  1  
•	 	 e b i t d a 	 i n c r e a s e d 	 b y 	 8 	 t o 	 £ 8 6 m	
• 	 	 a d j u s t e d 	 p r o fi t 	 b e f o r e 	 t a x 	 i n c r e a s e d	 
b y 	 1 2  	 t o 	 £ 5 6 m
• 	 	 a d j u s t e d 	 e p s 	 r o s e 	 1 4  	 t o	 
20p per share
• 	 	 p r o p o s e d 	 f u l l 	 y e a r 	 d i v i d e n d 	 o f	 
9p 	 pe r 	 sh a r e  	 u p 	 1 2  5 
• 	 	 s t a t u t o r y 	 p r o fi t 	 b e f o r e 	 t a x 	 i n c r e a s e d	 
b y 	 1 7  	 t o 	 £ 5 6 m
•	 st a t u t o r y 	 e p s 	 r o s e 	 7  	 t o 	 2 0p
operations strongly cash generative 
and net debt reduced by £20m to £47m 
roll out continues
• 	 	 2 4 	 n e w 	 s i t e s 	 o p e n e d 	 i n 	 t h e 	 p e r i o d	
•	 	 2 2  2 7 	 n e w 	 s i t es 	 t a r ge t e d 	 f o r 	 2 0 1 1
strong current trading given the 
economic climate with likeforlike 
sales returning to growth at 3 and 
total sales up 8 for the nine weeks 
to 6 march 2011
s t a t u t or y 	 a n d 	 a d j u s t e d 	 r e s ult s 	 s t a t e d 	 o n 	 a 	 5 3 	 w e e k 	 b a s i s	 
f or 	 2 0 1 0 	 compar ed 	 with 	 a 	 5 2 	 w e ek 	 basis 	 f or 	 2 0 0 9 
	 r e s ult s 	 m a r k e d 	 a s 	 a d j u s t e d 	 a r e 	 s t a t e d 	 e x c l ud i n g	 
non trading 	 it e ms 	  r e fer 	 t o 	 no t e 	 2 	 o f 	 the 	 financial 	 sta t e me n ts  
10
09
08
07
06
revenue £m

7
3147
3667
4165
4357
4657
10
09
08
07
06
adjusted ebitda £m

8
556
678
774
796
858
10
09
08
07
06
adjusted profit before tax £m

12
350
434
489
500
558
10
09
08
07
06
adjusted eps p

14 
115
146
166
174
199
10
09
08
07
06
dividend per share p

125
600
725
770
800
900 02 the restaurant group plc annual report 2010
at a glance
2
supporting 
brand 
development
• 	 2 	 n e w 	 o p e n i n g s
• 	 2 3 	 r estau ra n t s
g a r f u n k e l ’ s 	 – 	 a 	 t ru l y 	 g r ea t 	 n a m e 	 i n 	 b r i t i s h 	 a n d 	 w o r l d 	 c u i s i n e  	 f o u n d e d 	 i n 	 l o n d o n ’ s	
w e s t 	 e n d 	 i n 	 1 9 7 9  	 g a r f u n k e l ’ s 	 h a s 	 b ec o m e 	 l eg en d a r y  	 i t 	 em b r a c e s 	 t h e 	 c o n c ep t	 
o f 	 b e i n g 	 a l l 	 t h i n g s 	 t o 	 a l l 	 p eo p l e  	 o f f er i n g 	 s o m e t h i n g 	 f o r 	 e v er y o n e  	 t h e 	 m en u 	 i s	 
a 	 f a n t a s t i c 	 m i x 	 o f 	 t h e 	 b e s t 	 o f 	 b r i t i s h 	 a n d 	 i n t ern a t i o n a l 	 c u i s i n e  	 f r o m 	 t h e 	 t em p t i n g	
r o t i s s er i e 	 c h i c k en 	 t o 	 t er i y a k i 	 s a l m o n  	 e v er y t h i n g 	 h a s 	 b e en 	 c h o s en 	 b ec a u s e 	 w e 	 j u s t	
l o v e 	 t h e 	 t a s t e  	 ou r 	 s a l a d 	 b a r 	 h a s 	 a 	 d e l i c i o u s 	 r a n g e 	 o f 	 f r e s h 	 s a l a d s  	 p r ep a r e d 	 d i s h e s	
and 	 dr essings 	 av ailable 	 all 	 day  	 p rincipally 	 loca t ed 	 acr oss 	 cen t ral 	 l ondon  	 each	
g a r f u n k e l ’ s 	 r e s t a u r a n t 	 o f f er s 	 a 	 p l a c e 	 t o 	 r e l a x 	 a n d 	 t a k e 	 a 	 b r ea k 	 f r o m 	 t h e 	 h u s t l e 	 a n d	
b u s t l e 	 o u t s i d e  	 w i t h 	 a 	 l o y a l 	 f o l l o w i n g 	 o f 	 v i s i t o r s  	 l o c a l 	 r e s i d en t s 	 a n d 	 w o r k er s 	 w h o	
h a v e 	 b e en 	 ea t i n g 	 a t 	 g a r f u n k e l ’ s 	 f o r 	 y ea r s  	 g a r f u n k e l ’ s 	 c o n t i n u i n g 	 p o p u l a r i t y 	 m ea n s	
e x p a n s i o n 	 i s 	 s t i l l 	 o n 	 t h e 	 m en u 	 a f t er 	 o v er 	 3 0 	 y ea r s 	 o f 	 t r a d i n g  	 ou r 	 l a t e s t 	 r e s t a u r a n t	
o p en e d 	 o n 	 c o c k s p u r 	 s t r e e t  	 t r a f a l g a r 	 s q u a r e 	 i n 	 2 0 1 0  	 a n d 	 o f f er s 	 t h e 	 s a m e 	 f r i en d l y	
w e l c o m e 	 a n d 	 b r o a d 	 m en u 	 i n 	 a 	 w a r m 	 c o n t em p o r a r y 	 s e t t i n g  	 j u s t 	 w h a t 	 y o u 	 n e e d	
a f t er 	 a 	 h ec t i c 	 s h o p p i n g 	 t r i p 	 i n 	 t h e 	 w e s t 	 e n d 	 o r 	 t h e 	 p er f ec t 	 w a y 	 t o 	 c o m p l em en t	 
a 	 t h ea t r e 	 v i s i t  	 c o n t i n u e d 	 s u c c e s s 	 a c r o s s 	 a l l 	 d a y 	 p a r t s 	 i n c l u d i n g 	 b r ea k f a s t  	 l u n c h	
a n d 	 d i n n er 	 m ea n s 	 a 	 h ea l t h y 	 a p p e t i t e 	 f o r 	 g r o w t h 	 w i t h 	 m o r e 	 s i t e s 	 ea r m a r k e d 	 t o	 
open 	 in 	 cen t ral 	 l ondon 
• 	 9 	 n e w 	 o p e n i n g s
• 	 1 9 7 	 r estau ra n t s
f r a n k i e 	  	 b e n n y ’ s 	 b r i n g s 	 t o g e t h e r 	 t h e 	 b e s t 	 o f 	 c l a s s i c 	 a m e r i c a n 	 a n d 	 i t a l i a n 	 s t y l e	
a nd 	 cuisin e 	 that 	 a lw ays 	 pr ov id e s 	 gr e at 	 v a lu e 	 f or 	 money  	 t he 	 k it c h e n 	 buz z e s 	 w it h 	
bust ling 	 act i v it y 	 a s 	 the 	 c hef s 	 pr e pa r e 	 dis he s 	 f r om 	 our 	 br oad 	 m e nu 	 – 	 piz z a s	
pa sta s 	 bu rg e r s 	 gr ills 	 a nd 	 o t he r 	 favour it e s 	 – 	 w hile  	 in 	 t y pic a l 	 stat e s id e 	 fa s hio n 	
se r v ic e 	 at 	 f ra nk ie 	  	 b e nn y ’ s 	 is 	 se c ond 	 t o 	 none  	 set t le 	 int o 	 a 	 c osy 	 bo o t h 	 t o	 
e njo y 	 a 	 c a su a l 	 fa mil y 	 m e a l 	 or 	 a 	 c at c h 	 up 	 w it h 	 f r ie nds 	 a nd 	 obse r v e 	 t h e 	 clat t e r	 
a nd 	 c h at t e r 	 o f 	 th e 	 op e n 	 k it c he n 	 a nd 	 t he 	 fa milia r 	 c la s sic 	 50 ’ s 	 a nd 	 6 0 ’ s 	 sou nd t rac k	
play ing 	 in 	 th e 	 bac k gr ound  	 t he 	 r e staura nt 	 w a lls 	 a r e 	 fille d 	 w it h 	 fa mil y 	 s n a ps ho t s 	
a nd 	 m e mo ra bilia 	 s ho w ing 	 lif e 	 on 	 t he 	 lo w e r 	 e a st 	 sid e 	 o f 	 t he 	 b ig 	 a pple  	 h e lping	
you 	 int o 	 a 	 “n ew 	 y or k 	 stat e  o f mind”  	 fir st 	 op e ne d 	 in 	 1 9 95 	 in 	 le ic e st e r 	 
f r a n k i e 	  	 b e n n y ’ s 	 h a s 	 b e c o m e 	 o n e 	 o f 	 t h e 	 b e s t 	 k n o w n 	 c a s u a l 	 d i n i n g 	 b r a n d s	 
in 	 th e 	 unit e d 	 k ingdom  	 a nd 	 t rad e s 	 suc c e s sf ull y 	 in 	 le isur e 	 a nd 	 reta il 	 lo c at io ns	
s t a n d  a l o n e 	 s i t e s 	 a n d 	 a t 	 s i x 	 a i r p o r t s  	 t h e 	 e s t a t e 	 c o m p r i s e s 	 o f 	 a l m o s t	 
2 0 0 	 re stau ra nt s 	 s pre ad 	 ac r os s 	 t he 	 c ount r y 	 f r om 	 a b e r d e e n 	 t o 	 s t 	 au st e ll 
• 	 5 	 n e w 	 o p e n i n g s
• 	 6 8 	 r estau ra n t s
w i t h 	 a l m o s t 	 7 0 	 r e s t a u r a n t s 	 n a t i o n w i d e  	 a t 	 c h i q u i t o 	 w e 	 a r e 	 p r o u d 	 t o 	 b e 	 t h e 	 u k ’ s	
most 	 popula r 	 a nsw e r 	 t o 	 m ex ic a n 	 e at ing 	 a nd 	 dr ink ing 	 w it h 	 ov e r 	 1 0 0  0 0 0 	 h a pp y	
hombre s 	 tu c k ing 	 int o 	 our 	 v ibra nt  	 ta st y 	 f o od 	 ev e r y 	 w e e k 	 t h e 	 c hiquit o 	 m e nu 	
o f f e r s 	 a 	 g r e a t 	 r a n g e 	 o f 	 a u t h e n t i c 	 m e x i c a n 	  	 “ n o r t h  o f 	 t h e 	 b o r d e r ” 	 d i s h e s 	 i n	 
a 	 la idbac k 	 l at ino 	 e n v ir onm e nt  	 w it h 	 fa nta st ic 	 music  	 t he 	 d é c o r 	 dra ws 	 ins pirat io n	
f r om 	 m ex ic a n 	 a r c hit e c t ur e 	 a nd 	 l at in 	 st y le  	 som e 	 r e staura nt s 	 h av e 	 a 	 r u st ic	 
a nd 	 re la x e d 	 fe e l 	 w hile 	 o t he r s 	 d e monst rat e 	 t he 	 buz z 	 a nd 	 gra phic 	 e n e rg y 	 o f	
c o nt e mpora r y 	 m ex ic o 	 cit y  	 chiquit o 	 favour it e 	 dis he s 	 inc lud e 	 n ac hos 	 bu r r it os	
e n c h i l a d a s 	 a n d 	 o u r 	 s i g n a t u r e 	 s i z z l i n g 	 f a j i t a s  	 a s 	 w e l l 	 a s 	 t h e 	 o l d 	 f a v o u r i t e s 	 –	
b u r g e r s  	 s a l a d s 	 a n d 	 s t e a k s 	 f r o m 	 t h e 	 g r i l l  	 w e 	 s p e c i a l i s e 	 i n 	 m e x i c a n 	 b e e r 	 a n d	
f a n t a s t i c 	 c o c k t a i l s  	 c h i q u i t o 	 i s 	 o p e n 	 f o r 	 l u n c h  	 l a z y 	 a f t e r n o o n s 	 a n d 	 l i v e l y	
e v e n i n g s  	 s o 	 w h e t h e r 	 y o u ’ r e 	 o u t 	 s h o p p i n g  	 m e e t i n g 	 f r i e n d s 	 a f t e r 	 w o r k 	 o r 	 p l a n n i n g	
a 	 p a r t y 	 i t’ s 	 t h e 	 o n l y 	 p l a c e 	 t o 	 b e  	 t r a d i n g 	 i n 	 t h e 	 u k 	 f o r 	 o v e r 	 2 0 	 y e a r s  	 c h i q u i t o	
c o n t i n u e s 	 t o 	 a t t r a c t 	 a 	 b r o a d 	 m i x 	 o f 	 y o u n g 	 a d u l t s  	 c o u p l e s  	 t e e n a g e r s  	 f a m i l i e s	
a nd 	 la rg e 	 pa r t ie s 	 introduction business review governance financial statements
the restaurant group plc annual report 2010 03 
97
44
26
21
20
45
53
34
44
scotland – 44
22 frankie  benny’s
08 chiquito
07 garfunkel’s
07 trg concessions
northern ireland – 2
01 frankie  benny’s 
01 chiquito
wales – 20
12 frankie  benny’s
03 chiquito
05 pub restaurants
south west – 21
12 frankie  benny’s
06 chiquito
01 garfunkel’s 
02 trg concessions
south east – 97
36 frankie  benny’s
13 chiquito
22 pub restaurants
26 trg concessions
london  
inside the m25 – 44
12 frankie  benny’s
06 chiquito
15 garfunkel’s
06 pub restaurants
05 trg concessions
east – 26
14 frankie  benny’s
03 chiquito
02 pub restaurants
07 trg concessions
midlands – 45
34 frankie  benny’s
08 chiquito
03 trg concessions
north west – 53
27 frankie  benny’s
11 chiquito
07 trg concessions
08 pub restaurants
north east – 34
24 frankie  benny’s
09 chiquito
01 trg concessions
p u b 	 r esta u ra n t s	
• 	 1 	 n e w 	 o p e n i n g
• 	 4 3 	 r estau ra n t s
re a ll y 	 g re at 	 pu bs 	 a re 	 t im e le s s 	 fa milia r 	 a nd 	 v e r y 	 b r it is h  	 e v e r y bod y 	 k no ws 	 w hat	
t h e ir 	 p e r fe ct 	 pu b 	 lo o ks 	 lik e  	 e ac h 	 o f 	 ou r 	 pu bs 	 h a s 	 it s 	 o w n 	 st y le 	 a nd 	 p e r so na li t y 	
a n d 	 y o u ’ l l 	 a l w a y s 	 fi n d 	 a 	 w a r m 	 w e l c o m e  	 a g e l e s s 	 i n t e r i o r s  	 fi n e 	 b r i t i s h 	 p u b 	 f o o d 	 
a 	 la rg e 	 v a r iet y 	 o f 	 g re at 	 re a l 	 a le s 	 a nd 	 fin e 	 w in e 	 a nd 	 g re at 	 c o f fe e  	 m ost l y 	 set 	 in 	
b e au t if ul 	 r u ra l 	 o r 	 se mir u ra l 	 lo c at io ns 	 e ac h 	 pu b 	 h a s 	 a 	 “lo c a l” 	 fe e l 	 a nd 	 m a n y 	 a r e 	
s e t 	 i n 	 i n t r i g u i n g 	 b u i l d i n g s 	 w i t h 	 f a s c i n a t i n g 	 h i s t o r i e s  	 w e 	 d o n ’ t 	 w a n t 	 a l l 	 o u r 	 p u b s	 
t o 	 l o o k 	 a n d 	 f e e l 	 t h e 	 s a m e 	 – 	 i n s t e a d 	 w e 	 p r e s e r v e 	 t h e 	 c h a r a c t e r 	 o f 	 t h e 	 b u i l d i n g 	
w h i c h 	 a f t e r 	 a l l 	 w a s 	 w h a t 	 a t t r a c t e d 	 u s 	 t o 	 t h e 	 p u b 	 i n 	 t h e 	 fi r s t 	 p l a c e  	 t h e 	 r a n g e 	 o f	
b e e r s 	 a v a i l a b l e 	 c h a n g e s 	 f r e q u e n t l y 	 a n d 	 s e a s o n a l 	 a n d 	 l o c a l 	 s p e c i a l s 	 m e a n 	 t h e	
m e n u 	 a l s o 	 o f f e r s 	 n e w 	 c h o i c e s 	 a l o n g s i d e 	 t r u s t e d 	 f a v o u r i t e s 	 e a c h 	 t i m e 	 y o u 	 v i s i t 	
t h e r e ’ s 	 f r i e n d l y  	 e n g a g i n g 	 s e r v i c e 	 f r o m 	 t h e 	 m o m e n t 	 y o u 	 a r r i v e  	 e n s u r i n g 	 t h a t	 
a l l 	 y o u r 	 n e e d s 	 a r e 	 t a k e n 	 c a r e 	 o f  	 w e 	 b e l i e v e 	 t h a t 	 r e a l l y 	 g r e a t 	 p u b s 	 w i l l 	 n e v e r	 
g o 	 ou t 	 o f 	 fa s hio n  	 a nd 	 t h at 	 o ppo r t u nit ie s 	 t o 	 ex pa nd 	 in 	 t h e 	 se ct o r 	 a re 	 av a ila bl e	 
f o r 	 ex p e r ie nc e d 	 o p e rat o r s 	 w it h 	 t h e 	 r ig ht 	 o f fe r 	 f o r 	 cu st o m e r s 
• 	 7 	 n e w 	 o p e n i n g s
• 	 5 8 	 r estau ra n t s
t rg ’ s 	 c o nc e s s io ns 	 di v is io n 	 h a s 	 a 	 m a r k et le ading 	 re pu tat io n 	 f o r 	 d e v e lo ping	
pa r t n e r s hips 	 t o 	 d e li v e r 	 c at e r ing 	 so lu t io ns 	 t hat 	 m e et 	 t h e 	 n e e ds 	 o f 	 ou r 	 clie nt s 	 a nd	
t h e ir 	 cu st o m e r s  	 cu r re nt l y 	 o p e rat ing 	 mo re 	 t h a n 	 50 	 ou t let s 	 in 	 t h e 	 u k ’ s 	 bu s ie st	
a i r p o r t s  	 o t h e r 	 t r a n s p o r t 	 l o c a t i o n s 	 a n d 	 s h o p p i n g 	 c e n t r e s  	 w e 	 h a v e 	 a l m o s t	 
2 0 	 y e a r s 	 o f 	 e x p e r i e n c e 	 p r o v i d i n g 	 h o s p i t a l i t y 	 t o 	 t h e 	 t r a v e l l i n g 	 p u b l i c  	 o u r	
s p e c i a l i s t 	 o p e r a t i n g 	 k n o w l e d g e 	 a n d 	 fl e x i b i l i t y 	 e n s u r e s 	 s u c c e s s f u l 	 p e r f o r m a n c e	
ac r os s 	 ou r 	 di v e r se 	 bra nd 	 po r t f o lio  	 c ov e r ing 	 a 	 w id e 	 ra ng e 	 o f 	 po pula r 	 c at e g or i e s	
i n c l u d i n g 	 t a b l e 	 s e r v i c e  	 c o u n t e r 	 s e r v i c e  	 s a n d w i c h 	 s h o p s  	 p u b s 	 a n d 	 b a r s 	 
t o 	 m e e t 	 c l i e n t 	 n e e d s 	 w e 	 d e l i v e r 	 e x i s t i n g 	 t r g 	 b r a n d s  	 c r e a t e 	 b e s p o k e 	 c o n c e p t s	
o r 	 e s t a b l i s h 	 p a r t n e r s h i p s 	 t o 	 f r a n c h i s e 	 b r a n d s 	 f r o m 	 t h i r d 	 p a r t i e s 	 a s 	 a p p r o p r i a t e 	
b uilding 	 o n 	 ou r 	 t rac k 	 re c o r d 	 o f 	 in nov at io n  	 pa r t n e r s hip 	 a nd 	 p e r f o r m a nc e 	 a he ad	
o f 	 se ct o r 	 g r o w t h 	 w ill 	 e nsu re 	 w e 	 re m a in 	 a 	 m a r k et 	 le ad e r 	 in 	 t his 	 ex cit ing 	 se ct or  04 the restaurant group plc annual report 2010
chairman’s statement
“ 	 t h e 	 g r o u p 	 h a s 	 c o n s i s t e n t l y	
demonstrated the resilient nature  
o f 	 i t s 	 b u s i n e s s 	 m o d e l 	 a n d 	 t h i s	 
i s 	 a n o t h e r 	 e x c e l l e n t 	 s e t 	 o f 	 r e s u l t s  ”	
i 	 a m 	 d e l i g h t e d 	 t o 	 r e por t 	 t ha t 	 t h e 	 g r o u p 	 ha s 	 a g a i n 	 gr o w n	
r e v e n u e s  	 pr o fi t s 	 a n d 	 e a r ni n gs 	 p e r 	 s ha r e  	 t r a d i n g 	 c o n d it i o n s	
du r i n g 	 t h e 	 y e a r 	 w e r e 	 a d v e r s e l y 	 i m p a ct e d 	 b y 	 t h e 	 o n go i n g	
d i f fi c ult 	 e c o n omi c 	 b a c k dr op 	 a n d 	 a l s o 	 s om e 	 v e r y 	 u n u s u a l 	
weather related events – the ash cloud in april and one  
o f 	 the 	 harshe st 	 win t e rs 	 on 	 r e cord 	 a t 	 the 	 e nd 	 o f 	 the 	 y e ar 	
t h e s e 	 f a ct or s 	 m a d e 	 t r a d i n g 	 c o n d it i o n s 	 t o u g h 	 f or 	 u k	
c o n s u m e r  f a c i n g 	 b u s i n e s s e s 	 du r i n g 	 2 0 1 0  	 ho w e v e r  	 n o t	
withstanding 	 those 	 challe nge s  	 the 	 g r oup 	 con tinued 	 t o 	 
m a k e 	 pr o fi t a bl e 	 pr o gr e s s  	 op e n e d 	 2 4 	 n e w 	 r e s t a u r a n t s 	 
s e r v e d 	 3 7 	 mi l l i o n 	 m e a l s 	 i n c l ud i n g 	 fi v e 	 mi l l i o n 	 c hi l dr e n ’ s	 
me als 	 and 	 cr e a t ed 	 7 0 0 	 ne w 	 jobs 	
d u r i n g 	 2 0 1 0 	 t h e 	 g r o u p ’ s 	 r e v e n u e s 	 gr e w 	 7  	 t o 	 £ 4 6 6 m	 
 2 0 0 9  	 £ 4 3 6 m   	 a d j u s t e d 	 pr o fi t 	 b e f or e 	 t a x 	 gr e w 	 1 2  	 t o	
£ 5 5  9 m 	  2 0 0 9  	 £ 5 0  0 m  	 and 	 adjust ed 	 e ar nings 	 pe r 	 shar e	
i n c r e a s e d 	 b y 	 1 4  	 t o 	 1 9  95 p 	  2 0 0 9  	 1 7  4 8 p   	 t hi s 	 i n c r e a s e	 
i n 	 e a r ni n gs 	 p e r 	 s ha r e 	 r e pr e s e n t s 	 a 	 c om po u n d 	 a nn u a l	 
gr o w t h 	 r a t e 	 o f 	 1 7  	 o v e r 	 t h e 	 fi v e 	 y e a r s 	 t o 	 2 0 1 0  	 a 	 s i g nifi c a n t	
a c hi e v e m e n t 	 t ha t 	 d e mo n s t r a t e s 	 t h e 	 r e s i l i e n c e 	 a n d 	 o n go i n g	
positive performance of the group 
a c c or d i n gl y  	 t h e 	 b o a r d 	 i s 	 r e c om m e n d i n g 	 a n 	 i n c r e a s e d 	 fi na l	
d i v i d e n d 	 f or 	 2 0 1 0 	 o f 	 7  4 6 p 	 p e r 	 s ha r e 	 g i v i n g 	 a 	 t o t a l 	 f or 	 t h e	 
y e ar 	 o f 	 9  0 0 p 	 pe r 	 shar e 	  2 0 0 9  	 8  0 0 p   	 an 	 incr e ase 	 o f	 
1 2  5   	 s u b je ct 	 t o 	 s ha r e h o l d e r 	 a ppr o v a l 	 a t 	 t h e 	 a nn u a l	
g e n e r a l 	 m e e t i n g 	 t o 	 b e 	 h e l d 	 o n 	 1 1 	 m a y 	 2 0 1 1  	 t h e 	 fi na l 	 d i v i d e n d	
w i l l 	 b e 	 p a i d 	 o n 	 1 7 	 j u n e 	 2 0 1 1 	 t o 	 s ha r e h o l d e r s 	 o n 	 t h e 	 r e g i s t e r	
o n 	 2 0 	 m a y 	 2 0 1 1 	 a n d 	 t h e 	 s ha r e s 	 w i l l 	 b e 	 m a r k e d 	 e x  d i v i d e n d	
o n 	 1 8 	 m a y 	 2 0 1 1 	
o u r	c o n ti n u e d	f o c u s	o n	o u r	l e i s u r e	a n d	c o n c e s s i o n s	
d i v i s i o n s	a g a i n	e n a b l e d	th e	g r o u p	t o	d e l i v e r	a	s tr o n g	
pe r f or mance 	 de spit e 	 the 	 dif ficult 	 back dr op 	 f or 	 uk 	 consumer 	
– 	 f a c i n g 	 b u s i n e s s e s  	 o u r 	 l e i s u r e 	 d i v i s i o n  	 w hi c h 	 i n c or por a t e s	
f r a n k i e 	  	 b e n n y ’ s  	 c h i q u i t o  	 g a r f u n k e l ’ s 	 a n d 	 o u r 	 p u b	
r e s t a u r a n t s  	 p e r f or m e d 	 w e l l  	 d e l i v e r i n g 	 a 	 6  	 i n c r e a s e 	 i n	
r e v e n u e s 	 a n d 	 pr o fi t s  	 d u r i n g 	 t h e 	 y e a r 	 w e 	 op e n e d 	 1 7 	 n e w	
r e s t a u r a n t s 	 i n 	 t h e 	 l e i s u r e 	 d i v i s i o n  	 t h e s e 	 a r e 	 t r a d i n g 	 a h e a d	 
o f 	 e x pe cta tions 	 and 	 ar e 	 se t 	 t o 	 de liv e r 	 str ong 	 r e tur ns  	 d uring	
2 0 1 1 	 w e 	 pla n 	 t o 	 op e n 	 b e t w e e n 	 2 0 	 a n d 	 2 3 	 n e w 	 r e s t a u r a n t s	 
in 	 the 	 l e isur e 	 d ivision 	
 
  introduction business review governance financial statements
the restaurant group plc annual report 2010 05 
d e s pit e 	 s om e 	 m a j or 	 c ha l l e n g e s 	 r e s ult i n g 	 f r om 	 t h e 	 a s h 	 c l o ud	
pr obl e m s 	 i n 	 a pr i l 	 a n d 	 t h e 	 ha r s h 	 w e a t h e r 	 a t 	 t h e 	 e n d 	 o f 	 t h e	
y e a r  	 o u r 	 c o n c e s s i o n s 	 d i v i s i o n 	 p e r f or m e d 	 s u p e r bl y  	 a lt h o u g h	
u k	p a s s e n g e r	n u m b e r s	d e c l i n e d	d u r i n g	th e	y e a r 	o u r	
b u s i n e s s 	 c o u n t e r e d 	 t hi s 	 b y 	 f o c u s i n g 	 o n 	 g a i ni n g 	 m a r k e t 	 s ha r e	
and 	 gr o wing 	 mar gins  	 t his 	 r e sult ed 	 in 	 a 	 significan t 	 uplif t 	 
i n 	 r e v e n u e s 	  w hi c h 	 i n c r e a s e d 	 b y 	 1 2   	 a n d 	 pr o fi t s 	 w hi c h	
i n c r e a s e d 	 b y 	 2 9   	 d u r i n g 	 t h e 	 y e a r 	 s e v e n 	 n e w 	 s it e s 	 w e r e	
op e n e d  	 t h e s e 	 a r e 	 t r a d i n g 	 w e l l 	 a n d 	 a r e 	 s e t 	 t o 	 d e l i v e r 	 go od	
r e t u r n s  	 w e 	 pla n 	 t o 	 op e n 	 t w o 	 t o 	 f o u r 	 n e w 	 c o n c e s s i o n s 	 s it e s	
du r i n g 	 2 0 1 1 	
t h e 	 g r o u p 	 ha s 	 c o n s i s t e n t l y 	 d e mo n s t r a t e d 	 t h e 	 r e s i l i e n t 	 na t u r e	 
o f 	 it s 	 b u s i n e s s 	 mod e l 	 a n d 	 t hi s 	 i s 	 a n o t h e r 	 e x c e l l e n t 	 s e t 	 o f	
r e s ult s  	 t h e 	 g r o u p 	 ha s 	 c o n t i n u e d 	 t o 	 s t a y 	 d i s c i pl i n e d 	 a n d	
f ocused  	 gr o wing 	 its 	 e sta t e 	 with 	 qualit y 	 ne w 	 r e stauran ts 	
incr e asing 	 e ar nings 	 and 	 divide nds  	 ge nera ting 	 high 	 le v e ls	 
o f 	 c a s h 	 a n d 	 s i g nifi c a n t l y 	 r e du c i n g 	 n e t 	 d e b t  	 t h e s e 	 e x c e l l e n t	
r e s ult s 	 a r e 	 t h e 	 r e s ult 	 o f 	 t h e 	 ha r d 	 w or k  	 e x p e r t i s e 	 a n d	
dedic a tion 	 o f 	 our 	 d ir e ct ors  	 se nior 	 manageme n t 	 and 	 sta f f  	 
o n 	 b e ha l f 	 o f 	 t h e 	 b o a r d 	 i 	 w o ul d 	 l i k e 	 t o 	 r e c or d 	 o u r 	 t ha nk s	 
to all of them 
d u r i n g 	 t h e 	 y e a r  	 w e 	 a ppo i n t e d 	 s i mo n 	 c l ok e 	 a s 	 a 	 n o n 
e x e cutiv e 	 d ir e ct or  	 w e 	 w elcome 	 simon 	 t o 	 the 	 board 	 and 	 ar e	
c o n fi d e n t 	 t ha t 	 h e 	 w i l l 	 m a k e 	 a 	 v a l u a bl e 	 c o n t r i b u t i o n 	 t o 	 t r g 	
w e 	 ha v e 	 s t a r t e d 	 t h e 	 c u r r e n t 	 y e a r 	 w e l l  	 w it h 	 l i k e  f or  l i k e 	 s a l e s	
gr o w t h 	 o f 	 3  	 f or 	 t h e 	 fi r s t 	 ni n e 	 w e e k s 	 o f 	 t h e 	 y e a r  	 a n d 	 w e 	 a r e	
l o ok i n g 	 t o 	 b ui l d 	 f u r t h e r 	 o n 	 t hi s  	 w e 	 ha v e 	 a 	 s u p e r b 	 b u s i n e s s	
w it h 	 d i s t i n c t 	 m a r k e t 	 po s it i o n s  	 a n d 	 s t r o n g 	 br a n ds 	 w it h	
o u t s t a n d i n g 	 v a l u e  f or  mo n e y 	 o f f e r i n gs 	 w it h 	 w i d e 	 a pp e a l 	 
i 	 am 	 con fide n t 	 tha t 	 w e 	 ar e 	 w ell 	 placed 	 t o 	 con tinue 	 our 	
pr o fi t a bl e 	 pr o gr e s s 	
alan jackson
cha i r ma n
9 march 2011
a business  
capable of 
delivering  
longterm 
sustainable  
and growing  
cash flows 06 the restaurant group plc annual report 2010
introduction
2 0 1 0 	 t u r n e d 	 o u t 	 t o 	 b e 	 a n o t h e r 	 c ha l l e n g i n g 	 y e a r 	 f or 	 t h e	
r e s t a u r a n t 	 g r o u p  	 p a r t l y 	 du e 	 t o 	 f a ct or s 	 t ha t 	 w e 	 ha d	
a n t i c i p a t e d 	 a n d 	 p a r t l y 	 a s 	 a 	 r e s ult 	 o f 	 s om e 	 t ha t 	 w e 	 ha d 	 n o t 	
a lt h o u g h 	 t h e 	 u k 	 e c o n omi c 	 r e c o v e r y 	 g a i n e d 	 mom e n t u m	
du r i n g 	 t h e 	 y e a r  	 t h e 	 b a c k dr op 	 f or 	 dom e s t i c 	 c o n s u m e r  f a c i n g	
b u s i n e s s e s 	 r e m a i n e d 	 d i f fi c ult  	 a s 	 a n t i c i p a t e d  	 c o n s u m e r	
c o n fi d e n c e 	 w a s 	 f r a g i l e 	 a s 	 a 	 r e s ul t 	 o f 	 a 	 n u m b e r 	 o f 	 f a ct or s	
i n c l ud i n g 	 t h e 	 s h o c k 	 f r om 	 t h e 	 r e c e s s i o n  	 o n go i n g 	 t i g h t e r	 
c r e d it 	 c o n d it i o n s  	 l e v e l s 	 o f 	 u n e m pl o y m e n t 	  a n d 	 t h e 	 f e a r 	 o f	
u n e m plo y m e n t   	 i n fla t i o n  	 hi g h e r 	 t a x e s 	 a n d 	 n e g a t i v e 	 r e a l	
e a r ni n gs 	 gr o w t h  	 2 0 1 0 	 a l s o 	 t hr e w 	 u p 	 t w o 	 u n e x p e c t e d	
c ha l l e n g e s 	 – 	 t h e 	 e y j a f j a l la j ök ul l 	 v o l c a n o 	 a s h 	 c l o ud 	 i n 	 a pr i l	 
and one of the worst winters on record at the end of the  
y e a r  	 b o t h 	 o f 	 t h e s e 	 u n u s u a l 	 m e t e or o l o g i c a l 	 e v e n t s 	 c a u s e d	
s i g nifi c a n t 	 d i s r u p t i o n 	 t o 	 o u r 	 b u s i n e s s 	 a n d  	 a lt h o u g h 	 w e 	 w e r e	
a bl e 	 t o 	 t a k e 	 s om e 	 mit i g a t i n g 	 a ct i o n s  	 a d v e r s e l y 	 i m p a ct e d	
s a l e s 	 a n d 	 pr o fi t s 	
n o t w it h s t a n d i n g 	 t h o s e 	 c ha l l e n g e s  	 t h e 	 g r o u p 	 c o n t i n u e d 	 t o	
m a k e 	 f u r t h e r 	 go od 	 pr o gr e s s 	 i n c r e a s i n g 	 s a l e s  	 pr o fi t s 	 a n d	
c a s h 	 fl o w  	 b o t h 	 o f 	 o u r 	 d i v i s i o n s 	 p e r f or m e d 	 w e l l  	 w it h 	 o u r	
l e i s u r e 	 d i v i s i o n 	 d e l i v e r i n g 	 a 	 s o l i d 	 i n c r e a s e 	 i n 	 pr o fi t s 	 a n d 	 o u r	
c o n c e s s i o n s 	 d i v i s i o n 	 d e l i v e r i n g 	 a 	 s i g nifi c a n t 	 pr o fi t 	 i n c r e a s e 	
m a r g i n s 	 a l s o 	 h e l d 	 u p 	 w e l l 	 w it h 	 bo t h 	 e bi t d a 	 a n d 	 op e r a t i n g	
m a r g i n s 	 i m pr o v i n g 	 o n 	 t h e 	 pr e v i o u s 	 y e a r  	 t o t a l 	 s a l e s 	 w e r e 	 7 	
a h e a d 	 o f 	 t h e 	 pr e v i o u s 	 y e a r 	  l i k e  f or  l i k e 	 s a l e s 	 w e r e 	 1  	 b e l o w 	
and 	 adjust ed 	 e ar nings 	 pe r 	 shar e 	 incr e ased 	 b y 	 1 4   	 a gainst 	 
a 	 c ha l l e n g i n g 	 b a c k dr op 	 t hi s 	 r e pr e s e n t s 	 a n 	 i m pr e s s i v e	
p e r f or m a n c e 	 a n d 	 bod e s 	 w e l l 	 f or 	 t h e 	 f u t u r e 	
the trg business model and rationale
o u r 	 c or e 	 ob je ct i v e 	 c o n t i n u e s 	 t o 	 b e 	 gr o w t h 	 i n 	 s ha r e h o l d e r	
v alue 	 and 	 our 	 stra t e g y 	 t o 	 achie v e 	 this 	 is 	 t o 	 build 	 a 	 busine s s	
c a p a bl e 	 o f 	 d e l i v e r i n g 	 l o n g  t e r m  	 s u s t a i na bl e 	 a n d 	 gr o w i n g	
c a s h 	 fl o w s  	 t h e 	 g r o u p 	 ha s 	 a 	 c o n s i s t e n t 	 r e c or d 	 o f 	 c o n v e r t i n g	
pr o fi t s 	 i n t o 	 c a s h 	 a t 	 a 	 v e r y 	 h e a lt h y 	 r a t e  	 a n d 	 d e l i v e r i n g	
i n c r e a s i n g 	 c a s h 	 fl o w s 	 e a c h 	 y e a r  	 a n d 	 i n 	 2 0 1 0 	 t hi s 	 w a s 	 a g a i n	
t h e 	 c a s e  	 t r g ’ s 	 b u s i n e s s 	 mod e l 	 e na bl e s 	 t h e 	 g r o u p 	 t o 	 gr o w	
i n 	 a 	 pr e domi na n t l y 	 or g a ni c 	 a n d 	 hi g hl y 	 v a l u e – a c c r e t i v e 	 w a y 	
f u n d e d 	 f r om 	 it s 	 i n t e r na l l y 	 g e n e r a t e d 	 f u n ds 	
o u r 	 t o u c h s t o n e s 	 a r e 	 c a s h 	 fl o w 	 a n d 	 r e t u r n 	 o n 	 i n v e s t m e n t 	 
t hi s 	 mod e l 	 e na bl e s 	 o u r 	 s ha r e h o l d e r s 	 t o 	 e n j o y 	 t h e 	 b e n e fi t s	 
o f 	 hi g h 	 r e t u r n s 	 o n 	 c a pit a l  	 gr o w t h 	 i n 	 pr o fi t s 	 a n d 	 c a s h 	 fl o w	 
a n d 	 s i z e a bl e 	 i n c om e 	 d i s t r i b u t i o n s 	 f r om 	 o u r 	 pr o gr e s s i v e	
d i v i d e n d 	 po l i c y 	
“ 	 o u r 	 c o r e 	 o b j e c t i v e 	 c o n t i n u e s 	 t o	 
b e 	 g r o w t h 	 i n 	 s h a r e h o l d e r 	 v a l u e	 
a n d 	 o u r 	 s t r a t e g y 	 t o 	 a c h i e v e 	 t h i s	 
i s 	 t o 	 b u i l d 	 a 	 b u s i n e s s 	 c a p a b l e 	 o f	
d e l i v e r i n g 	 l o n g  t e r m  	 s u s t a i n a b l e	 
a n d 	 g r o wi n g 	 c a s h fl o w s  ”
chief executive officer’s 
review of operations introduction business review governance financial statements
the restaurant group plc annual report 2010 07 
o u r 	 k e y 	 c r it e r ia 	 i n 	 d e t e r mi n i n g 	 w h e r e 	 t o 	 i n v e s t 	 o u r 	 c a pit a l 	 i s	 
t o 	 op e r a t e 	 r e s t a u r a n t s 	 i n 	 l o c a t i o n s 	 w it h 	 hi g h 	 b a r r i e r s 	 t o 	 e n t r y 	
go od 	 gr o w t h 	 pr o s p e c t s 	 a n d 	 w h e r e 	 w e 	 a r e 	 c o n fi d e n t 	 t ha t 	 w e	
c a n 	 s e c u r e 	 hi g h 	 r e t u r n s 	 o n 	 i n v e s t m e n t  	 o u r 	 f o c u s 	 i s 	 o n 	 e dg e	
of town out of town rural semirural and airport locations 
and 	 w e 	 occup y 	 le a ding 	 mark e t 	 posit ions 	 in 	 the se 	 se gme n ts  	
t h e 	 f o o t pr i n t 	 t ha t 	 t h e 	 g r o u p 	 o c c u pi e s 	 i n 	 e dg e 	 a n d 	 o u t 	 o f	
town leisure and airport locations is comprehensive and from 
a 	 m a r k e t 	 po s it i o ni n g 	 p e r s p e ct i v e  	 v e r y 	 f or mi d a bl e  	 i t 	 w o ul d	 
b e 	 v i r t u a l l y 	 i m po s s i bl e 	 t o 	 r e pl i c a t e 	 t hi s 	 f o o t pr i n t 	 f r om 	 s c r a t c h	
and the group is well placed to continue to roll out more  
new restaurants 
capital expenditure and trg opening programme
o u r 	 phi l o s oph y 	 r e g a r d i n g 	 c a pit a l 	 e x p e n d i t u r e 	 r e m a i n s	
c o n s i s t e n t 	 – 	 w e 	 f o c u s 	 o n 	 c a s h 	 g e n e r a t i o n 	 a n d 	 o n 	 s e c u r i n g	 
a 	 r e tur n 	 on 	 in v e st ed 	 capital 	 a t 	 ra t e s 	 ahe a d 	 o f 	 tr g ’ s 	 w e igh t ed	
a v e r a g e 	 c o s t 	 o f 	 c a pit a l  	 w e 	 ha v e 	 c o n t i n u e d 	 t o 	 a ppl y 	 t h e	 
s a m e 	 l e v e l s 	 o f 	 a na l y t i c a l 	 r i go u r  	 c om m e r c ia l 	 a na l y s i s 	
e x p e r i e n c e 	 a n d 	 r i s k 	 a d j u s t m e n t 	 t o 	 e a c h 	 c a pit a l 	 pr o je ct	 
that we undertake this approach has served trg well  
and we do not intend to deviate from it 
o u r 	 f r e e 	 c a s h 	 fl o w 	 g e n e r a t i o n 	 i s 	 s u f fi c i e n t 	 t o 	 e na bl e 	 t h e	
g r oup 	 t o 	 fund 	 35 	 t o 	 45 	 ne w 	 r e stauran ts 	 per 	 annum	 
whilst 	 main taining 	 main t e nance 	 capital 	 e xpe nditur e 	 a t 	 the 	
a ppr opr ia t e 	 l e v e l 	 a n d 	 p u r s ui n g 	 a 	 pr o gr e s s i v e 	 d i v i d e n d 	 po l i c y 	
ho w e v e r  	 t h e 	 l e v e l 	 o f 	 n e w 	 d e v e l opm e n t 	 a ct i v it y 	  p a r t i c ula r l y	
e dg e 	 a n d 	 o u t 	 o f 	 t o w n 	 d e v e l opm e n t s  	 w it hi n 	 o u r 	 s e ct or 	 i s	 
s t i l l 	 w e l l 	 b e l o w 	 t h e 	 l e v e l s 	 w e 	 s a w 	 pr i or 	 t o 	 t h e 	 o n s e t 	 o f 	 t h e	
r e c e s s i o n  	 a t 	 t hi s 	 s t a g e 	 o f 	 t h e 	 e c o n omi c 	 c y c l e 	 t hi s 	 i s 	 n o t	
u n u s u a l 	 a n d 	 w hi l s t 	 t h e r e 	 ha s 	 b e e n 	 a 	 pi c k 	 u p 	 i n 	 n e w	
d e v e l opm e n t 	 a ct i v it y 	 i n 	 s om e 	 s e ct or s  	 t hi s 	 ha s 	 n o t 	 y e t	
g a t h e r e d 	 p a c e 	 w it hi n 	 o u r 	 s e ct or  	 ho w e v e r  	 t h e r e 	 i s 	 a	
s i g nifi c a n t 	 n u m b e r 	 o f 	 s c h e m e s 	 t ha t 	 d e v e l op e r s 	 ha v e 	 i n 	 t h e	
“ pi p e l i n e ” 	 a n d 	 w e 	 a r e 	 c o n fi d e n t 	 t ha t  	 a t 	 s om e 	 po i n t  	 t h e s e 	 w i l l	
be 	 act iv a t ed  	 t he 	 ca taly sts 	 f or 	 this 	 ar e 	 lik ely 	 t o 	 be 	 e vide nce 	 o f	
t h e 	 c o n s u m e r 	 m a r k e t pla c e 	 r e t u r ni n g 	 t o 	 s t e a d y 	 gr o w t h 	 a n d	
a ppr opr ia t e 	 f u n d i n g 	 b e i n g 	 a v a i la bl e  	 a t 	 t hi s 	 s t a g e 	 it 	 i s 	 d i f fi c ult	
t o 	 pr edict 	 whe n 	 this 	 migh t 	 be 	 but  	 if 	 the 	 pa t t er n 	 o f 	 pr e vious	
e c o n omi c 	 r e c o v e r i e s 	 i s 	 f o l l o w e d  	 it 	 i s 	 l i k e l y 	 t o 	 b e 	 w it hi n 	 t h e	
n e x t 	 t w o 	 y e a r s 	
in 	 the 	 me an t ime  	 w e 	 will 	 con tinue 	 t o 	 ide n t if y 	 and 	 judiciously	
p u r s u e 	 o t h e r 	 oppor t u nit i e s 	 w hi c h 	 w e 	 a r e 	 c o n fi d e n t 	 w i l l 	 m e e t	
o u r 	 r e t u r n s 	 c r it e r ia  	 t hi s 	 i s 	 l i k e l y 	 t o 	 m e a n 	 t ha t 	 n e w 	 op e ni n gs	
f or 	 2 0 1 1 	 w i l l 	 b e 	 a t 	 a 	 br o a d l y 	 s i mi la r 	 l e v e l 	 t o 	 la s t 	 y e a r ’ s 	 a n d  	 f or	
the 	 t ime 	 be ing  	 w e 	 plan 	 t o 	 con tinue 	 t o 	 apply 	 our 	 sur plus 	 cash	
fl o w 	 t o w a r ds 	 r e du c i n g 	 n e t 	 d e b t  	 t hi s 	 f e l l 	 b y 	 a 	 f u r t h e r 	 £ 2 0 m	
o v e r 	 the 	 past 	 y e ar 	 t o 	 £ 4 7 m 	
results
 	 	 r e s u l t s 	 m a r k e d 	 a s 	 a d j u s t e d 	 a r e 	 s t a t e d 	 e x c l u d i n g 	 n o n  t r a d i n g 	 i t e m s	
 refe r 	 t o 	 no t e 	 2 
t r g ’ s 	 t r a d i n g 	 m e t r i c s 	 p e r f or m e d 	 w e l l 	 f or 	 t h e 	 5 3 	 w e e k 	 p e r i od	
t o 	 2 	 januar y 	 2 0 1 1 
	 t o tal 	 sale s 	 incr e ased 	 b y 	 7  	  lik e  f or  lik e 	 sale s 	 w e r e	 •	
1  	 l o w e r  	 a n d 	 w e 	 s o l d 	 3 7 	 mi l l i o n 	 m e a l s 	
a d j u s t e d 	 e bi t d a 	 i n c r e a s e d 	 b y 	 8  	 t o 	 £ 8 6 m  •	
a d j u s t e d 	 pr e  t a x 	 pr o fi t 	 i n c r e a s e d 	 b y 	 1 2  	 t o 	 £ 5 6 m  •	
	 g r o u p 	 op e r a t i n g 	 pr o fi t 	 m a r g i n s 	 i n c r e a s e d 	 b y 	 4 0 bp 	 t o	 •	
1 2  6   	 a n d	
	 n e t 	 d e b t  	 a t 	 0  5 5 x 	 g r o u p 	 a d j u s t e d 	 e bi t d a  	 f e l l 	 b y 	 £ 2 0 m	 •	
t o 	 £ 4 7 m 
occupying 
leading 
market 
positions 08 the restaurant group plc annual report 2010
chief executive officer’s  
review of operations 
continued
leisure
2010 2009
total revenue £3737m £ 353  6 m
o p e rat ing 	 pr o fit £729m £691 m
o p e rat ing 	 ma rgin 195 195
frankie  benny’s 197 units 
f r a nk i e 	  	 b e nn y ’ s 	 p e r f or m e d 	 w e l l 	 i n 	 2 0 1 0  	 i n c r e a s i n g	
r e v e nue s  	 mar gins 	 and 	 pr o fits  	 w e 	 ope ned 	 nine 	 ne w 	
r e stauran ts 	 o f 	 which 	 fiv e 	 w er e 	 on 	 noncinema 	 sit e s  	 a ll 	 o f 	 
o u r 	 n e w 	 op e ni n gs 	 a r e 	 t r a d i n g 	 s u p e r bl y 	 a n d 	 a r e 	 s e t 	 t o 	 d e l i v e r	
s t r o n g 	 r e t u r n s  	 o u r 	 f o c u s 	 c o n t i n u e s 	 t o 	 b e 	 d i r e ct e d 	 t o w a r ds	
pr o v i d i n g 	 o u r 	 c u s t om e r s 	 w it h 	 a 	 gr e a t 	 d i ni n g 	 e x p e r i e n c e 	 –	
pl e n t y 	 o f 	 c h o i c e 	 a c r o s s 	 t h e 	 pr i c e 	 po i n t s  	 o f f e r i n gs 	 g e a r e d	
t o w a r ds 	 s p e c ifi c 	 p a r t s 	 o f 	 t h e 	 d a y  	 go od 	 v a l u e 	 a n d 	 s u p e r b	
h o s pit a l it y 	 a n d 	 s e r v i c e  	 a s 	 w it h 	 a l l 	 o u r 	 br a n ds  	 w e 	 e s c h e w e d	
d e e p 	 d i s c o u n t i n g 	 a n d 	 t hi s 	 h e l p e d 	 t o 	 d e l i v e r 	 a 	 s t r o n g 	 m a r g i n	
a n d 	 pr o fi t 	 p e r f or m a n c e  	 w e 	 a n t i c i p a t e 	 op e ni n g 	 b e t w e e n	 
1 2 	 a n d 	 1 5 	 n e w 	 f r a nk i e 	  	 b e nn y ’ s 	 r e s t a u r a n t s 	 i n 	 2 0 1 1 	
chiquito 68 units
c hi quit o 	 p e r f or m e d 	 s o l i d l y 	 du r i n g 	 2 0 1 0 	 a lt h o u g h 	 pr o fi t s	 
w e r e 	 a 	 l it t l e 	 b e l o w 	 t h e 	 pr i or 	 y e a r ’ s 	 l e v e l  	 d u r i n g 	 t h e 	 y e a r 	 w e	
a b s or b e d 	 i np u t 	 c o s t 	 i n c r e a s e s 	 i n 	 or d e r 	 t o 	 m a i n t a i n 	 m e n u	
prices at a level appropriate for the locations in which most  
o f 	 o u r 	 c hi quit o 	 r e s t a u r a n t s 	 op e r a t e  	 w e 	 op e n e d 	 fi v e 	 n e w	
chiquit o 	 r e stauran ts 	 during 	 the 	 y e ar 	 all 	 o f 	 which 	 ar e 	 loc a t ed	
a l o n gs i d e 	 f r a nk i e 	  	 b e nn y ’ s  	 t hi s 	 du a l 	 r o l l 	 o u t 	 s t r a t e g y 	 ha s	
w or k ed 	 w e ll 	 and 	 w e 	 e xpe ct 	 it 	 t o 	 con t inue 	 in 	 2 0 1 1  	 t he 	 ne w	
ope nings 	 ar e 	 pe r f orming 	 ahe a d 	 o f 	 our 	 e xpe cta tions 	 and 	 ar e	
s e t 	 t o 	 d e l i v e r 	 s t r o n g 	 r e t u r n s  	 d u r i n g 	 2 0 1 1 	 w e 	 e x p e ct 	 t o 	 op e n	
34 	 ne w 	 chiquit o 	 r e stauran ts 	
consistently 
good value 
service and 
hospitality
pub restaurants 43 units
p u b 	 r e s t a u r a n t s 	 t r a d e d 	 w e l l 	 du r i n g 	 2 0 1 0  	 i n c r e a s i n g 	 m a r g i n s	
a n d 	 pr o fi t s  	 w e 	 ha v e 	 c o n t i n u e d 	 o u r 	 pr o gr a m m e 	 o f 	 mod i f y i n g	
t h e 	 f or m e r 	 b l u b e c k e r s 	 s it e s 	 t o 	 br i n g 	 t h e m 	 mor e 	 i n t o 	 l i n e 	 w it h	
t h e 	 b r u nni n g 	  	 p r i c e 	 s t y l e 	 o f 	 op e r a t i o n 	 a n d 	 t h e 	 s u b s e qu e n t	
r e sults 	 ha v e 	 be e n 	 v e r y 	 e ncouraging  	 w e 	 e x pe ct 	 t o 	 comple t e 	
t hi s 	 pr o gr a m m e 	 du r i n g 	 2 0 1 1  	 i n 	 d e c e m b e r 	 w e 	 op e n e d 	 a 	 n e w	
p u b 	 r e s t a u r a n t  	 t h e 	 n e v i l l 	 cr e s t 	  	 g u n  	 n e a r 	 t u nbr i dg e 	 w e l l s 	
i t 	 i s 	 t r a d i n g 	 s u p e r bl y 	 a n d 	 i s 	 s e t 	 t o 	 d e l i v e r 	 s t r o n g 	 r e t u r n s 	
d u r i n g 	 2 0 1 1 	 w e 	 e x p e ct 	 t o 	 op e n 	 2  3 	 n e w 	 p u b 	 r e s t a u r a n t s 	
garfunkel’s 23 units 
gar f unk e l ’ s 	 pe r f or med 	 supe r bly 	 dur ing 	 2 0 1 0 	 de liv e r ing	 
a 	 signific an t 	 incr e ase 	 in 	 mar gins 	 and 	pr o fits  	 t he 	 busine s s 	
trade s 	 pr edominan tly 	 in 	 ce n tral 	 london 	 close 	 t o 	 the a tr e s 	
s h oppi n g 	 d i s t r i c t s 	 a n d 	 o t h e r 	 t o u r i s t 	 a t t r a ct i o n s  	 d u r i n g 	 t h e	
y e a r 	 w e 	 op e n e d 	 t w o 	 n e w 	 r e s t a u r a n t s 	 a n d 	 t h e s e 	 a r e 	 t r a d i n g	
w e ll 	 and 	 ar e 	 se t 	 t o 	 de liv e r 	 str ong 	 r e tur ns  	 w e 	 e x pe ct 	 t o 	 ope n	
u p 	 t o 	 t hr e e 	 n e w 	 g a r f u nk e l ’ s 	 r e s t a u r a n t s 	 du r i n g 	 2 0 1 1 	 introduction business review governance financial statements
the restaurant group plc annual report 2010 09 
o ur 	 conce ssions 	 busine ss  	 de spit e 	 ha ving 	 t o 	 cope 	 with	
d e c l i ni n g 	 p a s s e n g e r 	 n u m b e r s 	  “ p a x ”  	 a n d 	 e x c e p t i o na l	
m e t e or o l o g i c a l 	 e v e n t s  	 ha d 	 a n 	 e x c e l l e n t 	 y e a r 	 a n d 	 d e l i v e r e d	 
a 	 r e c or d 	 l e v e l 	 o f 	 pr o fi t s 	
t r a d i n g 	 i n 	 t h e 	 a i r por t s 	 m a r k e t pla c e 	 r e m a i n e d 	 t o u g h 	 i n 	 2 0 1 0	
with 	 pa x 	 de clining 	 f or 	 a 	 third 	 y e ar 	  albeit 	 a t 	 a 	 much 	 slo w e r 	 ra t e	
o f 	 d e c l i n e 	 c om p a r e d 	 t o 	 2 0 0 9   	 o u r 	 e f f or t s 	 ha v e 	 b e e n 	 f o c u s e d	
o n 	 i m pr o v i n g 	 o u r 	 o f f e r i n g  	 hi g h 	 l e v e l s 	 o f 	 c u s t om e r 	 s e r v i c e 	 a n d	
t i g h t 	 c o s t 	 c o n t r o l s 	 w it h 	 t h e 	 ob je ct i v e 	 o f 	 i m pr o v i n g 	 m a r g i n s	
a n d 	 gr o w i n g 	 pr o fi t s  	 t hi s 	 a ppr o a c h 	 s e r v e d 	 u s 	 w e l l 	 du r i n g	
2 0 1 0 	 a n d 	 t h e 	 c o n c e s s i o n s 	 d i v i s i o n 	 pr odu c e d 	 a 	 r e c or d 	 l e v e l	 
o f 	 e bi t d a 	  £ 1 8  8 m  	 a n d 	 pr o fi t s 	 o f 	 £ 1 4  2 m  	 r e pr e s e n t i n g 	 a n	
i n c r e a s e 	 o f 	 2 9  	 o n 	 t h e 	 pr e v i o u s 	 y e a r  	 o u r 	 a bi l it y 	 t o 	 op e r a t e	
e f f e ct i v e l y 	 a n d 	 pr o fi t a bl y 	 i n 	 t hi s 	 m a r k e t 	 s e gm e n t  	 a n d 	 i n	
c ha l l e n g i n g 	 c o n d it i o n s  	 d e mo n s t r a t e s 	 o u r 	 hi g h 	 l e v e l s 	 o f	
e x p e r t i s e 	 a n d 	 o u r 	 c om mit m e n t 	 t o 	 t h e 	 a i r por t s 	 m a r k e t pla c e 	
w e 	 o c c u p y 	 t h e 	 l e a d i n g 	 m a r k e t 	 po s it i o n 	 i n 	 t h e 	 u k 	 a i r por t s 	 a n d	
ha v e 	 a 	 c o n s i s t e n t 	 t r a c k 	 r e c or d 	 o f 	 d e l i v e r i n g 	 e x c e l l e n t 	 r e s ult s 	
a s 	 e c o n omi c 	 gr o w t h 	 r e s u m e s  	 w e 	 a n t i c i p a t e 	 a n 	 i m pr o v i n g	
t r e n d 	 i n 	 p a x 	 a n d 	 t hi s 	 w i l l 	 b e n e fi t 	 o u r 	 c o n c e s s i o n s 	 b u s i n e s s 	
d ur ing 	 the 	 y e ar 	 w e 	 ope ned 	 se v e n 	 ne w 	 sit e s 	 – 	 the se 	 ar e	
t r a d i n g 	 w e l l 	 a n d 	 a r e 	 s e t 	 t o 	 d e l i v e r 	 go od 	 r e t u r n s  	 w e 	 e x p e ct	 
t o 	 op e n 	 b e t w e e n 	 t w o 	 a n d 	 f o u r 	 n e w 	 c o n c e s s i o n s 	 s it e s 	 i n 	 2 0 1 1 	
concessions 58 units
2010 2009
total revenue £920m £ 822m
o p e rat ing 	 pr o fit £142m £11 0m
o p e rat ing 	 ma rgin 155 1 3 4
sticking to 
our areas of 
expertise 10 the restaurant group plc annual report 2010
market dynamics and the economy
f or 	 mo s t 	 p e opl e  	 e a t i n g 	 o u t 	 ha s 	 b e c om e 	 a 	 ha bit u a l 	 a ct i v it y	
a n d 	 i s 	 s om e t hi n g 	 t ha t 	 t h e y 	 a r e 	 r e l u ct a n t 	 t o 	 g i v e 	 u p  	 d e s pit e	
t h e 	 c ha l l e n g i n g 	 e c o n omi c 	 c o n d it i o n s 	 t ha t 	 ha v e 	 c ha r a ct e r i s e d	
t h e 	 u k 	 s i n c e 	 2 0 0 8  	 t h e 	 pr op e n s it y 	 f or 	 p e opl e 	 t o 	 e a t 	 a w a y	
from their homes has continued this is a secular trend 
dr i v e n 	 la r g e l y 	 b y 	 s o c i o  e c o n omic 	 f a ct or s  	 e a t i n g 	 o u t	
c o n s t it u t e s 	 a 	 “ s m a l l 	 t i c k e t ” 	 it e m 	 w hi c h 	 a b s or b s 	 a 	 r e la t i v e l y	
s m a l l 	 pr opor t i o n 	 o f 	 d i s po s a bl e 	 i n c om e  	 w e 	 e x p e ct 	 t hi s	 
t r e n d 	 t o 	 c o n t i n u e 	 a n d 	 t hi s 	 a u gu r s 	 w e l l 	 f or 	 t h e 	 f u t u r e 	
dur ing 	 2 0 1 0  	 our 	 se ct or 	 con tinued 	 t o 	 be 	 charact erised 	 
b y 	 s i g nifi c a n t 	 a n d 	 o f t e n 	 d e e p 	 d i s c o u n t i n g  	 “ b u y 	 o n e 	 g e t	 
o n e	f r e e ”	a n d	s i m i l a r	t y p e s	o f	p r o m o ti o n s	h a v e	b e e n	
c om mo npla c e 	 a n d 	 c o n t i n u e 	 t o 	 b e 	 u s e d 	 f r e qu e n t l y 	 b y 	 m a n y	
o th e r	c o m p a n i e s 	o u r	a p p r o a c h	h a s	b e e n	t o	a v o i d	th e	 
d e e p 	 d i s c o u n t i n g 	 “ t r e a dmi l l ”  	 r a t h e r  	 t o 	 g i v e 	 o u r 	 c u s t om e r s	
c o n s i s t e n tl y	g o o d	v a l u e 	s e r v i c e	a n d	h o s p i t a l i t y	a n d	t o	
br o a d e n 	 t h e 	 a ud i e n c e 	 o f 	 po t e n t ia l 	 c u s t om e r s  	 pr e domi na n t l y	
th r o u g h	i n c r e a s e d	u s e	o f	d i g i t a l	m a r k e ti n g	t e c h n i q u e s 	 
d u r i n g 	 2 0 1 0 	 w e 	 s i g nifi c a n t l y 	 i n c r e a s e d 	 m a r k e t i n g 	 a c r o s s	
s o c ia l 	 n e t w or k i n g 	 w e b s it e s  	 e  m a r k e t e r s 	 a n d 	 s m a r t ph o n e	
applications and these have had a positive impact on 
revenues this approach has meant that we have continued 
t o 	 f o c u s 	 o n 	 m a i n t a i n i n g 	 a n d 	 i m pr o v i n g 	 m a r g i n s  	 gr o w i n g	
pr o fi t s 	 a n d 	 c a s h 	 fl o w s 	 a n d  	 v e r y 	 i m por t a n t l y  	 s e c u r i n g 	 hi g h	
returns on our invested capital 
as 	 the 	 uk 	 climbs 	 out 	 o f 	 r e ce ssion  	 the 	 macr oe conomic	
pi ct u r e 	 i s 	 b e c omi n g 	 c l e a r e r  	 a lt h o u g h 	 it 	 i s 	 n o t 	 a n 	 i m m e d ia t e l y	
a t t r a ct i v e 	 la n ds c a p e 	 it 	 i s 	 a 	 m u c h 	 l e s s 	 d a r k 	 a n d 	 bl e a k 	 s c e na r i o	
t ha n 	 t h e 	 o n e 	 f a c e d 	 a t 	 t h e 	 b e g i nni n g 	 o f 	 2 0 0 9  	 t h e 	 u k 	 ha s	
star t ed 	 t o 	 e me r ge 	 fr om 	 the 	 de epe st 	 r e ce ssion 	 se e n 	 f or 	
se v e ral 	 ge ne ra t ions 	 and  	 although 	 during 	 the 	 final 	 quar t e r 	 
o f 	 2 0 1 0 	 t h e 	 r e c o v e r y 	 l o s t 	 s om e 	 t r a ct i o n 	  m a i nl y 	 du e 	 t o 	 t h e	
se v e r e 	 uk 	 w e a the r 	 the 	 pa t t er n 	 se ems 	 t o 	 be 	 f ollo wing	 
a 	 br oadly 	 similar 	 tr e nd 	 t o 	 tha t 	 se e n 	 in 	 the 	 e arly 	 1 99 0 ’ s 	
t h e	g o v e r n m e n t	h a s	c o m m i t t e d	t o	s i g n i fi c a n t	c h a n g e s	i n	
s p e n d i n g	a n d	t a x a ti o n	a n d	th e	i m p a c t	o f	th e s e	w i l l	b e	fe l t	
d u r i n g	2 0 1 1 	a	l a r g e	p a r t	o f	th e	fi s c a l	s q u e e z e	i s	b e i n g	
e f fe c t e d	th r o u g h	s p e n d i n g	 c u ts	w h i c h 	i n	r e a l	t e r m s 	l o o k	
q u i t e	d e e p	 a l th o u g h	th e s e	a r e	l e s s	d r a c o n i a n	i n	n o m i n a l	
t e r m s  	i t	i s	l i k e l y	th a t	th e s e	c u ts	w i l l	h a v e	a n	i m p a c t	u p o n	
e m p l o y m e n t	l e v e l s	i n	th e	p u b l i c	s e c t o r	a n d 	p o t e n ti a l l y 	 
those 	 par ts 	 o f 	 the 	 pr iv a t e 	 se ct or 	 whe r e 	 the r e 	 is 	 a 	 high 	 le v el	 
o f	d e p e n d e n c y	u p o n	g o v e r n m e n t	c o n tr a c ts 	t h e r e	i s	 
a	c l e a r	e x p e c t a ti o n	th a t	th e	s l a c k	w h i c h	th i s	m a y	c r e a t e	w i l l	 
b e	a b s o r b e d	b y	th e	p r i v a t e	s e c t o r 	c e r t a i n l y 	c o r p o r a ti o n s	
h a v e	s i g n i fi c a n tl y	s t e p p e d	u p	c a p i t a l	s p e n d i n g 	a n d	m a n y	
e x p o r t e r s	a r e	th r i v i n g 	w h i c h	s h o u l d	b e	p o s i ti v e	f o r	
e m p l o y m e n t 	h o w e v e r 	e x p e c t a ti o n s	f o r	g r o w th	i n	c o n s u m e r	
spend are in the shortterm more modest there are 
s e v e r a l	f a c t o r s	i m p a c ti n g	c o n s u m e r	 s p e n d 	i n c l u d i n g	h i g h e r	
l e v e l s	o f	t a x a ti o n	 b o th	d i r e c t	a n d	i n d i r e c t  	u n e m p l o y m e n t	
l e v e l s	a p p r o a c h i n g	8 	 th e	fe a r	o f	u n e m p l o y m e n t	a l s o	
r e m a i n s	a	c o n c e r n	f o r	m a n y	u k	h o u s e h o l d s 	a n d	r i s i n g	
h o u s e h o l d	i n fl a ti o n 	t h i s	l a t t e r	p o i n t	h a s	b e c o m e	v e r y	
t o p i c a l	r e c e n tl y	a n d	c o n v e n t i o n a l	w i s d o m	w o u l d	s u g g e s t	 
a n	i n c r e a s e	i n	i n t e r e s t	r a t e s	t o	c o u n t e r	i n fl a ti o n 	h o w e v e r 	 
i t	a p p e a r s	th a t 	a s	th e	e c o n o m i c	r e c o v e r y	i s	s t i l l	i n	i ts	e a r l y	
s t a g e s	a n d	w i th	th e	i n fl a ti o n	i n d i c e s	b e i n g	s i g n i fi c a n tl y	
i m p a c t e d	b y	v a t	i n c r e a s e s	a n d	“ i m p o r t e d ”	i n fl a ti o n 	th e	
m o n e t a r y	p o l i c y	c o m m i t t e e	 “ m p c ” 	a p p e a r s	i n c l i n e d	t o	
m a i n t a i n	a	r e l a x e d	m o n e t a r y	s t a n c e 	p e r h a p s	i n	p a r t	t o	
r e d u c e	th e	r i s k	o f	 p r e c i p i t a ti n g	a	s h a r p	s l o w d o w n	i n	
e c o n o m i c	g r o w th	w i th	th e	c o n c o m i t a n t	r i s k	o f	d e fl a ti o n 	 
i f	i n t e r e s t	r a t e s	r i s e	o n l y	m o d e s tl y	a n d	m o r t g a g e	r a t e s	
r e m a i n	a t	l o w	l e v e l s	th i s	w i l l 	t o	a	s i g n i fi c a n t	d e g r e e 	c o n t i n u e	
t o	s u p p o r t	h o u s e h o l d s ’	d i s c r e ti o n a r y	s p e n d	l e v e l s	a n d 	
p r o v i d i n g	e m p l o y m e n t	l e v e l s	d o	n o t	d e t e r i o r a t e 	th i s	s h o u l d	
e n a b l e	c o n s u m e r	c o n fi d e n c e	t o	b u i l d 	i n i t i a l l y	th i s	i s	l i k e l y	 
t o	b e	g r a d u a l 	a l th o u g h	o n c e	i t	b e c o m e s	e v i d e n t	th a t	
u n e m p l o y m e n t	l e v e l s	a r e	n o t	d r a m a ti c a l l y	i n c r e a s i n g	 
 a n d	a s	th e	fe a r	o f	u n e m p l o y m e n t	d i m i n i s h e s 	th e	 
r e c o v e r y	i n	c o n s u m e r	c o n fi d e n c e	s h o u l d	g a th e r	p a c e 	
chief executive officer’s  
review of operations 
continued introduction business review governance financial statements
the restaurant group plc annual report 2010 11 
c o s t 	 i n fla t i o n 	 a l s o 	 po s e s 	 c ha l l e n g e s 	 f or 	 o u r 	 s e ct or  	 a lt h o u g h	
this 	 is 	 no t 	 a 	 ne w 	 phe nome non  	 during 	 much 	 o f 	 the 	 last	
d e c a d e  	 o u r 	 s e ct or 	 o f t e n 	 e x p e r i e n c e d 	 c o s t 	 pr e s s u r e s	
 e s p e c ia l l y 	 w it h 	 t h e 	 s i g nifi c a n t 	 a nn u a l 	 i n c r e a s e s 	 i n 	 t h e	
mi ni m u m 	 w a g e  	 a n d 	 i n 	 2 0 0 7 	 a n d 	 2 0 0 8 	 f o od 	 i np u t 	 c o s t s	
i n c r e a s e d 	 quit e 	 qui c k l y  	 c u r r e n t l y 	 t h e r e 	 i s 	 r e la t i v e l y 	 l o w	 
w a g e 	 c o s t 	 pr e s s u r e  	 b u t 	 a l s o 	 s om e 	 r i s k 	 t ha t 	 i n fla t i o na r y	
e x p e ct a t i o n s 	 c o ul d 	 f e e d 	 t hr o u g h 	 i n t o 	 u k 	 w a g e 	 b a r g a i ni n g 	
c om mod it y 	 pr i c e s 	  i n c l ud i n g 	 f o od 	 a n d 	 o i l  	 ha v e 	 r i s e n 	 a n d	 
t hi s 	 t r e n d 	 i s 	 e x p e ct e d 	 t o 	 c o n t i n u e  	 t r g ’ s 	 a ppr o a c h 	 ha s  	 f or	
se v e ral 	 y e ars  	 be e n 	 t o 	 pr o t e ct 	 the 	 busine ss 	 fr om 	 rising 	 input	
c o s t s 	 b y 	 t a k i n g 	 o u t 	 fi x e d 	  or 	 c a pp e d  	 pr i c e 	 c o n t r a ct s 	 w it h	
s u ppl i e r s  	 a t 	 pr e s e n t 	 o v e r 	 5 0  	 o f 	 o u r 	 i np u t 	 c o s t s 	 ha v e 	 fi x e d	
 or 	 c a pp e d  	 pr i c e s 	 f or 	 o n e 	 y e a r  	 a n d 	 a ppr o x i m a t e l y 	 o n e 	 t hi r d	
a r e 	 fi x e d 	  or 	 c a pp e d  	 f or 	 t w o 	 y e a r s  	 t hi s 	 a ppr o a c h 	 ha s 	 s e r v e d	
us well and is one that we intend to continue
future prospects
w e 	 a r e 	 pla nni n g 	 o n 	 t h e 	 b a s i s 	 t ha t 	 t h e 	 o u t l o ok 	 f or	 
c o n s u m e r  f a c i n g 	 b u s i n e s s e s 	 c o n t i n u e s 	 t o 	 r e m a i n 	 a s	
c ha l l e n g i n g 	 du r i n g 	 2 0 1 1 	 a s 	 it 	 w a s 	 la s t 	 y e a r 	 a n d 	 w e 	 ha v e	
f r a m e d 	 o u r 	 pla n s 	 a c c or d i n gl y  	 o u r 	 b u s i n e s s 	 ha s 	 e x p e r i e n c e d	
s om e 	 v e r y 	 t o u g h 	 t r a d i n g 	 c o n d it i o n s 	 o v e r 	 t h e 	 p a s t 	 t w o 	 y e a r s	
and 	 dur ing 	 tha t 	 time 	 sale s  	 pr o fits 	 and 	 cash 	 flo w 	 all 	 gr e w  	
t r g 	 i s 	 w e l l 	 pla c e d 	 t o 	 c op e 	 w it h 	 c ha l l e n g i n g 	 c o n d it i o n s 	 a n d 	
v er y 	 impor tan t ly  	 t o 	 be nefit 	 substan tially 	 fr om 	 the 	 up tur n 	 
i n 	 c o n s u m e r 	 c o n fi d e n c e 	 t ha t 	 w i l l  	 i n 	 du e 	 c o u r s e  	 pr e v a i l 	
t r g ’ s 	 b u s i n e s s e s 	 c om m a n d 	 s t r o n g 	 m a r k e t 	 po s it i o n s 	 i n 	 e a c h	
o f 	 our 	 chose n 	 se gme n ts 	 and 	 our 	 brands 	 ar e 	 w ell 	 r e cognised	
f or 	 t h e 	 qu a l it y 	 a n d 	 v a l u e 	 o f 	 o u r 	 o f f e r i n gs  	 w e 	 ha v e 	 a 	 r ob u s t	
a n d 	 w e l l 	 pr o v e n 	 b u s i n e s s 	 mod e l  	 a 	 s t r o n g 	 b a la n c e 	 s h e e t 	 a n d	
w e 	 a r e 	 w e l l 	 po s it i o n e d 	 t o 	 c o n t i n u e 	 o u r 	 e x p a n s i o n  	 j u s t 	 a s 	 w e	
d i d 	 i n 	 2 0 1 0  	 du r i n g 	 2 0 1 1 	 w e 	 w i l l 	 c o n t i n u e 	 t o 	
stick 	 t o 	 our 	 ar e as 	 o f 	 e xper tise  •	
	 f o c u s 	 o n 	 o u r 	 c u s t om e r s 	 b y 	 pr o v i d i n g 	 e x c e l l e n t 	 v a l u e	 •	
a nd 	 se r v ic e 
	 main tain 	 high 	 standar ds 	 o f 	 opera tional 	 e f ficie ncy 	 •	
a nd 	 e x e cu t io n 
car e fully 	 con tr ol 	 our 	 costs  •	
a dd 	 hi g h 	 qu a l it y 	 n e w 	 r e s t a u r a n t s 	 t o 	 o u r 	 por t f o l io  	 a n d	 •	
c o n t i n u e 	 t o 	 f o c u s 	 o n 	 c a s h 	 fl o w 	 a n d 	 r e t u r n s 	 •	
b y 	 s o 	 do i n g  	 o u r 	 a i m s 	 a r e 	 t o 	 c o n t i n u e 	 t o 	 s t r e n g t h e n 	 o u r	
m a r k e t 	 po s it i o n s 	 a n d 	 d e l i v e r 	 l o n g  t e r m 	 a n d 	 s u s t a i na bl e	
pr o fi t a bl e 	 gr o w t h 	
t h e 	 d i f fi c ult i e s 	 o u r 	 t e a m 	 f a c e d 	 du r i n g 	 2 0 1 0 	 w e r e 	 s i g nifi c a n t	
b u t  	 a s 	 a lw a y s  	 o u r 	 p e opl e 	 r o s e 	 t o 	 t h e 	 c ha l l e n g e 	 a n d 	 d e l i v e r e d	
a	v e r y	i m p r e s s i v e	p e r f o r m a n c e 	w e	a r e	v e r y	f o r tu n a t e	 
t o	h a v e	a n	o u ts t a n d i n g	a n d	l o y a l	t e a m	a t	t r g	a n d	i	a m	
con fide n t 	 tha t 	 the y 	 will 	 be 	 w or k ing 	 t o w ards 	 de liv e r ing 	 ano ther 	
s t r o n g 	 p e r f or m a n c e 	 t hi s 	 y e a r  	 t h e 	 c u r r e n t 	 y e a r 	 ha s 	 s t a r t e d	
w e l l  	 w it h 	 l i k e  f or  l i k e 	 s a l e s 	 gr o w i n g 	 i n 	 e a c h 	 o f 	 t h e 	 fi r s t 	 t w o	
mon ths 	 and  	 a f t e r 	 nine 	 w e e k s  	 t o tal 	 sale s 	 ar e 	 8  	 ahe ad 	 o f	
la s t 	 y e a r 	  l i k e  f or  l i k e 	 s a l e s 	 u p 	 3    	 w e 	 a r e 	 l o ok i n g 	 t o 	 b ui l d	
f ur the r 	 on 	 this 	 as 	 the 	 y e ar 	 pr ogr e s se s 
andrew page
chie f 	 e x e cut iv e 	 o f fice r
9 march 2011
a robust  
and well  
proven  
business  
model 12 the restaurant group plc annual report 2010
group finance  
director’s report
results 
a g a i n s t 	 t h e 	 b a c k dr op 	 o f 	 a n o t h e r 	 c ha l l e n g i n g 	 y e a r 	 i n 	 t e r m s 	 o f	
t h e 	 e c o n omi c 	 e n v i r o nm e n t  	 t h e 	 g r o u p 	 ha s 	 r e c or d e d 	 a 	 v e r y	
s a t i s f a ct or y 	 s e t 	 o f 	 r e s ult s  	 f or 	 t h e 	 s t a t u t or y 	 5 3 	 w e e k 	 fi na n c ia l	
y e a r  	 t o t a l 	 s a l e s 	 o f 	 £ 4 65  7 m 	 i n c r e a s e d 	 b y 	 7  	 c om p a r e d 	 t o	 
t h e 	 pr i or 	 y e a r  	 g r o u p 	 e bi t d a 	 w a s 	 £ 8 5  8 m  	 a n 	 i n c r e a s e 	 o f 	 8 	
o n 	 t h e 	 pr i or 	 y e a r  	 t o t a l 	 d e pr e c ia t i o n 	 c ha r g e s 	 w e r e 	 £ 2 7  2 m	
 2 0 0 9  	 £ 2 6  3 m   	 r e s ult i n g 	 i n 	 a d j u s t e d 	 op e r a t i n g 	 pr o fi t s 	 o f	
£ 5 8  6 m  	 an 	 incr e ase 	 o f 	 almost 	 1 0  	 on 	 the 	 pr ior 	 y e ar 
g r oup 	 ope ra ting 	 mar gin 	 in 	 the 	 y e ar 	 w as 	 1 2  6   	 an 	 incr e ase 	
o f 	 4 0 	 b a s i s 	 po i n t s 	 c om p a r e d 	 t o 	 t h e 	 pr i or 	 y e a r  	 t hi s 	 w a s	
achie v ed 	 thr ough 	 con tinuing 	 f ocus 	 on 	 the 	 cost 	 base  	 close	
m a n a g e m e n t	o f	p r o c u r e m e n t	c o s ts	a n d	o p e r a t i o n a l	
e f ficie ncie s 	 acr os s 	 the 	 busine s s  	 t he 	 g r oup ’ s 	 mar gins 	 ha v e 	
a l s o 	 b e n e fi t e d 	 f r om 	 o u r 	 d e c i s i o n 	 t a k e n 	 t w o 	 y e a r s 	 a go 	 n o t	 
t o 	 p u r s u e 	 t h e 	 d e e p 	 d i s c o u n t i n g 	 s t r a t e g y 	 t ha t 	 m a n y 	 o t h e r	
operators in the sector have followed 
i n t e r e s t 	 c o s t s 	 o f 	 £ 2  7 m 	 f e l l 	 b y 	 2 0  	 c om p a r e d 	 t o 	 t h e 	 pr i or	
y e ar  	 pr incipally 	 as 	 a 	 r e sult 	 o f 	 lo w e r 	 de b t 	 le v e ls 	 dur ing 	 the	
y e a r  	 t hi s 	 r e s ult e d 	 i n 	 g r o u p 	 a d j u s t e d 	 pr o fi t 	 b e f or e 	 t a x	 
o f 	 £ 5 5  9 m  	 a n 	 i n c r e a s e 	 o f 	 1 2  	 o n 	 t h e 	 pr i or 	 y e a r  	 a f t e r	 
t a k i n g 	 i n t o 	 a c c o u n t 	 a 	 l o w e r 	 a v e r a g e 	 t a x 	 r a t e 	 i n 	 t h e 	 y e a r	 
 a s 	 d i s c u s s e d 	 la t e r 	 i n 	 t h e 	 r e por t   	 a d j u s t e d 	 po s t  t a x 	 pr o fi t s	 
o f 	 £ 3 9  7 m 	 i n c r e a s e d 	 b y 	 1 5  	 c om p a r e d 	 t o 	 t h e 	 pr i or 	 y e a r 	
r e s ult i n g 	 i n 	 a d j u s t e d 	 e p s 	 o f 	 1 9  95 p  	 a n 	 i n c r e a s e 	 o f 	 1 4 	
c om p a r e d 	 t o 	 pr i or 	 y e a r 	
o n 	 a 	 pr o 	 f or m a 	 5 2 	 w e e k 	 b a s i s 	 t h e 	 k e y 	 fi na n c ia l 	 fi gu r e s 	 w e r e	
a s 	 f o l l o w s  	 r e v e n u e s 	 w e r e 	 £ 4 5 3  7 m 	  u p 	 4    	 e bi t d a 	 w a s	
£ 8 2  6 m 	  u p 	 4    	 a d j u s t e d 	 op e r a t i n g 	 pr o fi t 	 w a s 	 £ 5 5  9 m	 
 u p 	 5    	 a d j u s t e d 	 pr o fi t 	 b e f or e 	 t a x 	 w a s 	 £ 5 3  2 m 	  u p 	 6   	 
and 	 adjust ed 	 e ar nings 	 pe r 	 shar e 	 w as 	 1 9 p 	  up 	 9  
cost inflation 
d u r i n g 	 2 0 1 0 	 c o s t 	 pr e s s u r e s 	 w e r e 	 r e la t i v e l y 	 b e ni g n 	 w it h	
a v e r a g e 	 f o od 	 a n d 	 b e v e r a g e 	 c o s t 	 i n fla t i o n 	 a t 	 a bo u t 	 1  5  	
w age 	 cost 	 in fla t ion 	 w as 	 dr iv e n 	 b y 	 the 	 na tional 	 minimum 	
w a g e 	 i n c r e a s e s 	 o f 	 1  2  	 i n 	 o ct ob e r 	 2 0 0 9 	 a n d 	 2  2 	 
in 	 oct obe r 	 2 0 1 0 
“ 	 w e	co n t i n ue	t o	b e	a b s o l ut e ly	 
f o c u s e d 	 o n 	 e n s u r i n g 	 t h a t 	 a l l 	 o f 	 o u r	
n e w	o p e n i n g s	a c h i e v e	t h e	h i g h	 
levels of return on investment which 
w e 	 t a r g e t  ”	 introduction business review governance financial statements
the restaurant group plc annual report 2010 13 
look ing 	 f or w ard 	 t o 	 2 0 1 1  	 ther e 	 is 	 cle arly 	 some 	 up w ard	
pr e s s u r e 	 o n 	 f o od 	 a n d 	 b e v e r a g e 	 c o s t s  	 a lt h o u g h 	 t h e 	 g r o u p	
ha s 	 a 	 s t r a t e g y 	 o f 	 fi x i n g 	 c o s t s 	 w h e r e v e r 	 po s s i bl e  	 w e 	 do	
e x pe ct 	 t o 	 se e 	 a 	 some wha t 	 higher 	 le v el 	 o f 	 a v erage 	 in fla tion 	
c om p a r e d 	 t o 	 2 0 1 0  	 a t 	 t hi s 	 s t a g e 	 i n 	 t h e 	 y e a r  	 t a k i n g 	 i n t o	
a c c o u n t 	 t h e 	 b e n e fi t 	 o f 	 t h e 	 fi x e d 	 a n d 	 c a pp e d 	 pr i c e 	 c o n t r a ct s	
a l r e a d y 	 s e c u r e d  	 w e 	 e x p e ct 	 a v e r a g e 	 i n fla t i o n 	 a c r o s s 	 a l l 	 o u r	
f o od 	 a n d 	 b e v e r a g e 	 i np u t s 	 t o 	 b e 	 b e t w e e n 	 2  	 a n d 	 3  	
o n 	 la bo u r 	 c o s t s  	 t h e 	 k e y 	 dr i v e r 	 c o n t i n u e s 	 t o 	 b e 	 t h e 	 n a t i o na l	
m i ni m u m 	 w a g e 	 i n c r e a s e 	 r e f e r r e d 	 t o 	 a bo v e  	 r e n t a l 	 c o s t	
i n fla t i o n 	 i s 	 a t 	 v e r y 	 l o w 	 l e v e l s 	 c om p a r e d 	 t o 	 pr e v i o u s 	 y e a r s 	 
f or 	 2 0 1 1  	 b a s e d 	 o n 	 t h e 	 e v i d e n c e 	 o f 	 r e v i e w s 	 i n 	 2 0 1 0 	 a n d 	 t h o s e	
w e 	 ha v e 	 c om pl e t e d 	 s i n c e 	 t h e 	 y e a r 	 e n d  	 w e 	 do 	 n o t 	 e x p e ct	
r e n tal 	 in fla t ion 	 on 	 the 	 e xisting 	 base 	 t o 	 be 	 much 	 mor e 	 than 	
1   	 f or 	 u t i l it y 	 c o s t s  	 mo s t 	 o f 	 o u r 	 m a j or 	 c o n t r a ct s 	 a r e 	 fi x e d	
f or w a r d 	 u n t i l 	 la t e 	 2 0 1 2 	 a n d 	 i n 	 t h e 	 c u r r e n t 	 y e a r 	 w e 	 w i l l 	 ha v e	 
t h e 	 b e n e fi t 	 o f 	 a 	 r e du ct io n 	 c om p a r e d 	 t o 	 2 0 1 0 	
t a k i n g 	 a l l 	 t h e s e 	 f a ct or s 	 i n t o 	 a c c o u n t  	 w e 	 e s t i m a t e 	 t ha t	 
the 	 busine ss 	 ne eds 	 t o 	 ha v e 	 t o tal 	 sale s 	 gr o w th 	 o f 	 2 3 	 
t o 	 co v e r 	 o f f 	 the 	 c ash 	 costs 	 o f 	 the se 	 in fla tionar y 	cost	
increases after nine weeks the group’s total sales are  
u p 	 8   	 mor e 	 t ha n 	 do u bl e 	 w ha t 	 i s 	 n e c e s s a r y 	 t o 	 c o v e r 	 t h e	
e x pe ct ed 	 cost 	 incr e ase s 	
nontrading and noncore items 
in 	 the 	 cur r e n t 	 y e ar 	 the 	 only 	 non tra ding 	 it em 	 is 	 a 	 cr edit	 
o f 	 £ 0  6 m  	 a n 	 a c c o u n t i n g 	 a d j u s t m e n t 	 a r i s i n g 	 o n 	 t h e 	 i f r s	
r e v a l u a t i o n 	 o f 	 t h e 	 g r o u p ’ s 	 i n t e r e s t 	 r a t e 	 s w a p 	 a r r a n g e m e n t s 	
d u r i n g 	 t h e 	 y e a r 	 n o n  c or e 	 l o s s e s 	  f r om 	 o u r 	 s m a l l 	 s u b  l e t	
e s t a t e  	 r e du c e d 	 f r om 	 £ 1  3 m 	 t o 	 £ 0  7 m  	 w e 	 c o n t i n u e 	 t o 	 t a k e	
steps to minimise these losses
capital expenditure 
d u r i n g	th e	y e a r	th e	g r o u p	i n v e s t e d	a	t o t a l	o f	£ 3 2  0 m	i n	
c a pit a l 	 a dd it i o n s 	  2 0 0 9  	 £ 3 1  5 m   	 t hi s 	 i n c l ud e d 	 d e v e l opm e n t	
e x p e n d i tu r e	o f	£ 2 0  7 m	 2 0 0 9 	£ 2 0  1 m 	a n d	£ 1 1  3 m	o f	
r e fur bishme n t 	 and 	 main t e nance 	 e xpe nditur e 	  2 0 0 9  	 £ 1 1  4 m  	
t h e 	 g r o u p 	 i s 	 c om mit t e d 	 t o 	 i n v e s t i n g 	 i n 	 t h e 	 e x i s t i n g 	 e s t a t e	 
a n d 	 o u r 	 v e r y 	 s t r o n g 	 b a la n c e 	 s h e e t 	 po s it i o n 	 m e a n s 	 t ha t 	 w e	
a r e 	 n o t 	 c o n s t r a i n e d 	 f r om 	 m a i n t a i n i n g 	 t hi s 	 i n v e s t m e n t  	 w hi c h	 
i s 	 e s s e n t ia l 	 t o 	 s e c u r i n g 	 t h e 	 l o n g  t e r m 	 h e a lt h 	 a n d 	 pr o fi t a bi l it y	 
o f 	 t h e 	 b u s i n e s s 	
d u r i n g 	 t h e 	 y e a r 	 t h e 	 g r o u p 	 op e n e d 	 a 	 t o t a l 	 o f 	 2 4 	 n e w 	 o u t l e t s 	 
a 	 s i g nifi c a n t 	 i m pr o v e m e n t 	 o n 	 e x p e ct a t i o n s 	 a t 	 t h e 	 b e g i nni n g 	 o f	
t h e 	 y e a r  	 o u r 	 2 0 1 0 	 n e w 	 s it e s 	  a n d 	 a l s o 	 t h o s e 	 op e n e d 	 i n 	 2 0 0 9 	
a r e 	 g e n e r a t i n g 	 l e v e l s 	 o f 	 s a l e s 	 a n d 	 pr o fi t a bi l it y 	 a t 	 l e a s t 	 i n 	 l i n e	
w it h  	 a n d 	 i n 	 mo s t 	 c a s e s 	 s u b s t a n t ia l l y 	 a h e a d 	 o f  	 f e a s i bi l i t y 	
a f t e r 	 tak ing 	 in t o 	 accoun t 	 t w o 	 closur e s 	 in 	 the 	 y e ar  	 the 	 g r oup	
e nded 	 the 	 y e ar 	 with 	 389 	 trading 	 units 
t he 	 table 	 be lo w 	 summar ise s 	 ope nings 	 and 	 closur e s	 
du r i n g 	 t h e 	 y e a r 	
year end
2009 opened closed
year end
2010
frankie  
benny’s 188 9 – 1 9 7
c hi quit o 63 5 – 68
garfunkel’s 22 2 1  23
p ub 	 r e staura n t s 42 1 – 43
c on c e s si on s 52 7 1  58
total 367 24  2  38 9
w e 	 con t inue 	 t o 	 be 	 absolut e ly 	 f ocused 	 on 	 e nsur ing 	 tha t 	 all	 
o f 	 o u r 	 n e w 	 op e ni n gs 	 a c hi e v e 	 t h e 	 hi g h 	 l e v e l s 	 o f 	 r e t u r n 	 o n	
i n v e s t m e n t 	 w hi c h 	 w e 	 t a r g e t  	 w h e n 	 a s s e s s i n g 	 t h e 	 v ia bi l it y 	 a n d	
pr o fi t a bi l it y 	 o f 	 po t e n t ia l 	 n e w 	 s it e s  	 w e 	 a dop t 	 a 	 hi g hl y 	 r i gor o u s	
a n d 	 a na l y t i c a l 	 a ppr o a c h  	 t hi s 	 i n c l ud e s 	 a 	 d e t a i l e d 	 fi na n c ia l	
e v a l u a t i o n  	 a s 	 w e l l 	 a s 	 d e mo gr a ph i c 	 a na l y s i s  	 c om p e t it or 	 a n d	
mar k e t 	 analysis  	 and 	 compar ison 	 t o 	 o the r 	 sit e s 	 in 	 the 	 g r oup ’ s	
e x i s t i n g 	 por t f o l i o  	 w e 	 a l s o 	 c o n du ct 	 r e gula r 	 po s t  i n v e s t m e n t	
a ppr a i s a l s 	 a n d 	 t h e s e 	 c o n fi r m 	 t ha t 	 w e 	 c o n t i n u e 	 t o 	 a c hi e v e	
tar ge t 	 le v e ls 	 o f 	 r e tur ns 
we are well 
positioned to 
continue our 
expansion 14 the restaurant group plc annual report 2010
cash flow 
se t 	 o u t 	 b e l o w 	 i s 	 a 	 s u m m a r y 	 c a s h 	 fl o w 	 s t a t e m e n t 	 f or 	 t h e 	 y e a r 	
n e t 	 c a s h 	 f r om 	 op e r a t i o n s 	 i s 	 £ 8 7  8 m 	  2 0 0 9  	 £ 7 7  1 m   	 a f t e r	
i n t e r e s t 	 p a y m e n t s  	 t a x 	 a n d 	 m a i n t e na n c e 	 c a pit a l 	 e x p e n d i t u r e	
t h e 	 g r o u p 	 g e n e r a t e d 	 f r e e 	 c a s h 	 fl o w 	 o f 	 £ 5 6  8 m  	 o n c e 	 a g a i n	
t hi s 	 d e mo n s t r a t e s 	 t h e 	 v e r y 	 s t r o n g 	 a n d 	 t r a n s p a r e n t 	 c a s h 	 fl o w	
g e n e r a t i o n 	 c ha r a ct e r i s t i c s 	 o f 	 t h e 	 g r o u p ’ s 	 b u s i n e s s  	 t h e 	 f r e e	
c a s h 	 fl o w 	 fi na n c e d 	 a l l 	 o f 	 t h e 	 n e w 	 s it e s 	 a n d 	 d i v i d e n ds  	 n e t	
c a s h 	 fl o w 	 w a s 	 £ 1 9  8 m 	  2 0 0 9  	 £ 1 2  2 m  	 w hi c h 	 r e s ult e d 	 i n 	 n e t	
deb t 	 r educing 	 fr om 	 £ 66  7 m 	 t o 	 £ 4 6  9 m 
2010
£m
2009
£m
o p e r a t i n g 	 pr o fi t	 586 53 4
w or k i n g 	 c a pit a l 	 a n d 	 n o n  c a s h	
a dj us t me n t s 20  2 6 
d e pr e c ia t i o n 272 26  3
ne t 	 c ash 	 flo w 	 f r om 	 ope ra tions 878 77 1
ne t 	 in t e r e st 	 paid 21  22
t a x 	 paid 176 13 7
main t e nance 	 c apital 	 e x pe nditur e 113 11 4
f r e e 	 c ash 	 flo w 568 498
ne w 	 build 	 c apital 	 e x pe nditur e 207 201
d i v id e nds 157 149
nor malised 	 ne t 	 c ash 	 flo w 204 148
d is pos a ls – 0 5
ne t 	 c ash 	 flo w 	 f r om 	 shar e 	 is sue s 19 10
s w ap 	 t e r mina t ion 	 pa y me n t 10 –
p ur chase 	 o f 	 shar e s 	 f or 	 e mplo y e e	
be nefit 	 tr ust 14  3 9 
f i na n c e 	 c o s t s 	 o f f s e t 	 a g a i n s t	 
bank 	 de b t 01  02
change 	 in 	 ne t 	 de b t 198 122
ne t 	 bank 	 de b t 	 a t 	 star t 	 o f 	 y e ar 667 78 9 
ne t 	 bank 	 de b t 	 a t 	 e nd 	 o f 	 y e ar 469  667
group finance  
director’s report 
continued introduction business review governance financial statements
the restaurant group plc annual report 2010 15 
financing and key financial ratios 
t h e 	 g r o u p 	 ha s 	 c om mit t e d 	 b a nk i n g 	 f a c i l it i e s 	 o f 	 £ 1 2 0 m 	 a n d	 
a 	 £ 1 0 m 	 o v e r dr a f t 	 f a c i l it y  	 t h e 	 c om mit t e d 	 b a nk 	 f a c i l it y 	 w a s	 
p u t 	 i n 	 pla c e 	 i n 	 d e c e m b e r 	 2 0 0 7 	 a n d 	 r u n s 	 f or 	 fi v e 	 y e a r s 	 u n t i l	
d ece mbe r 	 2 0 1 2 	
t he 	 g r oup ’ s 	 bank ing 	 arrangeme n t 	 con tains 	 t w o 	 financial 	
c o v e na n t s  	 bo t h 	 o f 	 w hi c h 	 a r e 	 t e s t e d 	 o n 	 a 	 s i x 	 mo n t hl y 	 b a s i s	 
b y 	 r e f e r e n c e 	 t o 	 t h e 	 g r o u p ’ s 	 p u bl i s h e d 	 r e s ult s  	 t h e s e 	 a n d	
o the r 	 k e y 	 financial 	 ra tios 	 ar e 	 summarised 	 as 	 f ollo w s 
banking
covenant 2010 2009
e bi t d a  i n t e r e s t 	 c o v e r 4x 32x 24 x
n e t 	 d e b t  e bi t d a  3x 055x 0 84x
fix e d 	 char ge 	 co v e r n a 26x 25 x
balance 	 she e t 	 ge aring n a 32 58 
a s 	 c a n 	 b e 	 s e e n 	 a l l 	 o f 	 t h e s e 	 fi n a n c i a l 	 r a t i o s 	 i m p r o v e d	 
d u r i n g 	 th e 	 y e a r  	 i n 	 th e 	 c u r r e n t 	 c l i m a te 	 i n 	 w h i c h 	 th e	
e c o n o m i c 	 o u t l o o k 	 c o n t i n u e s 	 t o 	 b e 	 s o m e w h a t 	 u n c e r t a i n 	
w e 	 a r e 	 h a p p y 	 t o 	 s e e 	 a 	 r e d u c t i o n 	 i n 	 t h e 	 o v e r a l l 	 l e v e l 	 o f 	 n e t	
d e b t  	 t h i s 	 p u t s 	 u s 	 i n 	 a 	 v e r y 	 s t r o n g 	 p o s i t i o n 	 t o 	 a c c e l e r a t e	
t h e 	 n e w 	 s i t e 	 o p e n i n g 	 p r o g r a m m e 	 o v e r 	 t h e 	 n e x t 	 s e v e r a l	
y e a r s 	 a s 	 c i r c u m s t a n c e s 	 a l l o w  	 t h i s 	 s t r o n g 	 fi n a n c i a l	 
p o s i t i o n 	 a l s o 	 a l l o w s 	 u s 	 t o 	 m a i n t a i n 	 a 	 h i g h 	 l e v e l 	 o f	
m a i n t e n a n c e 	 e x p e n d i t u r e 	 o n 	 t h e 	 e x i s t i n g 	 e s t a t e 	 a s	 
w e l l 	 a s 	 a 	 g e n e r o u s 	 a n d 	 i n c r e a s i n g 	 l e v e l 	 o f 	 d i v i d e n d	 
to shareholders 
tax 
t he 	 t o tal 	 ta x 	 char ge 	 in 	 the 	 y e ar 	 w as 	 £ 1 6  4 m  	 analysed 	 
as follows
trading
£m
2010
non
trading
£m
total
£m
trading
£m
2009
non
trading
£m
total
£m
c or por a t i o n 	 t a x 176 03 173 160  07 153
de fe r r ed 	 ta x 14 05 09  0 4  3 8  4 2 
total 162 02 164 156 45  111
a v e rage 	 ta x 	 ra t e 29 3 1
o n 	 t r a d i n g 	 a ct i v it i e s 	 t h e 	 u n d e r l y i n g 	 t a x 	 c ha r g e 	 i n 	 t h e 	 y e a r	 
o f 	 £ 1 6  2 m 	 r e pr e s e n t s 	 a 	 t a x 	 r a t e 	 o f 	 2 9  	 c om p a r e d 	 t o 	 3 1 	 
i n 	 2 0 0 9  	 t hi s 	 r e du ct i o n 	 i s 	 pr i m a r i l y 	 du e 	 t o 	 t h e 	 r e v a l u a t i o n 	 o f	
d e f e r r e d 	 t a x 	 l ia bi l it i e s 	 t o 	 r e fle ct 	 t h e 	 l o w e r 	 r a t e 	 o f 	 c or por a t i o n	
t a x 	 w hi c h 	 a ppl i e s 	 f r om 	 a pr i l 	 2 0 1 1  	 w e 	 e x p e ct 	 t o 	 s e e 	 a	
c o n t i n ui n g 	 r e du ct io n 	 i n 	 t h e 	 a v e r a g e 	 t a x 	 r a t e 	 o v e r 	 t h e 	 n e x t	 
f e w 	 y e a r s 	 a s 	 t h e 	 go v e r nm e n t 	 i m pl e m e n t s 	 t h e 	 pha s e d	
r e du ct io n 	 i n 	 c or por a t i o n 	 t a x 	 r a t e 	 a nn o u n c e d 	 i n 	 2 0 1 0 	
t h e 	 g r o u p ’ s 	 a v e r a g e 	 t a x 	 r a t e 	 w i l l 	 c o n t i n u e 	 t o 	 b e 	 hi g h e r 	 t ha n	
t h e 	 h e a d l i n e 	 m a i n s t r e a m 	 c or por a t i o n 	 t a x 	 r a t e 	 pr i m a r i l y 	 du e	 
t o 	 s i g nifi c a n t 	 l e v e l s 	 o f 	 d i s a l l o w a bl e 	 e x p e n d i t u r e 	 w it hi n 	 t h e	
c a pit a l 	 e x p e n d it u r e 	 pr o gr a m m e 
stephen critoph 
g r oup 	 finance 	 d ir e ct or	
9 march 2011
maintaining 
high standards 
of operational 
efficiency and 
execution 16 the restaurant group plc annual report 2010
1 2 3
1 alan jackson
nonexecutive chairman
a g e d 	 6 7  	 h e 	 j o i n e d 	 t h e 	 r e s t a u r a n t 	 g r o u p 	 pl c 	 a s 	 e x e c u t i v e	
c ha i r m a n 	 i n 	 m a r c h 	 2 0 0 1 	 a n d 	 b e c a m e 	 n o n  e x e c u t i v e	
chair man 	 fr om 	 januar y 	 2 0 0 6  	 he 	 has 	 a 	 w e alth 	 o f 	 e x pe r ie nce	
i n 	 t h e 	 l e i s u r e 	 s e ct or  	 f or 	 1 8 	 y e a r s  	 f r om 	 1 9 7 3 	 t o 	 1 9 9 1  	 h e	
o c c u pi e d 	 v a r i o u s 	 po s it i o n s 	 w it hi n 	 w hit br e a d  	 pr i n c i p a l l y	
m a na g i n g 	 d i r e ct or 	 o f 	 b e e f e a t e r 	 s t e a k h o u s e s 	 a n d 	 a l s o 	 t h e	
w hit br e a d 	 r e s t a u r a n t 	 d i v i s i o n 	 w h e r e 	 h e 	 w a s 	 r e s po n s i bl e 	 f or	
the creation and development of beefeater travel inns and 
t gi 	 f r i d a y 	 br a n ds  	 a f t e r 	 t h e 	 b e e r 	 o r d e r s 	 i n 	 1 9 9 1 	 h e 	 f o u n d e d	
hi s 	 o w n 	 b u s i n e s s 	 w hi c h 	 b e c a m e 	 i nn 	 b u s i n e s s 	 g r o u p 	 pl c 	 i n	
1 9 95 	 a n d 	 w a s 	 s u b s e qu e n t l y 	 a c qui r e d 	 b y 	 p u n c h 	 i n 	 1 9 9 9  	 h e	
chair ed 	 o r ie n tal 	 re stauran t 	 g r oup 	 plc 	 un til 	 its 	 sale 	 t o 	 noble	
ho u s e 	 i n 	 2 0 0 0  	 c u r r e n t l y 	 a la n 	 i s 	 n o n  e x e c u t i v e 	 c ha i r m a n 	 o f	
c ha r l e s 	 w e l l s 	 l i mit e d  	 n o n  e x e c u t i v e 	 d e p u t y 	 c ha i r m a n 	 o f	
redr o w 	 plc 	 and 	 a 	 non e x e cutiv e 	 dir e ct or 	 o f 	 p la y t e ch 	 plc 
2 andrew page
chief executive officer
a g e d 	 5 2  	 h e 	 j o i n e d 	 t h e 	 r e s t a u r a n t 	 g r o u p 	 pl c 	 a s 	 f i na n c e	
d i r e ct or 	 i n 	 j u n e 	 2 0 0 1  	 i n 	 d e c e m b e r 	 2 0 0 3 	 h e 	 w a s 	 a ppo i n t e d	
g r o u p 	 m a na g i n g 	 d i r e ct or 	 a n d 	 i n 	 j a n u a r y 	 2 0 0 6 	 b e c a m e 	 c hi e f	
e x e c u t i v e 	 o f fi c e r  	 h i s 	 c a r e e r 	 ha s 	 s p a nn e d 	 bo t h 	 i n t e r na t i o na l	
a n d 	 dom e s t i c 	 b u s i n e s s e s  	 p r i or 	 t o 	 j o i ni n g 	 t h e 	 r e s t a u r a n t	
g r o u p 	 pl c  	 h e 	 h e l d 	 a 	 n u m b e r 	 o f 	 s e ni or 	 po s it i o n s 	 i n 	 t h e 	 l e i s u r e	
a n d 	 h o s pit a l i t y 	 i n du s t r y 	 i n c l ud i n g 	 se ni or 	 v i c e 	 p r e s i d e n t	 
w it h 	 i n t e r c o n t i n e n t a l 	 ho t e l s 	 a n d 	 f i na n c e 	 d i r e ct or 	 o f 	 h a n o v e r	
i n t e r na t i o na l 	 pl c  	 p r i or 	 t o 	 t ha t  	 a n dr e w 	 s p e n t 	 s i x 	 y e a r s 	 a s	 
a 	 c or por a t e 	 f i na n c i e r 	 w it h 	 k l e i n w or t 	 b e n s o n 	 ha v i n g 	 t r a i n e d	
a n d 	 qu a l ifie d 	 a s 	 a 	 c ha r t e r e d 	 a c c o u n t a n t 	 w it h 	 k p mg 	 
a ndr e w 	 is 	 a 	 none x e cutiv e 	 dir e ct or 	 o f 	 a r e na 	 l e isur e 	 plc 
3 stephen critoph
group finance director
a g e d 	 5 0  	 h e 	 w a s 	 a ppo i n t e d 	 a s 	 f i na n c e 	 d i r e ct or 	 o f 	 t h e	
r e s t a u r a n t 	 g r o u p 	 pl c 	 i n 	 se p t e m b e r 	 2 0 04  	 p r e v i o u s l y 	 h e 	 ha s	
he ld 	 se v e ral 	 se nior 	 finance 	 positions 	 in 	 compas s 	 g r oup 	 plc 	
a n d 	 g r a na d a 	 g r o u p 	 pl c  	 i n c l ud i n g 	 c or por a t e 	 d e v e l opm e n t	
d i r e ct or 	 o f 	 c om p a s s 	 r o a ds i d e 	 a n d 	 f i na n c e 	 d i r e ct or 	 o f	
t r a v e l odg e 	 a n d 	 l it t l e 	 c h e f  	 h e 	 t r a i n e d 	 a n d 	 qu a l ifie d 	 a s	 
a 	 char t e r ed 	 a ccoun tan t 	 with 	 deloit t e 	  	 t ouche 
board of directors introduction business review governance financial statements
the restaurant group plc annual report 2010 17 
4 5 6 7
4 trish corzine
executive director trg concessions
a g e d 	 5 3  	 s h e 	 j o i n e d 	 t h e 	 r e s t a u r a n t 	 g r o u p 	 pl c 	 i n 	 1 9 9 3 	 a s	
a r e a 	 m a na g e r 	 f or 	 g a r f u nk e l ’ s 	 w hi c h 	 i n c l ud e d 	 t h e 	 g r o u p ’ s	
a i r por t 	 op e r a t i o n s  	 i n 	 1 9 9 7 	 s h e 	 w a s 	 a ppo i n t e d 	 b r a n d 	 d i r e ct or	
of garfunkel’s and airports and in 1999 was promoted  
t o 	 o p e r a t i o n s 	 d i r e ct or 	 – 	 c o n c e s s i o n s  	 i n 	 m a r c h 	 2 0 0 3 	 s h e	
w a s 	 a ppo i n t e d 	 m a na g i n g 	 d i r e ct or 	 – 	 c o n c e s s i o n s 	 a n d 	 i n	
o ct ob e r 	 2 0 0 3 	 w a s 	 a ppo i n t e d 	 t o 	 t h e 	 b o a r d  	 p r i or 	 t o 	 j o i ni n g	
t h e 	 r e s t a u r a n t 	 g r o u p 	 pl c  	 t r i s h 	 w or k e d 	 f or 	 h ä a g e n  da z s	 
the n 	 managed 	 the 	 a tacama 	 re stauran t 	 g r oup 
5 simon cloke
nonexecutive
a ged 	 43  	 he 	 w as 	 appoin t ed 	 as 	 a 	 non e x e cutiv e 	 d ir e ct or	 
o f 	 t h e 	 c om p a n y 	 i n 	 m a r c h 	 2 0 1 0  	 f or m e r l y 	 g l ob a l 	 h e a d	 
o f 	 i n du s t r ia l s 	 a t 	 d r e s d n e r 	 k l e i n w or t 	 w a s s e r s t e i n  	 h e 	 w a s	
a ppo i n t e d 	 m a na g i n g 	 d i r e ct or 	 o f 	 h s b c ’ s 	 d i v e r s ifie d 	 i n du s t r i e s	
g r o u p 	 i n 	 2 0 0 5 	 a n d 	 i s 	 c u r r e n t l y 	 r e s po n s i bl e 	 f or 	 m a na g i n g	
h s b c ’ s 	 b u s i n e s s 	 w it h 	 s om e 	 o f 	 it s 	 la r g e s t 	 h o u s e 	 b ui l d i n g	 
and 	 building 	 ma t e rials 	 clie n ts 	
6 tony hughes
nonexecutive
a g e d 	 6 2  	 h e 	 w a s 	 a ppo i n t e d 	 a s 	 a 	 n o n  e x e c u t i v e 	 d i r e ct or 	 o f	 
t h e 	 c om p a n y 	 i n 	 j a n u a r y 	 2 0 0 8  	 h e 	 w a s 	 m a na g i n g 	 d i r e ct or 	 o f	
t h e 	 r e s t a u r a n t s 	 d i v i s i o n 	 o f 	 m it c h e l l s 	  	 b u t l e r s 	 pl c 	  pr e v i o u s l y	
ba s s 	 pl c 	 a n d 	 s i x 	 c o n t i n e n t s 	 pl c  	 f r om 	 1 9 95 	 t o 	 2 0 0 7 	 a n d	
s e r v e d 	 o n 	 t h e 	 b o a r d 	 o f 	 m it c h e l l s 	  	 b u t l e r s 	 pl c 	 f r om 	 2 0 0 3 	 t o	
2 0 0 7  	 p r i or 	 t o 	 j o i ni n g 	 ba s s  	 h e 	 h e l d 	 s e ni or 	 m a na g e m e n t 	 r o l e s	
a t 	 b  q  	 j  a  	 de v e nish 	 and 	 w hitbr e ad 	
7 robert morgan
company secretary
a g e d 	 3 9  	 h e 	 j o i n e d 	 t h e 	 r e s t a u r a n t 	 g r o u p 	 i n 	 2 0 0 2 	 i n 	 t h e	
fi na n c e 	 d e p a r t m e n t 	 a n d 	 w a s 	 a ppo i n t e d 	 a s 	 c om p a n y	
se c r e t a r y 	 i n 	 se p t e m b e r 	 2 0 04  	 p r e v i o u s l y 	 h e 	 w or k e d 	 i n 	 t h e	
finance 	 f unct ion 	 o f 	 coc a  cola 	 hbc 	 s  a  	 ha ving 	 qualified 	 
as 	 a 	 char t e r ed 	 a ccoun tan t 	 with 	 k p mg  18 the restaurant group plc annual report 2010
report of the directors
the directors present their annual report and the group 
accounts for the year ended 2 january 2011
results and dividends
the results for the year ended 2 january 2011 are presented 
under international financial reporting standards “ifrss” 
the report and accounts are drawn up on a 53 week 
reporting basis ending on 2 january 2011 2009 52 week 
reporting basis ending on 27 december 2009 the results 
for the year are set out in the group consolidated income 
statement on page 43 this shows a group profit after tax  
of £401m 2009 £373m an interim dividend of 154p per 
share was paid on 13 october 2010 the directors propose a 
final dividend of 746p per share which is subject to approval 
at the company’s annual general meeting to be held on  
11 may 2011 should this be approved this final dividend  
will be paid on 17 june 2011 bringing the ordinary dividend 
per share payable in respect of 2010 to 90p 2009 80p 
principal activity
the principal activity of the group is the operation of 
restaurants and pub restaurants further information relating 
to the business including a review of the year’s performance 
and planned developments is given in the chief executive 
officer’s review of operations on pages 6 to 11
business review 
the company is required by the companies act to include  
a business review in this report the information that fulfils  
the requirements of the business review can be found  
in the chairman’s statement chief executive officer’s  
review of operations and group finance director’s report  
on pages 4 to 15 which are incorporated in this report  
by reference
directors
full details of the directors of the company are given on 
pages 16 and 17 the directors who held office during 2010 
were as follows 
executive directors
andrew page •	
stephen critoph •	
trish corzine •	
nonexecutive directors
alan jackson •	
tony hughes •	
simon cloke appointed on 26 march 2010 •	
john jackson resigned on 6 may 2010 •	
in respect of 2010 each of the nonexecutive directors 
excluding the chairman is considered by the board to  
be independent since 6 may 2010 tony hughes has held 
the role of senior nonexecutive director alan jackson 
transitioned from executive chairman to nonexecutive 
chairman on 1 january 2006 and following his tenure as an 
executive director is not considered to be an independent 
nonexecutive director
no director has a service contract with the company 
requiring more than twelve months notice in accordance  
with the uk corporate governance code best practice  
all the directors will be subject to reelection at the annual 
general meeting to be held on 11 may 2011
during the year the audit committee comprised the following 
nonexecutive directors
simon cloke appointed on 26 march 2010 •	
tony hughes •	
john jackson resigned on 6 may 2010 •	
simon cloke is currently chairman of the audit committee
during the year the remuneration committee comprised  
the following nonexecutive directors
tony hughes •	
simon cloke appointed on 26 march 2010 •	
john jackson resigned on 6 may 2010 •	
tony hughes is currently chairman of the  
remuneration committee
during the year the nominations committee comprised  
the following directors
tony hughes chairman •	
simon cloke appointed on 26 march 2010 •	
alan jackson •	
andrew page •	
john jackson resigned on 6 may 2010 •	
the directors’ remuneration report which includes details  
of directors’ remuneration and interests in the company’s 
shares and options together with information on service 
contracts is set out on pages 29 to 35
directors’ shareholdings
the interests of the directors in the shares of the company 
all being beneficially owned were as follows
at 
8 march 
201 1
at 
2 january 
201 1
at 
27 december
2009
executive directors
andrew page 576806 576806 506806
stephen critoph 258647 258647 202491
trish corzine 255497 255497 213757
nonexecutive directors
alan jackson 400191 400191 400191
tony hughes 91476 91476 10000
simon cloke – – na
details of the directors’ share options are disclosed in  
the directors’ remuneration report on pages 33 and 34  
the closing midmarket price of the ordinary shares on  
2 january 2011 was 2750p and the range during the  
financial year was 1863p to 2978p introduction business review governance financial statements
the restaurant group plc annual report 2010 19 
share capital structure
the company has one class of shares ordinary shares of 
28
1
⁄8p the authorised share capital is 284444444 ordinary 
shares of 28
1
⁄8p as at 2 january 2011 the issued called  
up and fully paid number of shares in issue was 199470892 
shares there are no preference shares or special rights 
pertaining to any of the shares in issue 
following the 2010 annual general meeting the directors 
have had the authority to allot shares up to an aggregate 
nominal amount of £18690289 which represented 
approximately one third of the ordinary share capital of the 
company at the time the authority was given by shareholders 
this authority expires at the annual general meeting to be 
held on 11 may 2011 and it will be proposed to extend this 
authority updated for the current number of shares in issue 
at the forthcoming meeting the directors have no present 
intention of exercising this authority in addition following  
the 2010 annual general meeting the directors have the 
authority to make market purchases of shares in the 
restaurant group plc on behalf of the company up to 
19936308 ordinary shares which represented 10 of the 
company’s issued ordinary share capital at the time of the 
notice of the 2010 annual general meeting the minimum 
price that may be paid for such shares is 28
1
⁄8p per share 
the maximum price is the higher of 5 above the average 
middle market quotation for the ordinary shares for the five 
business days preceding the date of purchase and the higher 
of the price of the last independent trade and the highest 
current independent bid on the london stock exchange 
daily official list at the time the purchase is carried out  
this authority expires at the forthcoming annual general 
meeting and it will be proposed to extend this authority 
updated for the current number of shares in issue at  
the forthcoming meeting the directors have no present 
intention of exercising this authority
the group has entered into various contracts including 
leases during the course of ordinary business which may  
be terminated in the event of a change of control of  
the restaurant group plc
substantial shareholdings
at 16 february 2011 the company had been notified of the 
following interests of 3 or more in the issued ordinary share 
capital of the company
number of
shares
 of issued
 share capital
standard life 11220208 562
old mutual asset managers 11084906 556
scottish widows investment 
partnership 9054580 454
blackrock inc 8360566 419
fc asset management 8058428 404
new smith asset management 7 608373 381
legal  general asset 
management 7 282316 365
jp  morgan asset management 7099999 356
ameriprise financial inc 6890620 345
mg investment management 6700863 336
bae pension fund investment 
management 6600615 331
corporate governance
the company is committed to high standards of corporate 
governance and to observing the principles of corporate 
governance contained in the combined code on corporate 
governance that was issued in 2006 by the financial 
reporting council “the code” for which the board is 
accountable to shareholders
statement of compliance with the combined code
throughout the year ended 2 january 2011 the company 
has been in compliance with the provisions set out in  
the code except for provisions concerning the number  
of directors considered to be independent and the 
independence of the chairman who was previously  
executive chairman before assuming the role of non
executive chairman in january 2006 the company 
currently has two nonexecutive directors who are 
considered to be independent which is less than the 50  
of the board best practice guidance under the combined 
code during 2010 john jackson retired from the board  
and simon cloke was appointed as an independent non
executive director the composition of the board is regularly 
reviewed to ensure that the effectiveness of the board  
and performance of the group are at a high standard 
statement about applying the principles of the code 
the company has applied the principles set out in  
section 1 of the code including both the main principles  
and the supporting principles by complying with the code  
as reported above further explanation of how the main 
principles have been applied is set out below and in  
the directors’ remuneration report and the audit  
committee report 20 the restaurant group plc annual report 2010
report of the directors
 continued
the board
the board’s role is to provide entrepreneurial leadership  
of the company and group within a framework of prudent 
and effective controls which enable risk to be assessed and 
managed the board reviews the group’s strategic objectives 
and looks to ensure that the necessary financial and human 
resources are in place to achieve these objectives and to 
review management performance against these objectives 
the board also sets the company’s values and standards 
and manages the business in a manner to meet its 
obligations to shareholders and other stakeholders  
the board currently comprises the nonexecutive chairman 
the chief executive officer the group finance director  
the executive director of the concessions division and two 
nonexecutive directors their biographies appear on pages 
16 and 17 and these demonstrate a range of experience  
and sufficient calibre to bring independent judgement on 
issues of strategy performance resources and standards  
of conduct which is vital for the success of the group  
tony hughes acts as senior independent nonexecutive 
director and is available to shareholders if they have reasons 
for concern on which contact through the normal channels  
is inappropriate or has failed to resolve an issue 
the roles of chairman and chief executive officer are clearly 
defined the chairman is responsible for the leadership of the 
board and the chief executive officer is responsible for the 
strategic direction and operational management of the group
the board meets on a regular basis and there is a formal 
schedule of matters specifically reserved for its consideration 
this includes approval of the annual budget and the three 
year business plan approval of the interim and year end 
report and accounts review and approval of significant 
capital expenditure including development of new sites 
significant disposals of assets and acquisitions or disposals 
of businesses
operational management are responsible for the daytoday 
running of the group and report on a regular basis on that 
performance to the board the board is responsible for 
reviewing challenging and approving the strategic direction  
of the group and monitoring operational performance  
the board is responsible to shareholders for the proper 
management of the group and has access to the necessary 
information to enable it to discharge its duties all directors 
are subject to annual election by shareholders at the first 
opportunity after their appointment except where they  
are appointed by shareholders and to reelection thereafter 
at intervals of not more than three years following changes 
to the uk corporate governance code directors will be 
subject to reappointment on an annual basis
there is significant involvement from the nonexecutive 
directors this involves an ongoing dialogue with the 
executive directors including constructive challenge of 
performance and the group’s strategy the nonexecutive 
directors are provided with sufficient information to allow 
them to monitor assess and challenge the executive 
management of the group comprehensive board papers 
including financial information are circulated to all directors 
prior to board meetings and on a weekly basis they receive 
uptodate trading information the nonexecutive directors 
have the opportunity to meet without the executive directors 
present and this includes discussions of targets set and 
achieved by management
all directors have access to the advice and services of  
the company secretary and a procedure has been agreed 
for the directors in the furtherance of their duties to take 
independent professional advice if necessary at the expense 
of the company on joining the board there is a process  
for directors to receive training as to their role and its 
requirements and for nonexecutive directors to gain  
an understanding of the whole business nonexecutive 
directors are actively encouraged to meet with operational 
management and to visit the group’s operations in order  
to enhance their understanding of the group’s business  
its brands employees and processes 
during 2010 there were eight board meetings with full 
attendance by board members
executive directors are included in the annual performance 
evaluation of all senior employees within the group this 
involves a comprehensive review of performance against 
objectives and covers areas for future development through 
appraisal documentation and meetings the nonexecutive 
directors also meet in the absence of the chairman to 
appraise the chairman’s performance in the light of his  
fee review
the company acknowledges the importance of developing 
the skills of the directors to run an effective board to assist 
in this directors are given the opportunity to attend relevant 
courses and seminars and to acquire skills and experience 
which may enhance their contribution to the ongoing 
progress of the group the board and committees of the 
board have been subject to a formal performance appraisal 
through an internal questionnaire and the performance  
of all members of the board is considered as part of the 
annual remuneration review process introduction business review governance financial statements
the restaurant group plc annual report 2010 21 
communications with shareholders
communications with shareholders are given high  
priority the chairman’s statement chief executive officer’s 
review of operations and group finance director’s report  
on pages 4 to 15 include a detailed review of the business 
and the chief executive officer’s review of operations  
on pages 6 to 11 includes a review of planned  
future developments 
there is a regular dialogue with institutional investors 
including presentations after the company’s announcement 
of the yearend results and at the half year feedback from 
major institutional shareholders is provided to the board on  
a regular basis and where appropriate the board will take 
steps to address their concerns and recommendations 
the board uses the annual general meeting to communicate 
with private and institutional investors and welcomes their 
participation the chairman aims to ensure that the chairmen 
of the audit committee remuneration committee and 
nominations committee are available at the annual general 
meeting to answer questions and for all directors to attend
remuneration committee
the remuneration committee consists of two nonexecutive 
directors there was 100 attendance of the four 
remuneration committee meetings during 2010 the role  
of this committee and details of how the company complies 
with the principles of the code are set out in the directors’ 
remuneration report on pages 29 to 35
nominations committee
the nominations committee consists of the nonexecutive 
directors the nonexecutive chairman and the chief 
executive officer it met once during 2010 with full attendance 
at the meeting there are written terms of reference for the 
nominations committee it makes recommendations to  
the board for the appointment or replacement of additional 
directors it is also responsible for succession planning  
for the group 
audit committee
the audit committee consists of two nonexecutive 
directors during the year the committee was chaired by 
john jackson until 6 may 2010 and since that date by  
simon cloke the audit committee met twice during 2010 
with full attendance at each meeting a more detailed 
description of the work undertaken by the audit committee  
is included in the audit committee report on pages 36 and 
37 shareholders of the company have the opportunity to 
reappoint deloitte llp as external auditors of the company 
at the annual general meeting to be held on 11 may 2011
the restaurant group plc – strategy
the restaurant group’s key objective is to grow shareholder 
value and the strategy deployed to achieve this is to build a 
business capable of generating longterm sustainable and 
growing cash flows in pursuit of this we have built a business 
which is focused on the growing casual eating out market 
we have targeted segments of this market which offer distinct 
barriers to entry and where we can be confident of delivering 
good growth in profits and cash flows and where there is 
good potential for high returns on investment this has led  
the group to focus our activities in two areas – leisure and 
concessions the group operates in the expanding casual 
dining market and our offerings continue to provide good 
value for money in comfortable surroundings and excellent 
service from our dedicated teams
the group’s strategy is to deliver further organic growth 
through the rollout of our brands – frankie  benny’s 
chiquito garfunkel’s and our pub restaurant business  
we have a solid pipeline of sites for development coupled 
with a strong focus on continuing to deliver likeforlike sales 
growth from our existing restaurants our concessions 
business operates in a dynamic and complicated market 
where our management teams have marketleading  
expertise and a track record of innovation and improving 
sales performance and the group continues to look for 
opportunities to expand this division
the restaurant group plc – risk factors
the board of directors regularly identify monitor and manage 
potential risks and uncertainties to the group the list on the 
following page sets out what the directors consider to be the 
current principal risks and uncertainties with an overview of 
the mitigation process for these this list is not presumed to 
be exhaustive and is by its very nature subject to change
the restaurant group plc – key performance 
indicators
the board of directors and executive management receive  
a wide range of management information delivered in a timely 
manner listed below are the principal measures of progress 
that are reviewed on a regular basis to monitor the 
development of the group 
likeforlike sales
this measure provides an indicator of the underlying 
performance of our existing restaurants and highlights 
successful development of our offerings to best match 
changing consumer demands over time there is no 
accounting standard or consistent definition of “likeforlike 
sales” across the industry although the group has applied  
a consistent basis of calculation across years for reporting 
likeforlike performance during 2010 the group likeforlike 
sales declined by 1 which followed a 2 decline in 2009 
and a 15 increase in 2008 22 the restaurant group plc annual report 2010
report of the directors
 continued
nature of risk mitigation plans
strategicexternal risks
adverse economic conditions and a decline in consumer 
confidence and spend in the uk
regular monitoring of performance and appropriate  
action plans
increased supply of new restaurant concepts into the market concentration on segments offering higher barriers to entry  
and good growth prospects regular monitoring of performance 
and appropriate action plans
impact of terrorism in key locations including airports contingency planning and training liaison with authorities  
and landlords in key locations
possible health pandemic that may cause customers to stay 
away or prevent restaurants being adequately staffed
contingency planning and communication with employees
lack of new site opportunities and risks to existing  
concession agreements
dedicated property department focusing on new site 
development strong relationships with concessions partners
operational risks
failure to provide customers with brandstandard value for 
money offerings and service levels
training mystery diner visits monitoring of customer feedback 
internal quality control testing
major failure of key suppliers to deliver products into restaurants contingency planning for supply chain and suppliers
damage to our brands’ images due to failures in environmental 
health compliance in the restaurants or from contamination  
of products
training of restaurant and pub teams detailed health and  
safety manual regular internal and external auditing of all sites 
auditing of supply chain and suppliers health and safety 
incentives and awards
the loss of key personnel or failure to manage  
succession planning
benchmarking of remuneration packages analysis of staff 
turnover performance appraisal and review system to retain 
existing talent longterm incentive plan
financial risks
increase in prices of key raw materials including foreign 
currency fluctuations wages overheads and utilities
rolling programme of securing longerterm contracts to mitigate 
shortterm pricing fluctuations energy efficiency programme
reversion of formerly sold or disposed leases following 
business failure of new occupiers
monitoring of sublet properties ongoing relationships with 
property agents
failure to meet banking covenants signed facility agreement monitoring of financial performance 
against covenant levels banking relationships significant levels 
of headroom against covenants
compliance risks
increased regulation of the food and beverage industry leading 
to higher costs
monitoring of developments and liaison with external authorities 
such as the food standards agency and department of health
breakdown in internal controls through fraud or error major 
failure of it systems
experienced staff in key roles segregation of duties internal 
and external audit processes audit committee role
changes to tax regime including vat corporation tax and 
income tax
ongoing monitoring in conjunction with external advisers
further information on the management of risks highlighted above is provided in the chief executive officer’s review of 
operations and group finance director’s report on pages 6 to 15 introduction business review governance financial statements
the restaurant group plc annual report 2010 23 
new sites opened
the expansion of our brands is a key driver of the group’s 
profitability as noted in the group finance director’s report 
potential new sites are subject to a rigorous appraisal process 
before they are presented to the board for approval this 
process ensures we maintain the quality of openings as  
well as the quantity of sites opened during 2010 the group 
opened 24 new sites 2009 19 and plans to open 22 to 27 
new restaurants during 2011 
ebitda
the ability of the group to finance its rollout programme  
is aided by strong cash flows from the existing business  
the group defines ebitda as operating profit before 
depreciation amortisation and nontrading items ebitda 
serves as a useful proxy for cash flows generated by 
operations and is closely monitored during 2010 the group 
generated £858m ebitda an increase of 8 on the 2009 
level of £796m 
operating profit margin
the board and management closely monitor profit margins 
as an indicator of operating efficiency within restaurants and 
across the group during 2010 the group adjusted operating 
margin was 126 2009 122 in addition the group 
closely scrutinises the returns on invested capital from  
new site openings and the average ebitda generated  
by restaurants
further information on these key metrics is provided in the 
chief executive officer’s review of operations and the group 
finance director’s report
internal control
the board is responsible for the group’s system of internal 
control and for reviewing its effectiveness in accordance  
with guidance for directors “internal control guidance for 
directors on the combined code” the “turnbull guidance” 
the board has ensured that there is an ongoing process for 
reviewing the effectiveness of the system of internal control 
including identifying evaluating and managing the significant 
risks faced by the group this process which is regularly 
reviewed by the board is carried out in conjunction with 
business planning and is documented in a risk register that 
has been progressively enhanced during the financial year 
and up to the date of approval of the annual report and 
accounts whilst acknowledging its overall responsibility for 
the system of internal control the board is aware that the 
system is designed to manage rather than eliminate the risk  
of failure to achieve business objectives and can only provide 
reasonable but not absolute assurance against material 
misstatement or loss
the group has wellestablished procedures which have been 
developed over many years which meet the requirements  
of the turnbull guidance a key control procedure is the 
daytoday involvement of executive members of the board  
in all aspects of the business and their attendance at regular 
management meetings at which performance against plan 
and business prospects are reviewed the group has 
established a monthly executive management meeting  
where the three executive directors senior operational 
managers and head of functional departments review group 
performance and issues affecting the group additionally  
the board seeks to continually strengthen the internal  
control system where this is consistent with improving the 
relationship between risk and reward the group’s associate 
company living ventures restaurants group limited does 
not fall under the same internal controls as the group the 
internal controls within the associate are discussed with 
management of that company during shareholder meetings 
and are considered to be appropriate for an entity of its size
other key features and the processes for reviewing 
effectiveness of the internal control system are  
described below
 terms of reference for the board and its subcommittees •	
including a schedule of matters reserved for the board  
and an agreed annual programme of fixed agenda items 
for board approval
 an established organisational structure with clear lines  •	
of responsibility and rigorous reporting requirements
 operational performance and operational matters are •	
considered at monthly meetings of the executive directors 
with senior management financial performance is 
monitored and action taken through weekly reporting  
to the executive directors and monthly reporting to the 
board against annual budgets approved by the board
 capital investment is regulated by a budgetary process •	
and authorisation levels with appraisals and post
investment reviews 
 comprehensive policy manuals setting out agreed •	
standards and control procedures these include human 
resources related policies information technology and 
health and safety the group employs a firm of external 
auditors to monitor restaurants on a regular basis for 
compliance with statutory and internal health and  
safety requirements
 an internal audit function headed by an experienced •	
internal auditor has access to all areas of the company 
and group’s business and reports into the board 24 the restaurant group plc annual report 2010
statement of directors’ responsibilities in relation  
to the accounts
the directors are responsible for preparing the annual 
report directors’ remuneration report and the financial 
statements in accordance with applicable law and 
regulations company law requires the directors to prepare 
financial statements for each financial year the directors  
are required by the international accounting standards “ias” 
regulation to prepare the group financial statements under 
international financial reporting standards “ifrss”  
as adopted by the european union the group financial 
statements are also required by law to be properly prepared 
in accordance with the companies act 2006 and article 4  
of the ias regulation
ias 1 requires that ifrs financial statements present fairly  
for each financial year the company’s financial position 
financial performance and cash flows this requires the 
faithful representation of the effects of transactions other 
events and conditions in accordance with the definitions and 
recognition criteria for assets liabilities income and expenses 
set out in the international accounting standards board’s 
“framework for the preparation and presentation of financial 
statements” in virtually all circumstances a fair presentation 
will be achieved by compliance with all applicable ifrss
however directors are also required to
properly select and apply accounting policies •	
 present information including accounting policies in  •	
a manner that provides relevant reliable comparable  
and understandable information and
 provide additional disclosures when compliance with the •	
specific requirements in ifrss are insufficient to enable 
users to understand the impact of particular transactions 
other events and conditions on the entity’s financial 
position and financial performance
the directors have elected to prepare the parent company 
financial statements in accordance with united kingdom 
generally accepted accounting practice united kingdom 
accounting standards and applicable law the parent 
company financial statements are required by law to give  
a true and fair view of the state of affairs of the company 
in preparing these financial statements the directors are 
required to
 select suitable accounting policies and then apply  •	
them consistently
 make judgements and estimates that are reasonable  •	
and prudent
 state whether applicable uk accounting standards  •	
have been followed subject to any material departures 
disclosed and explained in the financial statements and
 prepare the financial statements on the going concern •	
basis unless it is inappropriate to presume that the 
company will continue in business
the directors are responsible for keeping proper accounting 
records that disclose with reasonable accuracy at any time 
the financial position of the company and enable them to 
ensure that the parent company financial statements comply 
with the companies act 2006 they are also responsible for 
safeguarding the assets of the company and hence for taking 
reasonable steps for the prevention and detection of fraud 
and other irregularities 
the directors are responsible for the maintenance and 
integrity of the corporate and financial information included  
on the company’s website legislation in the united kingdom 
governing the preparation and dissemination of financial 
statements may differ from legislation in other jurisdictions
information provided to auditors
each of the current directors have taken all the steps that 
they ought to have taken to make themselves aware of any 
relevant information needed by the company’s auditors for 
the purpose of their audit and to establish that the auditors 
are aware of that information the directors are not aware  
of any relevant information of which the auditors are  
unaware this information is given and should be interpreted 
in accordance with the provisions of s418 of the companies 
act 2006
going concern
as referred to in the chief executive officer’s review of 
operations there are significant economic concerns facing the 
united kingdom and consumerfacing industries in particular 
the group finance director’s report also contains a summary
of the cash flows and borrowing position of the group 
further information on the group’s policies for capital risk 
management and financial risk management are set out 
below potential risk factors and uncertainties that could 
affect the business are listed above 
the group is highly cash generative as explained in the 
group finance director’s report and enjoys negative working 
capital as it generally does not give credit to its customers 
the group has a debt facility of £120m which matures in 
december 2012 and net debt at 2 january 2011 of £469m 
27 december 2009 £667m 
based on the group’s plans for 2011 and after making 
enquiries including preparation of reasonable trading 
forecasts consideration of current financing arrangements 
and current headroom for liquidity and covenant compliance 
the directors have a reasonable expectation that the group 
has adequate resources to continue operations for the 
foreseeable future for this reason they continue to adopt the 
going concern basis in preparing the financial statements
report of the directors
 continued introduction business review governance financial statements
the restaurant group plc annual report 2010 25 
capital risk management
the group manages its capital to ensure that it will be able  
to continue as a going concern while looking to maximise 
returns to shareholders the capital structure of the group 
consists of equity comprising issued share capital reserves 
and retained earnings debt finance leases and cash and 
cash equivalents the group monitors its capital structure  
on a regular basis through cash flow projections and 
consideration of the cost of financing its capital
in december 2007 the group completed a refinancing 
exercise as part of this the group has externally imposed 
borrowing requirements the group has a £120m revolving 
facility in place until december 2012 and a £10m overdraft 
facility under the terms of the £120m revolving facility the 
group is required to comply with its financing covenants 
whereby net interest charges must be covered at least four 
times by ebitda and net debt must not exceed three times 
ebitda these covenants are tested twice annually and  
are monitored on a regular basis the group remained  
within its external limits throughout 2010
financial risk management
the board of the restaurant group plc regularly reviews  
the financial requirements of the group and the risks 
associated therewith the group does not use complex 
financial instruments and where financial instruments are 
used it is for reducing interest rate risk the group does  
not use derivative financial instruments for trading purposes 
group operations are primarily financed from retained 
earnings and bank borrowings including an overdraft facility 
in addition to the primary financial instruments the group 
also has other financial instruments such as debtors 
prepayments trade creditors and accruals that arise  
directly from the group’s operations further information  
is provided in note 24 to the accounts
effective from 18 january 2008 the group entered into  
a three year interest rate swap for a notional amount  
of £25m from 18 january 2008 to 18 january 2011  
at a fixed rate of 492 plus margin on 8 february 2010 
this swap was terminated on payment of £10m
effective from 16 january 2009 the group entered into  
a further two interest rate swaps a two year interest rate 
swap for a notional amount of £20m at a rate of 270  
plus margin and a three year interest rate swap for  
a notional amount of £20m at a rate of 2975 plus margin  
on 9 february 2011 the three year swap was terminated  
on a payment of £04m
after the impact of the interest rate swaps the average rate  
of interest charged during the year on the group’s debt was 
281 2009 356 and the average yearend rate was 
298 2009 406 on 2010 results net interest was 
covered 219 times 2009 160 times by profit before tax 
interest and nontrading items based on year end debt  
and profits for 2010 a 1 rise in interest rates would  
reduce profits before tax and nontrading items by  
02 2009 05 and interest cover would reduce  
to 211 times 2009 149 times
at 2 january 2011 the group had gross borrowings 
attracting interest including overdraft of £500m 
2009 £700m and cash balances of £27m 2009 £28m
creditor payment policy
the company’s policy is to agree the terms of payments  
with its suppliers as and when a trading relationship is 
established the company ensures that the terms of 
payment are clear and its policy is to abide by the agreed 
terms provided the supplier meets its obligations  
at 2 january 2011 the company had no trade creditors  
the group had an average of 42 days 2009 41 days 
purchases outstanding in trade creditors
donations
no donations for political purposes have been directly made 
by the company during the year charitable events fund 
raising and sponsorship are organised by restaurants for 
organisations in their locality as described in the corporate 
responsibility section on pages 26 to 28
annual general meeting
a separate circular is included with the mailing of the annual 
report to shareholders setting out the resolutions to be 
voted on at the annual general meeting which is to take 
place at 11am on 11 may 2011 at the offices of maclay 
murray  spens llp one london wall london ec2y 5ab 
the board believes that the proposed resolutions to be put 
to the shareholders at the annual general meeting are in the 
best interests of shareholders and accordingly recommends 
that shareholders vote in favour of the resolutions as the 
directors intend to do in respect of their own beneficial 
shareholdings in the company
auditors
deloitte llp have expressed their willingness to continue  
as auditors and a resolution will be proposed at the annual 
general meeting for their reappointment
directors’ responsibilities statement
the directors confirm that to the best of their knowledge
1  the financial statements prepared in accordance with the 
applicable accounting standards give a true and fair view 
of the assets liabilities financial position and profit of the 
company and group and
2   the chairman’s statement chief executive officer’s review 
of operations group finance director’s report and report 
of the directors include a fair review of the development 
and performance of the business and the position of the 
company and group together with a description of the 
principal risks and uncertainties faced
by order of the board
robert morgan
company secretary
9 march 2011 26 the restaurant group plc annual report 2010
corporate responsibility
the restaurant group plc “trg” acknowledges that it has  
a significant role to play with regard to the community and 
wider environment in which it operates this statement sets 
out the principal areas of focus and activity that the group 
has undertaken to date and what the group is looking at for 
future development in managing its impact on customers 
employees communities and the wider environment
this is split into five sections
 our market – the area of business that our strategy  •	
is focused on
 our people – the group’s policies and actions towards  •	
our 10000 employees
 our communities – how trg interacts with those •	
communities from which our customers and employees 
are drawn
 our environment – the impact of trg on the wider •	
environment and how we are seeking to reduce this 
 our shareholders – those that have invested capital in  •	
the development of the restaurant group plc and to 
whom the directors and management of the group are 
accountable
our market
the restaurant group plc has focused its attention on 
markets in the united kingdom which have significant  
growth potential for a number of years dining out has been  
a growing market and partially as a result of this there has 
been an increased focus from customers and regulatory 
authorities on health issues relating to our sector we have 
seen initiatives on alcohol food in particular on calorie 
consumption and fat and salt content and smoking over 
recent years and these are set to continue to be a focus  
it is important that the group continues to monitor closely 
these developments and ensure that we offer our customers 
a broad range of choice in our restaurants including  
healthy options
healthy eating
healthy eating is a personal responsibility but trg 
acknowledges that as a provider of food and drink we have  
a role to play in providing appropriate options from which 
individuals may choose when they eat out trg strongly 
believes that we should offer our guests choices on the 
menu whilst we do not wish to be prescriptive we aim to 
provide a healthy choice at each menu point alongside more 
indulgent options for many people dining out is a treat and 
therefore the normal restrictions which may be applied to 
healthy eating on a daytoday basis are waived in favour of 
enjoyment and experience for example whilst completing 
the weekly shop a consumer may choose chocolate fudge 
cake for their weekend dessert as opposed to a piece  
of fruit during the week
the group is undertaking a process of monitoring nutritional 
content across its menus and as part of our ongoing menu 
review will look to develop the healthier options available  
to customers and to work with our suppliers to reduce salt 
content and calorific content the group has engaged with 
the food standards agency and department of health 
healthy catering initiatives and is committed to ensure  
that all menus feature lighter options and all children’s meals 
come with a choice of carbohydrate alternatives and a 
complementary portion of salad or vegetables and to work 
with our suppliers to source lower salt saturated fat and 
calorie versions of ingredients where possible
hydrogenated fats 
in light of uk government and consumer focus with  
regard to consumption of products containing high levels  
of fat particularly saturated fats and artificial hydrogenated 
transfats which have been linked to potential risks to 
cardiovascular health we conducted a detailed review  
of our suppliers and our menu ingredients in conjunction  
with our external food safety consultants
 we have worked closely with all of our suppliers  •	
to identify the types and levels of fats and oils in  
our ingredients to facilitate a programme of removal 
replacement or reduction whilst maintaining our  
required quality standards
 the vast majority of our ingredients 99 are now  •	
free from hydrogenated fats and oils
 since august 2007 we have prohibited the supply of new •	
ingredients containing added hydrogenated fats and oils
 we continue to work closely with all of our suppliers to •	
identify and progress opportunities for reducing overall 
levels of saturated fat wherever possible and to provide 
healthier choices
  whilst some transfats occur naturally and are found in small 
amounts in meat and dairy products concerns have been raised 
about artificial transfats formed during a food manufacturing 
process called hydrogenation that turns oils into solidsemisolid 
fats these hydrogenated fatsoils can be found in products such 
as biscuits cakes margarine processed foods and cooking oils
other initiatives
all our red meat is supplied from producers in the uk and 
ireland and we have taken significant steps to reduce our 
“food miles” this process will continue into 2011 with  
a focus on improving our supply chain efficiency and 
reducing the number of deliveries and therefore food miles 
to our restaurants our concessions division sources eggs 
from the happy eggs company who operate higher welfare 
standards for their chickens 
trg is a member of the supplier ethical data exchange 
“sedex” which facilitates measurement and improvement 
in ethical business practices across the supply chain  
120 of our food suppliers and 18 other nonfood suppliers 
provide information describing their procedures and practices 
to the group via sedex
as in previous years there continue to be no known 
genetically modified foods in any product the group uses  
and new suppliers are required to confirm that they will not 
provide the group with such products we are also working 
with our suppliers to target and remove the “southampton 
institute” colourings that can cause hyperactivity in children 
and this will remain an ongoing focus during 2011 introduction business review governance financial statements
the restaurant group plc annual report 2010 27 
drink aware
all our restaurants operate an “are you 21” policy whereby 
we will ask for proof of identification to anyone who appears 
to be under 21 we also do not permit the sale of alcohol  
to under 18’s even if the alcohol is for consumption with  
a meal all of our restaurants offer a wide range of non
alcoholic drinks including fruit juices carbonates minerals 
and nonalcoholic cocktails and tap water is available for 
customers free of charge
smoking
from 1 july 2007 we have complied fully with the legislation 
throughout the united kingdom which has banned smoking 
in public areas
our people
the most important asset any company can have is its 
people at the restaurant group plc we strive to nurture  
our individuals to build great teams anyone has the potential 
to develop within our company and we endeavour to give 
them the tools and knowledge to encourage this this is the 
key to any successful business and our team is one of which 
we are especially proud
we employ approximately 10000 people and continue  
to increase this number as we expand our business  
the group opened a further 24 restaurants during 2010  
and created approximately 700 jobs for the local communities 
in the process
our policies ensure that we offer equal rights regardless of 
age colour gender sexual orientation disability or religion 
this gives us a diverse group of employees able to meet the 
challenges our market presents we have a fair and open 
recruitment process with clear terms of employment and we 
have developed a new website wwwtherestaurantgroup
jobs to allow easier access to available jobs for potential 
employees across our group all staff are provided with a 
contract of employment and copies of our staff handbook 
along with other policies to ensure everyone is aware of our 
rules expectations and procedures including grievance and 
disciplinary issues the group has an ethical dealings policy 
in place which incorporates a strict prohibition on bribery and 
corruption the group also has a defined termination policy 
should this be required 
recently there has been a stronger focus on ensuring the 
recruitment of our teams complies with current legislation 
with the uk border agency instigating regular visits to 
employers to check the validity of our employees’ rights  
to work in the uk we have instigated robust measures  
to prevent the possibility of trg contravening the rules 
the restaurant group plc pays all of its employees at least 
the national minimum wage and does not utilise tips in  
any form to make up this rate all gratuities are paid to the 
employees with credit card tips attracting only the usual  
tax deductions but unlike some of our competitors no 
administration fee is taken by the company
the group allocates considerable resources to provide high 
quality training to our teams training begins on the first day 
and is an ongoing process of development and support  
our training team is fully qualified and delivers high quality 
courses as well as guiding new and established team 
members throughout their development 
with our portfolio of sites it is vital that our communication  
is of a very high standard each day branch staff are given 
team briefings weekly meetings for staff and management 
are held and weekly communications packs are issued from 
head office to each brand our senior managers are out  
in the business extensively and interact daily with their branch 
management and team members to ensure full twoway 
communication is present throughout the business
the health and safety of our customers and employees is of 
paramount importance the group has extensive procedures 
to ensure we mitigate risks to our guests and teams as far  
as possible we have very clear procedures and standards  
in place and to enforce these we employ external auditors 
and carry out benchmarking of our restaurants we have also 
significantly increased the level of training in health and safety 
matters across the group in recent years to further enhance 
the clean safe environment for our customers and staff 
our communities
active involvement in the local communities around our 
restaurants and pub restaurants is important to the 
restaurant group plc whilst we operate successful national 
brands our focus is on local community marketing whether 
this is for frankie  benny’s with almost 200 restaurants  
or the individual pub at the heart of a village community  
the restaurant group supports staff fundraising activities  
at a brand and local level 
during 2010 we engaged in a number of local and national 
charitable events
 the frankie  benny’s teams across the country worked •	
with three regional charities in scotland we raised over 
£50000 with chas children’s hospices in scotland  
we sponsored the christie a leading cancer centre based 
in manchester and raised over £40000 and also raised 
over £23000 for the macmillan cancer charity these 
monies were raised from customers and staff through 
local events raffles and theme and fancy dress nights
 frankie  benny’s continues its initiative to support local •	
junior sports teams across the country providing new 
sports kit for more than 110 local teams in 2010 
 chiquito teams raised over £7000 in 2010 during their •	
cinco de mayo fiesta for casa alianza a homeless 
children’s charity in mexico the brand went on to support 
this charity later in the year on hearing that one of their 
children’s homes had been burned down chiquito 
donated 50p for every “like” that they gained  
on facebook and raised a total of £1800 and
 our pubs undertake a number of small fundraising •	
initiatives for local charities in their communities 28 the restaurant group plc annual report 2010
corporate responsibility
 continued
we are proud of our frankie  benny’s schools programme 
which supports the primary key stages curriculum  
this encourages primary school classes to visit their local 
frankie  benny’s restaurant to learn about the restaurant 
business food hygiene and health and safety and to have the 
opportunity to make and bake their own pizzas during 2010 
we held approximately 450 such visits across the country – 
over 12000 pupils visited frankie  benny’s as part of  
this initiative
our environment
during 2010 we have undertaken a number of developments 
regarding the group’s commitment to mitigating its impact on 
the environment not only are the attitudes and expectations 
of our customers changing over time but we recognise that 
the group’s activities impact the natural environment most 
significantly with regard to energy consumption and carbon 
emissions water consumption and the creation and removal 
of waste innovative regulatory mechanisms are being 
introduced that may in future create a direct link between 
environmental outcomes and financial benefits or penalties 
we have established a close relationship with the carbon 
trust who advise the group on best practice and ensure 
energy consciousness is at the heart of our strategic 
objectives covering premises design and construction 
heating lighting ventilation and food production trg is 
working towards achieving the carbon trust standard
we have a multidisciplinary team working on reducing  
our energy consumption through operational practices and 
staff awareness premises design and the improved use of 
technology to monitor and control our use of energy water 
and waste 
we recognise that lasting change in energy consumption by 
the group will require changes in behaviour for our whole 
team the provision of accurate and timely management 
information covering energy consumption is an essential tool 
supporting the change a webbased energyinformation 
portal to provide real time consumption data to restaurants 
and our operators has been developed in association  
with our energy consultants and allows us to target more 
inefficient sites and challenge our teams through league 
tables to improve their energy efficiency 
we have also launched an energy saving campaign to all 
sites providing information to help our staff drive energy 
efficiency by february 2011 we had installed automated 
meter readers “amrs” to supplement halfhourly monitoring 
of electricity supplies at 98 of our available leisure division 
businesses and 96 of available sites for gas supplies
we have installed an equipment monitoring system in one 
frankie and benny’s restaurant to allow us to monitor all 
electrical and gas equipment on a half hourly basis and test 
out new energy saving replacement equipment this has 
already led to three changes in the equipment that is installed 
in a standard frankie and benny’s and during 2011 we  
will monitor the savings in energy consumption from this 
restaurant and we are working with the carbon trust and 
other external advisers to develop further environmental 
efficiencies in our building design and equipment used  
in our operations
we opened a new frankie  benny’s restaurant in 2010 
which includes heat recovery systems energy saving lighting 
and low energy hand dryers as well as solar panels we will 
review the energy performance of this site with a view to 
include energy and financially efficient equipment in other 
new restaurants
 reducing the resources we use and the waste we •	
generate is also a key objective for the group 
 trg recycled over 650000 litres of used cooking oil  •	
an increase of approximately one third on the previous 
year’s level of recycled cooking oil our contractor  
supplies a biodiesel production facility
• 	 	 k i ds ’ 	 p a c k s 	 i n 	 f r a nk i e 	  	 b e nn y ’ s 	 a n d 	 c hi quit o 	 a r e 	 n o w	
made from 75 recycled material frankie and benny’s 
packs are now packaged in paper bags rather than  
plastic to reduce the period required for decay and
• 	 	 w a s t e 	 g la s s 	 a n d 	 c a r dbo a r d 	 i s 	 c o l l e ct e d 	 f or 	 r e c y c l i n g	 
at over 90 of our businesses where we control  
the collection
our shareholders
the group has had a clear strategy since 2001 – to deliver 
value for shareholders by focusing on sectors within the 
eating out market that offer high barriers to entry where  
we can generate sustainable and growing cash flows and 
which offer high returns on investment this has led the 
group to focus investment into the leisure division and our 
concessions division which operates principally on airports 
the group has had a progressive dividend policy and has 
had a strong track record of growing profits and dividends  
for shareholders
the chairman’s statement chief executive officer’s review  
of operations and group finance director’s report provide 
further detail on the group’s strategy performance during 
2010 and prospects for the group introduction business review governance financial statements
the restaurant group plc annual report 2010 29 
introduction
this report has been prepared in accordance with schedule 
8 of the accounting regulations under the companies act 
2006 the report also meets the relevant requirements  
of the listing rules of the financial services authority  
and describes how the board has applied the principles of 
good governance relating to directors’ remuneration in the 
combined code as required by the regulations a resolution 
to approve the report will be proposed at the annual general 
meeting of the company to be held on 11 may 2011 at 
which the financial statements are subject to approval
the act requires the auditors to report to the company’s 
members on the part of the directors’ remuneration report 
subject to audit and to state whether in their opinion that 
part of the report has been properly prepared in accordance 
with schedule 8 of the accounting regulations under the 
companies act 2006 the report has therefore been divided 
into separate sections for audited and unaudited information
unaudited information
remuneration committee
the company has established a remuneration committee 
“the committee” which is constituted in accordance with the 
recommendations of the combined code the members of 
the committee during the year were tony hughes simon 
cloke from 26 march 2010 and john jackson to 6 may 
2010 who were independent nonexecutive directors  
the committee is chaired by tony hughes
none of the committee has any personal financial interest  
in the company other than as shareholders the committee 
makes recommendations to the board no director plays  
a part in any discussion about his own remuneration  
in determining the executive directors’ remuneration for the 
year the committee consulted alan jackson nonexecutive 
chairman about its proposals
hewitt new bridge street a trading name of aon hewitt 
limited part of aon corporation is the independent adviser 
to the remuneration committee neither hewitt new bridge 
street nor any other part of aon corporation provided other 
services to the company during the year
remuneration policy
executive remuneration packages are designed to attract 
motivate and retain executive directors of the high calibre 
needed to progress and develop the group and to reward 
them for top quartile sector performance and enhancing 
value to shareholders the performance measurement  
of the executive directors and the determination of their 
annual remuneration package are undertaken by the 
committee in addition the committee determines the 
remuneration for the chairman the remuneration of the  
other nonexecutive directors is determined by the board 
the company’s policy is that a substantial proportion of  
the remuneration of the executive directors should be 
performance related 
directors’ remuneration report
there are four main elements of the remuneration package 
for executive directors
basic annual salary and benefits •	
annual bonus payments •	
longterm incentive plan “ltip” awards and •	
pension arrangements •	
policy review
during 2010 a comprehensive review of the remuneration 
policy for executive directors was undertaken this was  
the first such review in over five years the committee  
has considered how best to structure the company’s 
remuneration policy to continue to incentivise and retain  
the management team as it continues to drive the business 
forward and deliver superior returns to shareholders  
the committee considered each of the four main aspects  
of the remuneration package for executive directors as part 
of the process ten of the company’s largest shareholders 
and major shareholder representative bodies were consulted 
following the review the committee determined that it would 
be appropriate to increase the maximum level of bonus 
available for outstanding performance to the chief executive 
officer and group finance director and to increase the 
maximum award that may be granted under the ltip in 
addition the basic salary and pension provision of the  
group finance director both of which were becoming 
increasingly below market were reviewed and aligned with 
market levels these changes are set out in more detail 
below the committee believes that these changes align  
the level of potential variable remuneration available to the 
executive management team with their peer group 
basic salary
an executive director’s basic salary is determined by the 
committee prior to the beginning of each year and when  
an individual changes position or responsibility in deciding 
appropriate levels the committee considers the group  
as a whole and by reference to remuneration levels at other 
companies in the leisure and hospitality sectors 
following a recommendation from the executive directors  
to hold salaries the remuneration committee determined  
at the december 2008 salary review that no increase to the 
basic salary of executive directors would be applied for the 
2009 financial year at the december 2009 review it was 
determined that basic salaries for executive directors should 
increase modestly for the 2010 financial year with such 
increases capped at 15 this was below the average salary 
increase of 2 provided to other employees in the group 
following a review of salary levels for 2011 the remuneration 
committee concluded that the salary for stephen critoph 
should be increased to £270000 to bring mr critoph  
closer in line with midmarket levels and recognising his 
performance increases to the basic salaries for andrew page 
and trish corzine for 2011 were below the average for other 
employees of 3  30 the restaurant group plc annual report 2010
directors’ remuneration report
 continued
basic salary
2008
£
2009
£
2010
£
201 1
£
andrew page 535000 535000 543000 558000
stephen critoph 240000 240000 243500 270000
trish corzine 230000 230000 233500 240000
in addition to basic salary the executive directors receive 
pension contributions and certain benefitsinkind principally 
a car or car allowance and health and life insurance
annual bonus payments
the annual bonus is based on the achievement of stretching 
profit before tax targets and personal objectives performance 
targets are set annually as part of the budgeting process and 
performance is reviewed against those targets at the end  
of the financial year following the review by the remuneration 
committee described above the maximum bonus that can  
be paid in respect of performance in 2011 will be increased 
from 100 of basic salary to 150 of basic salary for the chief 
executive officer and to 125 of basic salary for the group 
finance director the bonus will remain at 100 of basic salary 
for the executive director of the concessions division 
in return for the increased bonus potential the committee 
has set commensurately tougher performance targets and 
any bonus payment above 100 of basic salary must be 
invested in company shares which must be held for three 
years actual bonus payments for 2010 are presented in the 
emoluments table on page 32
longterm incentives
the company operates the 2005 longterm incentive  
plan “ltip” or “plan” and the 2003 save as you earn 
“saye” scheme under which awards may be granted  
to executive directors 
longterm incentive plan
the 2005 ltip is the primary longterm incentive scheme  
of the company under the plan individuals may receive  
an award of conditional free shares “conditional awards” 
with a face value at grant of up to 100 of salary per annum 
vesting three years after grant subject to performance 
conditions and continued employment in addition the plan 
has the flexibility to grant conditional awards on a matching 
basis pro rata to the number of shares purchased via the 
annual bonus “matching awards” matching awards may  
be granted over shares worth up to 375 of basic salary  
per annum
during 2010 the committee has reviewed the composition  
of award limits under this scheme following this review and 
in consultation with the company’s major shareholders  
and representative bodies the committee concluded that 
shareholder approval should be sought at the forthcoming 
annual general meeting to increase
 the conditional award limit from 100 to 150 of basic •	
salary and
 the matching award limit from 375 to 50 of basic •	
salary pro rata to the number of shares purchased via  
the annual bonus
subject to shareholder approval total ltip opportunity will 
therefore be 200 of basic salary subject to 50 of basic 
salary being invested into the matching plan 
for awards to be made in 2011 conditional award levels will 
be set at 150 of basic salary for the chief executive officer 
and 100 of salary for the group finance director and  
the executive director of the concessions division and 
matching award levels will be up to 50 of basic salary for  
all three individuals awards will continue to be structured  
with a combination of total shareholder return “tsr” and 
earnings per share “eps” performance conditions
 the performance condition attached to 50 of the •	
conditional awards will require average annual eps 
growth from 3 january 2011 to 31 december 2013 of 
between rpi plus 4 to rpi plus 10 per annum for 
between 30 and 100 of this part of the award  
to vest ie between 15 and 50 of the total award
 the performance condition attached to the other 50 of •	
the conditional awards will be based on tsr performance 
measured against the constituents of the ftse travel  
leisure index excluding airlines over a single threeyear 
period from 2011 to 2014
 awards will vest on a straight line basis between minimum •	
and maximum thresholds
 for matching awards there will be a 031 match for •	
average eps growth of rpi plus 4 per annum rising on  
a straight line basis to the full 11 match for average eps 
growth of rpi plus 10 per annum
the combination of eps and tsr performance conditions 
provides a balance between rewarding management for 
growth in sustainable profitability and stock market out
performance the eps target range will require growth  
from the current all time high level of profitability and the  
tsr condition will be based from a strong recent  
share price performance
performance against the tsr and eps targets will be 
independently calculated and reviewed by the committee
shareholding guidelines
the company operates shareholding guidelines for executive 
directors linked to the outturn of the plan at the time 
conditional and matching awards vest under the plan  
or any other executive plan established in the future there  
is a requirement to retain no fewer than 50 of the shares 
net of taxes vesting under an ltip award until a shareholding 
with a market value calculated by reference to purchase 
price in line with the policy is achieved following the 
committee’s review shareholding guidelines have been 
increased to 200 of basic salary in respect of the chief 
executive officer and 150 in respect of the group finance 
director the guideline for the executive director of the 
concessions division remains at 100 of basic salary  introduction business review governance financial statements
the restaurant group plc annual report 2010 31 
saye scheme
the company also operates an saye share option scheme 
for eligible employees under which options may be granted at 
a discount of up to 20 of market value eligible employees 
are full time employees and executive directors who have 
worked for the group for at least one year under the terms  
of the saye scheme the eligible employees are able to 
purchase shares under a threeyear savings contract awards 
under the saye scheme were made in 2004 2006 2008  
and 2010 to eligible employees and directors
pension arrangements
executive directors have individual pension arrangements  
in the form of personal pension plans the company makes  
a contribution of 20 of basic salary for the chief executive 
officer and group finance director with the latter’s 
contribution increased from 10 of basic salary from  
january 2011 and 10 of salary for the executive director  
of the concessions division towards funding each executive 
director’s pension plan to the extent that this funding 
exceeds the relevant current hmrc limit the surplus may  
be paid as a salary supplement there are no unfunded 
pension promises or similar arrangement for directors
performance graph
as required by the regulations the graph below compares 
the company’s tsr performance with the ftse 350 travel 
and leisure share index for each of the past five years
the ftse 350 travel and leisure share index has been 
selected for this comparison because it is the index most 
relevant to gauging the company’s relative performance  
this graph shows the value by 31 december 2010 of  
£100 invested in the restaurant group plc on 31 december 
2005 compared with the value of £100 invested in the ftse 
allshare index and the ftse 350 travel and leisure  
share index
 
directors’ contracts
it is the company’s policy that executive directors should 
have contracts with an indefinite term providing for a 
maximum of one year’s notice however it may occasionally 
be necessary to offer longer initial notice periods to new 
directors all executive directors have contracts which are 
subject to one year’s notice by either party in the event of 
early termination including following a change of control  
in the company the directors’ contracts provide for 
compensation in line with their contractual notice period 
the details of the executive directors’ contracts are 
summarised in the table below
date of contract notice period
andrew page 28 august 2002 1 year
stephen critoph 7 july 2004 1 year
trish corzine 31 march 2003 1 year
appointments outside the group
executive directors are entitled to accept appointments 
outside the company or group and there is no requirement 
for directors to remit any fees to the restaurant group plc 
andrew page is a nonexecutive director of arena leisure plc 
and received fees as a nonexecutive director of arena 
leisure plc of £50000 in 2010 2009 £45000
nonexecutive directors
the service contracts of the nonexecutive directors were 
each set for an initial threeyear period thereafter renewable 
for periods of three years they are required to submit 
themselves for reelection every three years and in 
accordance with the group’s compliance with best practice 
under the uk corporate governance code will make 
themselves available for reelection on an annual basis  
going forward from 2011 the nonexecutive directors’ 
appointments were made as follows
date of
 appointment as
nonexecutive
director notice period
alan jackson 9 november 2005 1 year
tony hughes 1 january 2008 nil
simon cloke 26 march 2010 nil
  alan jackson was previously executive chairman of the company 
and was appointed in march 2001 from 1 january 2006 he has 
held the position of nonexecutive chairman
all nonexecutive directors have specific terms of 
engagement and their remuneration with the exception of 
alan jackson is determined by the board based on a review 
of fees paid to nonexecutive directors of similar companies 
and reflects the time commitment and responsibilities of  
each role the basic fee paid to the nonexecutive directors 
excluding alan jackson in the year was £50000 2009 
£50000 pro rated by tenure of service alan jackson’s fee 
which is set by the remuneration committee was £300000 
2009 £300000 no increases to the fees of nonexecutive 
directors have been made in respect of 2011
0
50
100
150
200
250
300
value £
source thomson reuters
31 dec 05 31 dec 06 31 dec 07 31 dec08 31 dec 09 31 dec 10
the restaurant group
ftse allshare index
ftse 350 travel and leisure index 32 the restaurant group plc annual report 2010
audited information
aggregated directors’ remuneration
the total amounts for directors’ remuneration were as follows
executive
£’000
2010
nonexecutive
£’000
total
£’000
2009
total
£’000
emoluments 2096 440 2536 2632
money purchase pension contributions 156 – 156 155
2252 440 2692 2787
a emoluments
i executive
 2010 2009
basic salary
£’000
bonus 
£’000
benefits
in kind
£’000
total
£’000
total
£’000
andrew page 543 543 29 1115 1204
stephen critoph 244 244 15 503 544
trish corzine 233 233 12 478 449
1020 1020 56 2096 2197
the annual bonus payments recognise the strong financial operational and personal performance of the executive directors 
over 2010 which resulted in the stretching profit before tax range set at the start of the year being exceeded
ii nonexecutive
2010 2009
fees
£’000
benefits 
in kind
£’000
total
£’000
total
£’000
alan jackson 300 30 330 335
tony hughes 50 1 51 50
simon cloke from 26 march 2010 38 – 38 –
john jackson to 6 may 2010 21 – 21 50
409 31 440 435
b pension schemes
the executive directors are members of money purchase schemes where an executive director’s entitlement to  
a contribution exceeds the allowable limit set by hmrc a salary supplement may be payable up to but not exceeding  
the level of entitlement contributions paid as pension contributions or salary supplements by the group in respect of the 
executive directors were as follows
2010
£’000
2009
£’000
andrew page 109 108
stephen critoph 24 24
trish corzine 23 23
156 155
directors’ remuneration report
 continued introduction business review governance financial statements
the restaurant group plc annual report 2010 33 
longterm incentives
aggregate emoluments disclosed above do not include any amounts for the longterm incentives granted to or held by the 
directors the policy for longterm incentives is described earlier in this report and the table below sets out the outstanding 
awards held by executive directors
name of director scheme
at 
28 december
2009 granted lapsed exercised
at 
2 january 
2011
exercise 
price
date from 
which 
exercisable
expiry
 date
alan jackson oneoff 200000 – – 200000 – 450p 562004 562011
2003 1 78 11 4 – – 1 78 114 – 674p 47 2006 47 2013
2003 200000 – – 200000 – 977p 4102007 4102014
2003 250000 – – 150000 100000 1344p 442008 442015
andrew page 2003 200000 – – 200000 – 977p 4102007 4102014
2003 227679 – – 127 679 100000 1344p 442008 442015
ltip 1 145929 – 27396 118533 – – 332010 392010
ltip 2 391 71 – – 39171 – – 332010 392010
ltip 3 645689 – – – 645689 – 932011 992011
ltip 4 90084 – – – 90084 – 932011 992011
2008 saye 7680 – – – 7680 1250p 162011 1122011
ltip 5 780208 – – – 780208 –
publication of
2011 results
6 months 
after vesting
ltip 6 111457 – – – 111457 –
publication of
2011 results
6 months 
after vesting
ltip 7 – 264878 – – 264878 –
publication of
2012 results
6 months 
after vesting
ltip 8 – 97865 – – 97865 –
publication of
2012 results
6 months 
after vesting
stephen critoph 2003 235000 – – 235000 – 977p 4102007 4102014
2003 50000 – – 50000 – 1344p 442008 442015
ltip 1 69124 – 12968 56156 – – 332010 392010
ltip 2 20340 – – 20340 – – 332010 392010
ltip 3 248275 – – – 248275 – 932011 992011
ltip 4 58188 – – – 58188 – 932011 992011
ltip 5 300000 – – – 300000 –
publication of
2011 results
6 months 
after vesting
ltip 6 75000 – – – 75000 –
publication of
2011 results
6 months
 after vesting
ltip 7 – 118780 – – 118780 –
publication of
2012 results
6 months 
after vesting
ltip 8 – 43902 – – 43902 –
publication of
2012 results
6 months 
after vesting
2010 saye – 4932 – – 4932 1840p 162013 1122013
trish corzine 2003 100000 – – 100000 – 977p 4102007 4102014
2003 90000 – – 90000 – 1344p 442008 442015
ltip 1 64516 – 12103 52413 – – 332010 392010
ltip 2 18433 – – 18433 – – 332010 392010
ltip 3 237931 – – – 237931 – 932011 992011
ltip 4 54310 – – – 54310 – 932011 992011
2008 saye 7680 – – – 7680 1250p 162011 1122011
ltip 5 287500 – – – 287500 –
publication of
2011 results
6 months 
after vesting
ltip 6 71874 – – – 71874 –
publication of
2011 results
6 months 
after vesting
ltip 7 – 113902 – – 113902 –
publication of
2012 results
6 months 
after vesting
ltip 8 – 42073 – – 42073 –
publication of
2012 results
6 months 
after vesting 34 the restaurant group plc annual report 2010
ltip 1 – conditional awards vesting of 50 of these awards was based on eps growth of the 2009 results compared with the 2006 
results and 50 based on relative tsr performance over the three financial years to 31 december 2009 the eps performance condition 
range of rpi410 pa was achieved in full and consequently those shares pertaining to the eps criteria vested in full for the tsr 
performance condition the performance of the group was between the median and upper quartile for the relevant period and consequently 
625 of the tsr element of the award vested 
ltip 2 – matching awards vesting was based on eps growth of the 2009 results compared with the 2006 results and the rpi410 
pa performance condition was met in full consequently the matching shares vested in full
ltip 3 – conditional awards vesting of 50 of these awards was based on eps growth of the 2010 results compared with the 2007 
results and 50 based on tsr performance over the three financial years to 31 december 2010 the rpi410 pa eps growth range 
was achieved partially and 825 of the eps part of the award will vest for the tsr performance condition the performance of the group 
was above upper quartile so the condition was achieved in full 
ltip 4 – matching awards vesting was based on eps growth of the 2010 results compared with the 2007 results the rpi410 pa 
eps growth range was achieved partially and 825 of the award will vest 
ltip 5 – conditional awards and ltip 6 – matching awards vesting is based on tsr performance of the group against a comparator 
group comprising the ftse 350 travel and leisure sector excluding airlines over the three years to 1 march 2012 with 30 of the award 
vesting at median performance and full vesting for top quartile performance
ltip 7 – conditional awards vesting of 50 of the award is based on tsr performance of the group against a comparator group 
comprising the ftse 350 travel and leisure sector excluding airlines over the three years to 31 december 2012 with 30 of this part  
of the award vesting at median performance and full vesting of this part of the award for top quartile performance the remaining 50  
of the award is based on eps growth of the 2012 results compared with the 2009 results with a requirement for average annual growth  
of between rpi410 pa
ltip 8 – matching awards vesting is based on eps growth of the 2012 results compared with the 2009 results with a requirement for 
average annual growth of between rpi410 pa
during 2010 certain directors exercised options under the 2003 options schemes long term incentive plan and saye 
scheme that had vested details of these transactions during 2010 are detailed below
name of director scheme
number of 
options 
exercised
exercise 
price
market price 
at date of 
exercise
gain on
 exercise
 before tax 
£’000
alan jackson oneoff 200000 450p 2153p 341
2003 scheme 1 78 114 674p 2245p 280
2003 scheme 200000 977p 2245p 254
2003 scheme 150000 1344p 2300p 143
andrew page 2003 scheme 200000 977p 2260p 257
2003 scheme 1 27679 1344p 2260p 11 7
ltip 157704 – 2260p 356
stephen critoph 2003 scheme 235000 977p 2153p 276
2003 scheme 50000 1344p 2153p 40
ltip 76496 – 2150p 164
trish corzine ltip 70846 – 2150p 152
2003 scheme 100000 977p 2300p 132
2003 scheme 90000 1344p 2300p 86
directors’ remuneration report
 continued introduction business review governance financial statements
the restaurant group plc annual report 2010 35 
for comparative information during 2009 the following exercises of shares were made by directors
name of director scheme
number of
options
exercised
exercise 
price
market price 
at date of
 exercise
gain on
exercise 
before tax
£’000
alan jackson ltip 241070 – 1292p 311
andrew page ltip 24787 4 – 1500p 372
2003 22321 1344p 1550p 5
stephen critoph saye 5843 1600p 1948p 2
ltip 14941 1 – 1292p 193
2003 15000 977p 1540p 8
trish corzine ltip 136277 – 1400p 191
2003 10000 1344p 1540p 2
approval
this report was approved by the board of directors on 9 march 2011 and signed on its behalf by
tony hughes
chairman of the remuneration committee 36 the restaurant group plc annual report 2010
this report sets out the work carried out by the audit committee of the board with reference to the guidance on audit 
committees “the smith report” attached to the combined code on corporate governance
audit committee composition
the audit committee is appointed by the board from the nonexecutive directors of the company 
the committee was chaired by john jackson until his retirement from the board on 6 may 2010 and has been chaired by 
simon cloke since tony hughes is also a member of the committee during 2010 the audit committee has not been in 
compliance with the best practice guidelines of the smith report due to the number of nonexecutive directors on the board 
of the restaurant group plc
the committee regularly invites the external auditors the chairman of the board the chief executive officer and the group 
finance director to its meetings the company secretary attends the meetings and is secretary to the committee 
discussions are held in private when appropriate
responsibilities of the audit committee
the responsibilities of the audit committee are set out in its terms of reference and the principal matters are to
 provide additional assurance regarding the integrity quality and reliability of financial information used by the board and  •	
in financial statements issued to shareholders and the public
 review the company’s internal procedures for control and compliance with regard to financial reporting to satisfy itself that •	
these are adequate and effective
 review the principles policies and practices adopted in the preparation of the group’s financial statements to ensure they •	
comply with statutory requirements and generally accepted accounting principles
 receive reports from the group’s external auditors concerning external announcements in particular the annual report •	
and accounts and the interim report
 develop and oversee the company’s policy regarding the engagement of external auditors review the independence  •	
of the external auditors review the provision of nonaudit services provided by the external auditors and review 
remuneration paid to the external auditors and
consider any other matter that is brought to its attention by the board or the external auditors •	
the board as a whole reviews the risks facing the group and the processes on mitigating those risks on a regular  
and formal basis the board also reviews the work carried out by the internal audit function
audit committee frequency
the committee meets at least twice a year two meetings of the committee were held during 2010 with full attendance
audit committee process
the committee discharges its responsibilities as defined in its terms of reference through audit committee meetings during 
the year at which detailed reports are presented for review from time to time the committee commissions reports from 
external advisers or company management either after consideration of the company’s major risks or in response to 
developing issues the committee has the opportunity to meet privately with the external auditors at least twice a year  
and liaises with company management in considering areas for review
during the year the committee considered the following matters
interim and full year financial results •	
the scope and cost of the external audit •	
the external auditor’s interim and full year reports •	
 nonaudit work carried out by the external auditors in accordance with the committee’s policy to ensure the safeguard  •	
of audit independence
the effectiveness of the external auditors and consideration of their reappointment and •	
the suitability of the group’s accounting policies and practices •	
the company’s public financial statements are reviewed by the committee in advance of their consideration by the board
audit committee report introduction business review governance financial statements
the restaurant group plc annual report 2010 37 
external auditor’s independence 
the committee has adopted a policy on the use of the external auditors for nonaudit work which is in compliance  
with the combined code the preapproved services may be summarised as follows
 audit related services including work related to the annual group financial statements audit subsidiary audits  •	
and local statutory accounts and
certain specified tax services including tax compliance tax planning and tax advice •	
other work to be carried out by the external auditors is subject to review by the audit committee
to fulfil its responsibility regarding the independence of the external auditors the audit committee takes into account  
the following
 the external auditors’ plan for the current year noting the role of the senior statutory audit partner who signs the audit •	
report and who in accordance with professional rules has not held office for more than five years 
the arrangements for daytoday management of the audit relationship •	
 a report from the external auditors describing their arrangements to identify report and manage any conflicts of interest •	
 the overall extent of nonaudit services provided by the external auditors in addition to its casebycase approval of the •	
provision of nonaudit services by the external auditors and
the past service of the auditors who were first appointed in 2007 •	
to assess the effectiveness of the external auditors the audit committee takes into account
the arrangements for ensuring the external auditors’ independence and objectivity •	
the external auditors’ fulfilment of the agreed audit plan and •	
the robustness and perceptiveness of the auditors in their handling of the key accounting and audit judgements •	
overview
as a result of its work during the year the audit committee has concluded that it has acted in accordance with its terms  
of reference the committee has reviewed the independence and objectivity of deloitte llp as external auditor and 
recommends their reappointment by shareholders at the annual general meeting to be held on 11 may 2011
on behalf of the audit committee
simon cloke
9 march 2011 38 the restaurant group plc annual report 2010
independent auditor’s report 
 to the members of the restaurant group plc
we have audited the group financial statements of the 
restaurant group plc for the 53 weeks ended 2 january 
2011 which comprise the consolidated income statement  
the consolidated statement of comprehensive income  
the consolidated statement of changes in equity the 
consolidated balance sheet the consolidated cash flow 
statement and the related notes 1 to 28 the financial 
reporting framework that has been applied in their 
preparation is applicable law and international financial 
reporting standards “ifrss” as adopted by the  
european union
this report is made solely to the company’s members  
as a body in accordance with chapter 3 of part 16 of the 
companies act 2006 our audit work has been undertaken 
so that we might state to the company’s members those 
matters we are required to state to them in an auditor’s report 
and for no other purpose to the fullest extent permitted  
by law we do not accept or assume responsibility to anyone 
other than the company and the company’s members as  
a body for our audit work for this report or for the opinions 
we have formed
respective responsibilities of directors and auditor
as explained more fully in the directors’ responsibilities 
statement the directors are responsible for the preparation 
of the group financial statements and for being satisfied that 
they give a true and fair view our responsibility is to audit  
and express an opinion on the group financial statements in 
accordance with applicable law and international standards 
on auditing uk and ireland those standards require us to 
comply with the auditing practices board’s ethical standards 
for auditors
scope of the audit of the financial statements
an audit involves obtaining evidence about the amounts  
and disclosures in the financial statements sufficient to give 
reasonable assurance that the financial statements are free 
from material misstatement whether caused by fraud or error 
this includes an assessment of whether the accounting 
policies are appropriate to the group’s circumstances and 
have been consistently applied and adequately disclosed  
the reasonableness of significant accounting estimates  
made by the directors and the overall presentation of the 
financial statements
opinion on financial statements
in our opinion the group financial statements
 give a true and fair view of the state of the group’s affairs •	
as at 2 january 2011 and of its profit for the 53 week 
period then ended
 have been properly prepared in accordance with ifrss  •	
as adopted by the european union and
 have been prepared in accordance with the requirements •	
of the companies act 2006 and article 4 of the  
ias regulation
opinion on other matter prescribed by the  
companies act 2006
in our opinion the information given in the report of the 
directors for the financial year for which the group financial 
statements are prepared is consistent with the group 
financial statements
matters on which we are required to report  
by exception
we have nothing to report in respect of the following
under the companies act 2006 we are required to report  
to you if in our opinion
 certain disclosures of directors’ remuneration specified  •	
by law are not made or
 we have not received all the information and explanations •	
we require for our audit
under the listing rules we are required to review
 the directors’ statement contained within the report  •	
of the directors in relation to going concern and
 the part of the corporate governance statement relating  •	
to the company’s compliance with the nine provisions of 
the june 2008 combined code specified for our review
 certain elements of the report to shareholders by the •	
board on directors’ remuneration
other matter
we have reported separately on the parent company financial 
statements of the restaurant group plc for the 53 week 
period ended 2 january 2011 and on the information in the 
directors’ remuneration report that is described as having 
been audited 
timothy steel senior statutory auditor
for and on behalf of deloitte llp
chartered accountants and statutory auditor
london united kingdom
9 march 2011 introduction business review governance financial statements
the restaurant group plc annual report 2010 39 
significant accounting policies
the restaurant group plc the “company” is a company 
incorporated and registered in scotland the consolidated 
financial statements of the company for the year ended  
2 january 2011 comprise the company and its subsidiaries 
together referred to as the “group” and the group’s interest 
in its associate 
a statement of compliance
the consolidated financial statements have been prepared in 
accordance with international financial reporting standards 
“ifrss” and its interpretations adopted by the international 
accounting standards board “iasb” and as adopted by the 
european union 
b going concern basis
the consolidated financial statements have been prepared on 
a going concern basis as after making appropriate enquires 
the directors have a reasonable expectation that the group 
has adequate resources to continue in operational existence 
for the foreseeable future at the time of approving the financial 
statements the principal risks and uncertainties facing the 
group and further comments on going concern are set out  
in the report of the directors on pages 21 to 25
c basis of preparation
the accounting year runs to a sunday within seven  
days of 31 december each year which will be a 52  
or 53 week period 
the financial statements are presented in sterling rounded 
to the nearest thousand they have been prepared on the 
historical cost basis except derivative financial instruments 
which are held at their fair value noncurrent assets and 
assets held for sale are stated at the lower of carrying  
amount and fair value less costs to sell 
the preparation of financial statements in conformity with 
ifrs requires management to make judgements estimates 
and assumptions that affect the application of policies and 
reported amounts of assets and liabilities income and 
expenses the estimates and associated assumptions are 
based on historical experience and various other factors that 
are believed to be reasonable under the circumstances the 
results of which form the basis of making the judgments 
about carrying values of assets and liabilities that are not 
readily apparent from other sources actual results may  
differ from these estimates
the estimates and underlying assumptions are reviewed  
on an ongoing basis revisions to accounting estimates  
are recognised in the period in which the estimate is revised  
if the revision affects only that period or in the period of the 
revision and future periods if the revision affects both current 
and future periods
accounting policies for the consolidated accounts
change in accounting policies
in the current financial year the group has adopted 
international financial reporting standard 3 “business 
combinations” revised 2008 and international accounting 
standard 27 “consolidated and separate financial 
statements“ revised 2008 there has been no impact  
on the consolidated financial statements on adoption  
of these standards
future accounting policies
at the date of authorisation of these financial statements  
the following standards and interpretations which have not 
been applied in these financial statements were in issue  
but not yet effective and in some cases had not yet been 
adopted by the eu
ifrs 9 financial instruments •	
ias 24 amended related party disclosures •	
ias 32 amended classification of rights issues •	
ifric 19  extinguishing financial liabilities •	
with equity instruments
ifric 14 amended  prepayments of a minimum  •	
funding requirement
improvements to ifrss may 2010 •	
 
the directors do not expect that the adoption of the 
standards listed above will have a material impact on the 
financial statements of the group in future periods 
d basis of consolidation
i subsidiaries
subsidiaries are entities controlled by the company control 
exists when the company has the power directly or indirectly 
to govern the financial and operating policies of an entity  
so as to obtain benefits from its activities in assessing 
control potential voting rights that presently are exercisable  
or convertible are taken into account regardless of 
management’s intention to exercise that option or warrant 
the financial statements of subsidiaries are included in the 
consolidated financial statements from the date that control 
commences until the date that control ceases
ii associates
associates are those entities in which the group has 
significant influence but not control over the financial and 
operating policies the consolidated financial statements 
include the group’s share of the total recognised gains and 
losses of associates on an equity accounted basis from the 
date that significant influence commences until the date that 
significant influence ceases when the group’s share of 
losses exceeds its interest in an associate the group’s 
carrying amount would be reduced to £nil and recognition  
of further losses is discontinued except to the extent that  
the group has incurred legal or constructive obligations  
or made payments on behalf of an associate 40 the restaurant group plc annual report 2010
accounting policies for the consolidated accounts
 continued
iii transactions eliminated on consolidation
intragroup balances and any gains and losses or income and 
expenses arising from intragroup transactions are eliminated 
in preparing the consolidated financial statements unrealised 
gains arising from transactions with associates are eliminated 
to the extent of the group’s interest in the entity unrealised 
losses are eliminated in the same way as unrealised gains 
but only to the extent that there is no evidence of impairment
e foreign currency
assets and liabilities in foreign currencies are translated  
into sterling at the rates of exchange ruling at the date of  
the balance sheet transactions in foreign currencies are 
translated into sterling at the rate of exchange at the date  
of the transaction the profit and loss accounts for overseas 
operations are translated at the average rate of exchange for 
the periods covered by the accounts exchange differences 
that relate to the net equity investment in overseas activities 
are taken directly to reserves 
f derivative financial instruments
the group uses derivative financial instruments where 
appropriate to hedge its exposure to interest rate risks arising 
from operational financing and investment activities in 
accordance with its treasury policy the group does not hold 
or issue derivative financial instruments for trading purposes 
however derivatives that do not qualify for hedge accounting 
are accounted for as trading instruments
derivative financial instruments are recognised initially at  
cost subsequent to initial recognition derivative financial 
instruments are stated at fair value the gain or loss on 
remeasurement to fair value is recognised immediately in  
the income statement however where derivatives qualify for 
hedge accounting recognition of any resultant gain or loss 
depends on the nature of the item being hedged none of  
the group’s derivatives currently qualify for hedge accounting
the fair value of interest rate swaps is the estimated amount 
that the group would receive or pay to terminate the swap  
at the balance sheet date taking into account current  
interest rates and the current creditworthiness of the swap 
counterparties
g property plant and equipment
items of property plant and equipment are stated at cost less 
accumulated depreciation see below and impairment losses 
see accounting policy l 
where parts of an item of property plant and equipment have 
different useful lives they are accounted for as separate items 
of property plant and equipment
leases in terms of which the group assumes substantially  
all the risks and rewards of ownership are classified as 
finance leases the owneroccupied property excluding land 
element acquired by way of finance lease is stated at an 
amount equal to the lower of its fair value and the present 
value of the minimum lease payments at inception of the 
lease less accumulated depreciation see below and 
impairment losses see accounting policy l lease payments 
are accounted for as described in accounting policy s
subsequent costs
the group recognises in the carrying amount of an item  
of property plant and equipment the cost of replacing part  
of such an item when that cost is incurred if it is probable  
that the future economic benefits embodied with the item will 
flow to the group and the cost of the item can be measured 
reliably all other costs are recognised in the income 
statement as an expense as incurred
depreciation
depreciation is charged to the income statement on a 
straightline basis over the estimated useful lives of each part 
of an item of property plant and equipment the estimated 
useful lives are as follows
freehold land indefinite
freehold buildings  50 years
long and short leasehold property   term of lease or 50 years 
whichever is lower
fixtures and equipment  310 years
motor vehicles  4 years
computer equipment  35 years
h intangible assets – goodwill
all business combinations are accounted for by applying the 
acquisition method goodwill represents amounts arising  
on acquisition of subsidiaries associates and joint ventures  
in respect of business acquisitions that have occurred since  
1 january 2004 goodwill represents the difference between 
the cost of the acquisition and the fair value of the net 
identifiable assets acquired
the classification and accounting treatment of business 
combinations that occurred prior to 1 january 2004 has not 
been reconsidered in preparing the group’s opening ifrs 
balance sheet at 1 january 2004
goodwill is stated at cost less any accumulated impairment 
losses goodwill is allocated to cash generating units and  
is formally tested biannually for impairment see accounting 
policy l in respect of associates the carrying amount of 
goodwill is included in the carrying amount of the investment 
in the associate
any excess of fair value of net assets over consideration on 
acquisition is recognised directly in the income statement introduction business review governance financial statements
the restaurant group plc annual report 2010 41 
i trade and other receivables
trade and other receivables are stated at their cost less 
impairment losses see accounting policy l
j stock
stock is stated at the lower of cost and net realisable value 
net realisable value is the estimated selling price in the 
ordinary course of business less the estimated costs of 
completion and selling expenses
k cash and cash equivalents
cash and cash equivalents comprise cash balances and  
call deposits bank overdrafts that are repayable on demand 
and form an integral part of the group’s cash management 
are included as a component of cash and cash equivalents 
for the purpose of the statement of cash flows
l impairment
the carrying amounts of the group’s assets are reviewed  
at each balance sheet date to determine whether there is  
any indication of impairment 
for property plant and equipment the carrying value  
of each cash generating unit “cgu” is compared to its 
estimated value in use value in use calculations are based  
on discounted cash flows over the remaining useful life of  
the cgu between 2 and 50 years the discount rate used  
is the rate believed by the board to reflect the risks associated 
with each cgu impairment losses are recognised in the 
income statement
for goodwill and assets that have an indefinite useful life  
the recoverable amount is estimated at each balance sheet 
date an impairment loss is recognised whenever the carrying 
amount of an asset or its cash generating unit exceeds its 
recoverable amount impairment losses are recognised in  
the income statement and are not subsequently reversed
m sharebased payment transactions
the share option programme allows group employees to 
acquire shares of the company and all options are equity
settled the fair value of options granted is recognised as an 
employee expense with a corresponding increase in equity 
the fair value is measured at grant date and spread over the 
period during which the employees become unconditionally 
entitled to the options the fair value of the options granted  
is measured using a stochastic model taking into account 
the terms and conditions upon which the options were 
granted the amount recognised as an expense is adjusted 
to reflect the actual number of share options that vest except 
where forfeiture is only due to market based conditions not 
achieving the threshold for vesting
n provisions
a provision is recognised in the balance sheet when the 
group has a present legal or constructive obligation as  
a result of a past event and it is probable that an outflow  
of economic benefits will be required to settle the obligation  
if the effect is material provisions are determined by 
discounting the expected future cash flows at a pretax rate 
that reflects current market assessments of the time value  
of money and where appropriate the risks specific to  
the liability
o deferred and current tax
corporation tax payable is provided on the taxable profit  
at the current rate deferred tax is recognised in respect  
of all temporary differences that have originated but not 
reversed at the balance sheet date except to the extent  
that the deferred tax arises from the initial recognition of 
goodwill temporary differences are differences between  
the carrying amount of the group’s assets and liabilities  
and their tax base
deferred tax is measured at the tax rates that are expected  
to apply in the periods in which the temporary differences  
are expected to reverse based on tax rates and laws that are 
enacted or substantively enacted by the balance sheet date 
deferred tax is measured on a nondiscounted basis
p pensions
the group makes contributions for selected employees into 
defined contribution pension plans and these contributions 
are charged to the income statement as they become 
payable the group does not operate any defined  
benefit plans
q onerous contracts
a provision for onerous contracts is recognised when the 
expected benefits to be derived by the group from a contract 
are lower than the unavoidable cost of meeting its obligations 
under the contract
r revenue
revenue represents amounts received and receivable for 
services and goods provided excluding value added tax  
and voluntary gratuities left by customers for the benefit  
of employees and is recognised at the point of sale 42 the restaurant group plc annual report 2010
accounting policies for the consolidated accounts
 continued
s expenses
i operating lease payments
payments made under operating leases are recognised in  
the income statement on a straightline basis over the term  
of the lease incentives to enter into an operating lease are 
also spread on a straightline basis over the lease term as  
a reduction in rental expense
ii finance lease payments
minimum lease payments are apportioned between the 
finance charge and the reduction of the outstanding liability 
the finance charge is allocated to each period during the 
lease term so as to produce a constant periodic rate of 
interest on the remaining balance of the liability
iii preopening expenses
property rentals and related costs incurred up to the  
date of opening of a new restaurant are written off to the 
income statement in the period in which they are incurred 
promotional and training costs are written off to the income 
statement in the period in which they are incurred
iv borrowing costs
debt is stated net of borrowing costs which are spread  
over the term of the loan all other borrowings costs are 
recognised in the income statement in the period in which 
they are incurred
t dividend policy
in accordance with ias 10 “events after the balance sheet 
date” dividends declared after the balance sheet date are  
not recognised as a liability at that balance sheet date and 
are recognised in the financial statements when they have 
received approval by shareholders
critical accounting judgements and key sources  
of estimation and uncertainty
in the process of applying the group’s accounting policies  
as described above management has made a number  
of judgements and estimations of which the following are  
the most significant
a impairment of carrying value of associate
the investment in living ventures restaurants group limited 
and the loan note of £104m receivable from a subsidiary of 
that company were fully provided against in the years ended 
30 december 2007 and 31 december 2006 following  
a review of the trading performance of the company the 
directors have concluded that this treatment is appropriate 
and no adjustment has been made in either the current  
or the previous year further details are provided in note 13
b impairment of goodwill and property plant  
and equipment
the group formally determines whether property plant and 
equipment and goodwill are impaired on a biannual basis 
this requires the group to determine the lowest level of 
assets which generate largely independent cash flows  
cash generating units or “cgu” and to estimate the value  
in use of these assets or cgus and compare these to their 
carrying value cash generating units are deemed to be 
individual units a collection of units or a brand depending on 
the nature of the trading environment in which they operate 
calculating the value in use requires the group to make an 
estimate of the future cash flows of each cgu and to choose 
a suitable discount rate in order to calculate the present  
value of those cash flows the discount rate used in the  
year ended 2 january 2011 for all cgus was based on the  
group’s weighted average cost of capital of 95 year ended  
27 december 2009 1096 as the directors believe there 
are broadly equal risks associated with each cgu no 
impairment is required in the year ended 2 january 2011 introduction business review governance financial statements
the restaurant group plc annual report 2010 43 
 53 weeks ended 2 january 2011 52 weeks ended 27 december 2009
note
trading
 business
£’000
non 
trading
£’000
total
£’000
trading
business
£’000
non 
trading
£’000
total
£’000
revenue 3 465704 – 465704 435743 – 435743
cost of sales
excluding preopening costs 4 379268 – 379268 356889 – 356889
preopening costs 4 1591 – 1591 1477 – 1477
380859 – 380859 358366 – 358366
gross profit 84845 – 84845 77 377 – 77 377
administration costs 26289 – 26289 24017 – 24017
trading profit 58556 – 58556 53360 – 53360
loss on disposal of fixed assets 5 – – – – 526 526
operating profitloss 58556 – 58556 53360 526 52834
interest payable 7 2788 596 2192 3517 1169 4686
interest receivable 7 114 – 114 186 – 186
profitloss on ordinary   
 activities before tax 55882 596 56478 50029 1695 48334
tax on profitloss from   
 ordinary activities 8 16186 167 16353 15559 4497 11062
profit for the year 39696 429 40125 34470 2802 37272
earnings per share pence
basic 9 1995 2016 1 748 1890
diluted 9 1990 2011 1 740 1882
dividend per share pence
1
10 900 800
1
   the dividend per share of 900p is the interim and proposed final dividend in respect of 2010 800p is the two interim dividends and the 
final dividend in respect of 2009
      
consolidated income statement 44 the restaurant group plc annual report 2010
53 weeks
ended 
2 january
2011
£’000
52 weeks
ended 
27 december
 2009
£’000
profit for the year 40125 37272
exchange differences on translation of foreign operations 5 140
total comprehensive income for the year 40120 37 132
consolidated statement of comprehensive income introduction business review governance financial statements
the restaurant group plc annual report 2010 45 
share
capital
£’000
share
premium
£’000
foreign
currency
translation
reserve
£’000
other
reserves
£’000
retained
earnings
£’000
total
£’000
balance at 28 december 2009 55568 21867 493 7104 45108 115932
profit for the year – – – – 40125 40125
exchange differences on translation   
 of foreign operations – – 5 – – 5
total comprehensive income for the year – – 5 – 40125 40120
issue of new shares 533 1367 – – – 1900
dividends – – – – 15706 15706
sharebased payments – credit to equity – – – 2235 – 2235
employee benefit trust – purchase of shares – – – 1433 – 1433
current tax on sharebased payments  
 taken directly to equity – – – – 525 525
deferred tax on sharebased payments  
 taken directly to equity – – – – 1140 1140
balance at 2 january 2011 56101 23234 488 6302 71192 144713
balance at 29 december 2008 55333 21104 633 5348 21884 93606
profit for the year – – – – 37272 37272
exchange differences on translation  
 of foreign operations – – 140 – – 140
total comprehensive income for the year – – 140 – 37272 37132
issue of new shares 235 763 – – – 998
dividends – – – – 14887 14887
sharebased payments – credit to equity – – – 2098 – 2098
employee benefit trust – purchase of shares – – – 3854 – 3854
current tax on sharebased payments  
 taken directly to equity – – – – 29 29
deferred tax on sharebased payments  
 taken directly to equity – – – – 810 810
balance at 27 december 2009 55568 21867 493 7104 45108 115932
consolidated statement of changes in equity 46 the restaurant group plc annual report 2010
note
at 
2 january 
2011
£’000
at 
27 december
 2009
£’000
noncurrent assets
intangible assets 11 26433 26241
property plant and equipment 12 259583 254841
286016 281082
current assets
stock 14 3630 4122
trade and other receivables 15 5573 5042
prepayments 13541 12951
cash and cash equivalents 2738 2831
25482 24946
total assets 311498 306028
current liabilities
corporation tax liabilities 8539 9298
trade and other payables 16 81945 80326
financial liabilities – derivative financial instruments 24 618 2242
other payables – finance lease obligations 25 296 276
provisions 17 602 928
92000 93070
net current liabilities 66518 68124
noncurrent liabilities
longterm borrowings 23 49662 69515
other payables – finance lease obligations 25 2772 2718
deferred tax liabilities 18 19091 21161
provisions 17 3260 3632
74785 97026
total liabilities 166785 190096
net assets 144713 115932
equity
share capital 19 56101 55568
share premium 23234 21867
foreign currency translation reserve 488 493
other reserves 20 21 6302 7 104
retained earnings 71192 45108
total equity 144713 115932
   
the financial statements of the restaurant group plc company registration number sc030343 on pages 39 to 68 were 
approved by the board of directors and authorised for issue on 9 march 2011 and were signed on its behalf by   
alan jackson   
stephen critoph aca
consolidated balance sheet introduction business review governance financial statements
the restaurant group plc annual report 2010 47 
note
53 weeks
 ended 
2 january
 2011
£’000
52 weeks
 ended 
27 december
 2009
£’000
operating activities
cash generated from operations 22 87821 77075
interest received 114 186
interest paid 3289 2377
tax paid 17518 13724
net cash flows from operating activities 67128 61160
investing activities
purchase of property plant and equipment 31982 31519
proceeds from sale of property plant and equipment – 463
net cash flows used in investing activities 31982 31056
financing activities
net proceeds from issue of ordinary share capital 1900 998
employee benefit trust – purchase of shares 20 1433 3854
net repayments of loan draw downs 20000 15000
dividends paid to shareholders 10 15706 14887
net cash flows used in financing activities 35239 32743
net decrease in cash and cash equivalents 93 2639
cash and cash equivalents at beginning of year 23 2831 5470
cash and cash equivalents at end of year 23 2738 2831
consolidated cash flow statement  48 the restaurant group plc annual report 2010
1 segmental analysis     
 53 weeks ended 2 january 2011
turnover
£’000
ebitda
£’000
ebitda
margin

operating
profit
£’000
operating
profit margin

leisure 373720 95067 254 72946 195
concessions 91984 18789 204 14234 155
principal trading brands 465704 113856 244 87180 187
noncore – 744 – 744 –
total all brands 465704 113112 243 86436 186
preopening costs 1591 03 1591 03
administration costs 23480 50 24054 52
sharebased payments 2235 05 2235 05
total before nontrading items 85806 184 58556 126
loss on disposal of fixed assets –
operating profit 58556
total net interest charges 2078
profit on ordinary activities before tax 56478
     
 52 weeks ended 27 december 2009
turnover
£’000
ebitda
£’000
ebitda
margin

operating
profit
£’000
operating
profit margin

leisure 353552 89525 253 69076 195
concessions 82184 15862 193 11040 134
principal trading brands 435736 105387 242 80116 184
noncore 7 787 – 1262 –
total all brands 435743 104600 240 78854 181
preopening costs 1477 03 1477 03
administration costs 21384 49 21919 50
sharebased payments 2098 05 2098 05
total before nontrading items 79641 183 53360 122
loss on disposal of fixed assets 526
operating profit 52834
total net interest charges 4500
profit on ordinary activities before tax 48334
ebitda is operating profit before depreciation amortisation and nontrading items
   
notes to the accounts introduction business review governance financial statements
the restaurant group plc annual report 2010 49 
 
 53 weeks ended 2 january 2011
depreciation
£’000
capital
additions
£’000
segment
assets
£’000
segment
liabilities
£’000
leisure 22121 26930 266977 50660
concessions 4555 4983 26601 13856
principal trading brands 26676 31913 293578 64516
noncore – – 925 6487
total all brands 26676 31913 294503 71003
administration 574 69 10304 7962
unallocated items – – 6691 87820
total group 27250 31982 311498 166785
 52 weeks ended 27 december 2009
depreciation
£’000
capital
additions
£’000
segment
assets
£’000
segment
liabilities
£’000
leisure 20449 25662 262585 49912
concessions 4822 5797 26084 12072
principal trading brands 25271 31459 288669 61984
noncore 475 – 954 8441
total all brands 25746 31459 289623 70425
administration 535 60 10181 8158
unallocated items – – 6224 111513
total group 26281 31519 306028 190096
assets and liabilities are allocated to divisions where possible unallocated assets include trade and other receivables  
certain prepayments and cash and cash equivalents unallocated liabilities include borrowings current and deferred tax 
derivative financial instruments and certain accruals and other creditors       
 
information reported to the group’s chief executive officer for the purposes of resource allocation and assessment of 
segment performance is focussed on two divisions the group’s reportable segments under ifrs 8 are therefore leisure  
and concessions  50 the restaurant group plc annual report 2010
2 additional nonstatutory information   
results are stated excluding nontrading items 
additional nonstatutory income statement information is provided as a useful guide to underlying trading performance  
the 2010 and 2009 results include a number of items which are of a oneoff nature or are unrelated to the year’s result  
and hence are not representative of the underlying trading performance of the business the following segmental analysis 
excludes these nontrading items as described in note 5 and is provided to aid understanding of the income statement  
and should be read in conjunction with rather than as a substitute for the reported information  
 53 weeks ended 2 january 2011
turnover
£’000
ebitda
£’000
ebitda
margin

operating
profit
£’000
operating
profit
margin

leisure 373720 95067 254 72946 195
concessions 91984 18789 204 14234 155
principal trading brands 465704 113856 244 87180 187
noncore – 744 – 744 –
total all brands 465704 113112 243 86436 186
preopening costs 1591 03 1591 03
administration costs 23480 50 24054 52
sharebased payments 2235 05 2235 05
ebitdaadjusted operating profit 85806 184 58556 126
total net interest charges 2674
adjusted profit before tax 55882
tax 16186
adjusted profit after tax 39696
earnings per share pence – trading business
basic 1995
diluted 1990
 52 weeks ended 27 december 2009
turnover
£’000
ebitda
£’000
ebitda
margin

operating
profit
£’000
operating
profit
margin

leisure 353552 89525 253 69076 195
concessions 82184 15862 193 11040 134
principal trading brands 435736 105387 242 80116 184
noncore 7 787 – 1262 –
total all brands 435743 104600 240 78854 181
preopening costs 1477 03 1477 03
administration costs 21384 49 21919 50
sharebased payments 2098 05 2098 05
ebitdaadjusted operating profit 79641 183 53360 122
total net interest charges 3331
adjusted profit before tax 50029
tax 15559
adjusted profit after tax 34470
earnings per share pence – trading business
basic 1748
diluted 1740
financial information regarding segmental assets and liabilities is detailed in note 1  
ebitda is operating profit before depreciation amortisation and nontrading items
notes to the accounts
 continued introduction business review governance financial statements
the restaurant group plc annual report 2010 51 
3 revenue   
2010
£’000
2009
£’000
income for the year consists of the following
revenue from continuing operations 465704 435743
other income not included within revenue in the income statement
rental income 3527 3493
interest income 114 186
total income for the year 469345 439422
 
4 profit for the year
2010
£’000
2009
£’000
cost of sales consists of the following
continuing business excluding preopening costs 379268 356889
preopening costs 1591 1477
total cost of sales for the year 380859 358366
    
2010
£’000
2009
£’000
profit for the year has been arrived at after chargingcrediting
depreciation 27250 26281
purchases 106690 101695
staff costs see note 6 145581 134353
rental income 3527 3493
minimum lease payments 47495 43272
contingent rents 7083 6833
total operating lease rentals of land and buildings 54578 50105
    
2010
£’000
2009
£’000
auditors’ remuneration
 fees payable to the company’s auditors for the audit of the company’s annual accounts 66 63
fees payable to the company’s auditors and  
 their associates for other services to the group
 the audit of the company’s subsidiaries pursuant to legislation 81 77
total audit fees 147 140
 tax services 102 54
 other services 40 39
total nonaudit fees 142 93
total auditors’ remuneration 289 233
    
audit fees included in the above total relating to the company are borne by a subsidiary undertaking all of the fees paid to 
auditors in 2010 and 2009 were expensed as administration costs    
    
     52 the restaurant group plc annual report 2010
5 nontrading items  
note
2010
£’000
2009
£’000
items classified as nontrading within ordinary activities
loss on disposal of fixed assets i 2 564
creation of accrual for disposal of assets i – 80
amounts receivable i – 113
other asset disposal included within operating profit i 2 5
loss on disposal of fixed assets – 526
finance creditcharge arising from remeasurement of interest rate swaps ii 596 1169
profitloss on ordinary activities before tax 596 1695
tax on nontrading items iii 167 4497
total nontrading items after tax 429 2802
    
i during 2009 the group disposed of fixed assets and realised a net loss of £05m    
    
ii  the group has taken a credit of £06m 2009 £12m charge in respect of the remeasurement of its interest rate swaps 
further details are provided in note 24    
    
iii  in the year ended 2 january 2011 the group has recognised a nontrading tax charge of £02m in the year ended  
27 december 2009 the group recognised a nontrading tax credit of £45m included within this amount is a credit  
of £36m in relation to the release of a number of provisions created in 2005 following agreement with hmrc on the 
treatment of a number of transactions    
    
6 staff costs and numbers   
2010 2009
a staff numbers including executive directors
restaurant staff 10257 9858
administration staff 223 212
10480 10070
    
2010
£’000
2009
£’000
b staff costs including directors comprise
wages and salaries 132900 122742
social security costs 9947 9028
sharebased payments 2235 2098
pension costs 499 485
145581 134353
    
c directors’ remuneration
emoluments 2536 2632
money purchase and other pension contributions 156 155
2692 2787
charge in respect of sharebased payments 1326 1237
4018 4024
    
further details of the directors’ emoluments and the executive pension schemes are given in the directors’ remuneration 
report on pages 29 to 35 of which the information on pages 32 to 35 has been audited    
notes to the accounts
 continued introduction business review governance financial statements
the restaurant group plc annual report 2010 53 
7 net finance charges   
2010
£’000
2009
£’000
bank interest payable 1978 2886
other interest payable 460 289
interest on obligations under finance leases 350 342
change in fair value of interest rate swaps 596 1169
total borrowing costs 2192 4686
bank interest receivable 2 6
other interest receivable 112 180
total interest receivable 114 186
net finance charges 2078 4500
8 tax    
2010
£’000
2009
£’000
a the tax charge comprises
current tax
uk corporation tax at 28 2009 28 17571 16058
adjustments in respect of previous years 288 756
17283 15302
deferred tax
origination and reversal of timing differences 291 1183
adjustments in respect of previous years 142 3057
credit in respect of rate change 781 –
930 4240
total tax charge for the year 16353 11062
    
b factors affecting the tax charge for the year    
the tax charge for the year varies from the standard uk corporation tax rate of 28 2009 28 due to the following factors 
2010
£’000
2009
£’000
profit on ordinary activities before tax 56478 48334
profit on ordinary activities before tax multiplied by the  
 standard uk corporation tax rate of 28 2009 28 15814 13534
effects of
depreciation on nonqualifying assets 1642 1546
expensesgain not deductible for tax purposes 110 293
loss on disposal of nonqualifying assets – 29
credit in respect of rate change on deferred tax liability 781 –
adjustment in respect of previous years 146 3813
utilisation of capital losses brought forward – 110
other adjustments 286 169
total tax charge for the year 16353 11062
    
the finance act 2010 reduced the rate of corporation tax from 28 to 27 from 1 april 2011 and this rate is required to be 
used in calculating deferred tax provisions at the balance sheet date this has resulted in a tax credit in the income statement 
of £08m    
    
the government has also indicated that it intends to enact future reductions in the main corporation tax rate of 1 each year 
reducing the main tax rate down to 24 by april 2014 the future 1 main tax rate reductions are expected to have a similar 
impact on the financial statements as the current year however the actual impact will be dependent on the deferred tax 
position at that time    
     54 the restaurant group plc annual report 2010
9 earnings per share   
2010 2009
a basic earnings per share
weighted average ordinary shares in issue during the year 199026844 19721 2437
total basic profit for the year £’000 40125 37272
basic earnings per share for the year pence 2016 1890
total basic profit for the year £’000 40125 37272
effect of nontrading items on earnings for the year £’000 429 2802
earnings excluding nontrading items £’000 39696 34470
adjusted earnings per share pence 1995 1 748
    
b diluted earnings per share    
weighted average ordinary shares in issue during the year 199026844 19721 2437
dilutive shares to be issued in respect of options granted under the share option schemes 495532 884472
199522376 198096909
diluted earnings per share pence 2011 1882
adjusted diluted earnings per share pence 1990 1 740
    
the additional nonstatutory earnings per share information where nontrading items described in note 5 have been  
added back has been provided as the directors believe they provide a useful indication as to the underlying performance  
of the group
diluted earnings per share information is based on adjusting the weighted average number of shares in issue in respect  
of notional share awards made to employees in respect of share option schemes no adjustment is made to the reported 
earnings for 2010 or 2009    
 
10 dividend    
2010
£’000
2009
£’000
amounts recognised as distributions to equity holders during the year
second interim dividend for the 52 weeks ended 27 december 2009 of 630p 
 2008 nil per share 12146 –
final dividend for the 52 weeks ended 27 december 2009 of 030p 2008 630p per share 580 12188
interim dividend for the 53 weeks ended 2 january 2011 of 154p 2009 140p per share 2980 2699
total dividends paid in the year 15706 14887
second interim dividend for the 53 weeks ended 2 january 2011 of nil 2009 630p per share – 12146
proposed final dividend for the 53 weeks ended 2 january 2011 of 746p  
 2009 actual proposed and paid 030p per share 14440 580
    
the proposed final dividend is subject to approval by shareholders at the annual general meeting to be held on 11 may 2011 
and is not recognised as a liability in these financial statements the proposed final dividend payable reflects the number of 
shares in issue on 2 january 2011 adjusted for the 59m shares owned by the employee benefit trust for which dividends 
have been waived further details are provided in note 20    
    
notes to the accounts
 continued introduction business review governance financial statements
the restaurant group plc annual report 2010 55 
11 intangible assets    
£’000
cost and carrying amount
at 29 december 2008 and at 27 and 28 december 2009 26241
additional consideration
1
192
at 2 january 2011 26433
1
  the additional consideration represents amounts paid to the previous shareholders of brunning and price limited as agreed under the 
terms of the purchase agreement being monies received on outstanding negotiations relating to the preacquisition period
    
goodwill arising on business combinations is not amortised but is subject to a biannual impairment review or more 
frequently if events or changes in circumstances indicate that it might be impaired therefore goodwill arising on acquisition  
is monitored and an impairment test is carried out which compares the value in use of each cash generating unit “cgu”  
to the carrying value the goodwill represents amounts arising on the acquisition of blubeckers limited and brunning  
and price limited which now trade as pub restaurants previously the goodwill arising on each acquisition was assessed 
individually but following the program of modifying the former blubeckers sites to bring them more in line with the  
brunning  price style of operation it is now considered appropriate to evaluate them in aggregate    
value in use calculations are based on cash flow forecasts derived from the most recent financial budgets and three year 
business plans approved by the board cash flows are then extrapolated in perpetuity with an annual growth rate of 2 
perpetuity is believed to be reasonable due to the significant proportion of freeholds in the estate and the nature of the 
leasehold properties the pretax discount rate applied to cash flow projections is 95 2009 1096 which is the rate 
believed by the directors to reflect the risks associated with the cgu    
    
since 1 january 1989 the cumulative amount of goodwill written off against realised reserves is £504m 2009 £504m 
records for periods prior to this date are not readily available 56 the restaurant group plc annual report 2010
12 property plant and equipment 
land and 
buildings
£’000
fixtures
equipment 
and vehicles
£’000
total
£’000
cost
at 29 december 2008 273831 99124 372955
exchange movement 215 86 301
additions 18510 13009 31519
disposals 3775 2410 6185
at 27 december 2009 288351 109637 397988
accumulated depreciation and impairment
at 29 december 2008 76389 45844 122233
exchange movement 153 56 209
provided during the year 13920 12361 26281
disposals 3017 2 141 5158
at 27 december 2009 87139 56008 143147
cost
at 28 december 2009 288351 109637 397988
exchange movement 42 17 59
additions 22097 9885 31982
disposals 3740 2460 6200
at 2 january 2011 306750 117079 423829
accumulated depreciation and impairment
at 28 december 2009 87 139 56008 143 147
exchange movement 34 13 47
provided during the year 13659 13591 27250
disposals 3740 2458 6198
at 2 january 2011 97092 67154 164246
net book value as at 27 december 2009 201212 53629 254841
net book value as at 2 january 2011 209658 49925 259583
2010
£’000
2009
£’000
net book value of land and buildings
freehold 58454 58353
long leasehold 2707 1656
short leasehold 148497 141203
209658 201212
     
2010
£’000
2009
£’000
assets held under finance leases 
cost at the beginning and end of the year 1961 1961
depreciation
at the beginning of the year 1099 1074
provided during the year 25 25
at the end of the year 1124 1099
net book value at the end of the year 837 862
      
      
      
notes to the accounts
 continued introduction business review governance financial statements
the restaurant group plc annual report 2010 57 
13 investment in associate       
the restaurant group plc holds a 38 investment in living ventures restaurants group limited and this investment  
is accounted for using the equity method living ventures restaurants group limited has an accounting year end date  
of 31 march and as there is no material benefit in making the accounting year end coterminus with the group no change  
has been made      
      
as a result of a detailed review of the trading performance of living ventures restaurants group limited the investment  
has been recorded at £nil and a loan note of £104m plus interest receivable due from lv finance limited a subsidiary  
of living ventures restaurants group limited was fully provided against as at 2 january 2011 and 27 december 2009  
    
the group’s share of the posttax result of living ventures restaurants group limited for the year ended 2 january 2011  
was a loss of £018m 2009 loss of £004m this loss has not been recognised in the income statement in accordance  
with ias 28 “associates and joint ventures” as the investment has a carrying value of £nil     
 
interest is receivable from lv finance limited on the loan note of £104m at a rate of libor in the 53 weeks ended  
2 january 2011 £01m of interest has accrued of which the group has recognised £nil 2009 £02m of which the group 
recognised £nil consequently in addition to the loan note of £104m outstanding at that date £12m of interest receivable 
had accrued of which under the terms of the agreement all was overdue      
      
summarised financial information on living ventures restaurants group limited is as follows     
2010
£’000
2009
£’000
noncurrent assets 10859 11944
current assets 2460 2263
noncurrent liabilities 17384 18143
current liabilities 5979 5647
equity 10044 9583
revenue 24232 23593
net loss 461 103
      
at 2 january 2011 living ventures restaurants group limited was contractually committed to £001m of capital expenditure 
27 december 2009 £002m      
      
14 stock      
stock comprises raw materials and consumables and have been valued at the lower of cost and estimated net realisable 
value the replacement cost at 2 january 2011 is not considered by the directors to be materially different from the balance 
sheet value the group recognised £1067m of purchases as an expense in 2010 2009 £1017m    
     
15 trade and other receivables      
2010
£’000
2009
£’000
amounts falling due within one year
trade debtors 1117 1154
other debtors 4456 3888
5573 5042
      
16 trade and other payables      
2010
£’000
2009
£’000
amounts falling due within one year
trade creditors 36613 33380
other tax and social security 12948 12347
other creditors 5487 7992
accruals 26897 26607
81945 80326
      
       58 the restaurant group plc annual report 2010
17 provisions    
2010
£’000
2009
£’000
provision for onerous lease contracts
balance at the beginning of the year 4560 4873
additional provisions made 177 1056
amounts utilised 899 961
provisions released 645 143
adjustment for change in discount rate 239 645
unwinding of discount 430 380
balance at the end of the year 3862 4560
analysed as
amount due for settlement within one year 602 928
amount due for settlement after one year 3260 3632
3862 4560
      
the provision for onerous contracts is in respect of lease agreements and covers the element of expenditure over the life  
of those contracts which are considered onerous expiring in 236 years      
      
18 deferred tax    
2010
£’000
2009
£’000
balance at the beginning of the year 21161 26211
depreciation in advance of capital allowances credited to the income statement 392 344
other timing differences 243 3896
credit in respect of rate change 781 –
deferred tax taken directly to the income statement see note 8 930 4240
tax on sharebased payments 1214 810
credit in respect of rate change 74 –
deferred tax taken through equity 1140 810
balance at the end of the year 19091 21161
      
2010
£’000
2009
£’000
deferred tax consists of
capital allowances in advance of depreciation 22564 23792
capital gains rolled over 523 543
other timing differences 3996 31 7 4
19091 21161
      
19 share capital      
number £’000
authorised
at 27 december 2009 and 2 january 2011 ordinary shares of 28
1
⁄8p each 284444444 80000
issued called up and fully paid
at 29 december 2008 196738838 55333
exercise of share options 837025 235
at 27 and 28 december 2009 197575863 55568
exercise of share options 1895029 533
at 2 january 2011 199470892 56101
notes to the accounts
 continued introduction business review governance financial statements
the restaurant group plc annual report 2010 59 
20 employee benefit trust      
an employee benefit trust “ebt” was established in 2007 in order to satisfy the exercise or vesting of existing and future 
share awards under the longterm incentive plan the ebt purchases shares in the market using funds provided by the 
company based on expectations of future requirements dividends are waived by the ebt at 2 january 2011 the trustees 
appleby trust jersey limited held 59m shares in the company 27 december 2009 58m shares    
net cash outflow in the year ended 2 january 2011 was £14m inclusive of costs year ended 27 december 2009 £39m 
inclusive of costs      
number £’000
at 29 december 2008 5100200
purchase of shares on 2 september 2009 at an average price of £1931 per share 1000000 1945
purchase of shares on 2 november 2009 at an average price of £1808 per share 268000 488
purchase of shares on 1 december 2009 at an average price of £1881 per share 750000 1421
2018000 3854
transfer of shares to satisfy the exercise of share awards 1326943
at 27 and 28 december 2009 5791257
purchase of shares on 27 april 2010 at an average price of £2372 per share 600000 1433
600000 1433
transfer of shares to satisfy the exercise of share awards 482383
at 2 january 2011 5908874
      
details of options granted under the group’s share schemes are given in note 21      
21 sharebased payment schemes      
the group operates a number of sharebased payment schemes details of which are provided in the directors’ remuneration 
report on pages 29 to 35 the group has taken advantage of the exemption under ifrs 2 “sharebased payments” not to 
account for share options granted before 7 november 2002        
the charge recorded in the financial statements of the group for the year ended 2 january 2011 in respect of sharebased 
payments is £22m 2009 £21m
        
the other reserve account in the balance sheet reflects the credit to equity made in respect of the charge for sharebased 
payments made through the income statement and the purchase of shares in the market in order to satisfy the vesting of 
existing and future share awards under the longterm incentive plan see note 20      
  
executive share option plans “esops”        
the group has in place three esops the 1998 scheme the 2003 scheme and a oneoff scheme under these schemes the 
remuneration committee may grant options over shares in the restaurant group plc to employees of the group awards 
under the esops are generally reserved for senior management level and above the contractual life of an option is ten years 
options granted under esops become exercisable on the third anniversary of the date of grant subject to growth in earnings 
per share exceeding rpi growth by more than 4 under the 1998 scheme or 25 under the 2003 scheme exercise of 
options is subject to continued employment within the group options were valued using a stochastic option pricing model 
no performance conditions were included in the fair value calculations 60 the restaurant group plc annual report 2010
21 sharebased payment schemes continued    
year ended 2 january 2011
period during which 
options are exercisable
exercise 
price
outstanding 
at beginning 
of year granted exercised lapsed
outstanding 
at end 
of year
exercisable 
at end 
of year
1998 scheme
2003 – 2010 486p 3015 – 3015 – – –
total number 3015 – 3015 – – –
weighted average exercise price 486p – 486p – – –
2003 scheme
2006 – 2013 674p 186887 – 179853 – 7034 7034 
2007 – 2014 97 7p 1074710 – 939355 – 135355 135355 
2008 – 2015 1344p 929679 – 568679 – 361000 361000 
total number 2191276 – 1687887 – 503389 503389 
weighted average exercise price 1107p – 1068p – 1236p 1236p
oneoff scheme see note below
2004 – 2011 450p 200000 – 200000 – – –
total number 200000 – 200000 – – –
weighted average exercise price 450p – 450p – – –
total number 2394291 – 1890902 – 503389 503389 
weighted average exercise price 1051p – 1002p – 1236p 1236p
      
year ended 27 december 2009
period during which 
options are exercisable
exercise
 price
outstanding
 at beginning
of year granted exercised lapsed
outstanding
 at end 
of year
exercisable
 at end 
of year
1998 scheme
2003 – 2010 486p 3015 – – – 3015 3015 
total number 3015 – – – 3015 3015 
weighted average exercise price 486p – – – 486p 486p
2003 scheme
2006 – 2013 674p 186887 – – – 186887 186887 
2007 – 2014 977p 1445710 – 371000 – 1074710 1074710 
2008 – 2015 1344p 1419000 – 429321 60000 929679 929679 
total number 3051597 – 800321 60000 2191276 2191276 
weighted average exercise price 1129p – 1174p 1344p 1107p 1107p
oneoff scheme see note below
2004 – 2011 450p 200000 – – – 200000 200000 
total number 200000 – – – 200000 200000 
weighted average exercise price 450p – – – 450p 450p
total number 3254612 – 800321 60000 2394291 2394291 
weighted average exercise price 1087p – 1174p 1344p 1051p 1051p
during 2010 the weighted average market price at date of exercise was 2246p per share 2009 1571p   
     
note the oneoff scheme is in respect of alan jackson’s share options granted on 5 june 2001 during the year alan jackson 
exercised 200000 options under this scheme and as at 2 january 2011 there are no share options outstanding  
no charge to the income statement is recognised in respect of alan jackson’s share options as they were granted prior 
to 7 november 2002        
notes to the accounts
 continued introduction business review governance financial statements
the restaurant group plc annual report 2010 61 
longterm incentive plan        
on 9 november 2005 an extraordinary general meeting of the restaurant group plc approved the adoption of a new 
longterm incentive plan “ltip” for the group details of which are provided in the directors’ remuneration report on pages 
29 to 36 awards under the ltip are generally reserved for senior management level and above 
conditional award share options and matching award share options are granted to directors and selected employees in 
respect of the matching award share options the respective director or employee is required to acquire a number of shares 
by a specified date known as “deposited shares” and retain these shares until the matching award share options vest for 
these matching award share options to be valid the table below summarises the dates of awards under the ltip and the 
dates by which directors and employees were required to acquire their deposited shares     
   
date of award date by which deposited shares must be acquired
7 december 2005 7 may 2006
8 march 2007 30 june 2007
6 march 2008 30 june 2008
5 march 2009 30 june 2009
4 march 2010 30 june 2010
vesting of share options under the ltip is dependent on continuing employment in exceptional circumstances employees 
may be permitted to exercise options before the normal period in which they are exercisable
on publication of the 2010 results the conditional and matching awards granted on 6 march 2008 become exercisable  
the vesting criteria for the total shareholder return “tsr” element of the conditional award were met in full and 
consequently 100 of this part of the award will vest earnings per share “eps” growth of the 2010 results compared  
with the 2007 results was between rpi 4 and rpi 10 and consequently 825 of the eps element of the conditional 
award and the matching award will vest
the options from the ltip scheme will be satisfied through share purchases via a trust further details are provided in note 20
year ended 2 january 2011
period during 
which options 
are exercisable type of award
fair 
value
outstanding
 at beginning
 of year granted exercised lapsed
outstanding
 at end 
of year
exercisable
 at end 
of year
2010 conditional – tsr element 2409p 150921 – 94295 56626 – –
2010 conditional – eps element 3360p 284176 – 268219 15957 – –
2010 matching 3360p 119869 – 119869 – – –
2011 conditional – tsr element 831p 626292 – – – 626292 –
2011 conditional – eps element 1460p 1369677 – – 93857 1275820 –
2011 matching 1460p 360107 – – 13689 346418 –
2012 conditional 899p 2593420 – – 265820 2327600 –
2012 matching 899p 492653 – – 9894 482759 –
2013 conditional – tsr element 1440p – 541699 – 9795 531904 –
2013 conditional – eps element 2089p – 541699 – 9794 531905 –
2013 matching 2089p – 486497 – 109951 376546 –
total number 5997115 1569895 482383 585383 6499244 – 62 the restaurant group plc annual report 2010
21 sharebased payment schemes continued         
year ended 27 december 2009
period during 
which options 
are exercisable type of award
fair
 value
outstanding
 at beginning
 of year granted exercised lapsed
outstanding
 at end 
of year
exercisable
 at end 
of year
2009 conditional – tsr element 990p 340135 – 340135 – – –
2009 conditional – eps element 1530p 625150 – 61 7980 7 1 70 – –
2009 matching 1530p 373385 – 368828 4557 – –
2010 conditional – tsr element 2409p 150921 – – – 150921 –
2010 conditional – eps element 3360p 293859 – – 9683 284176 –
2010 matching 3360p 158920 – – 39051 119869 –
2011 conditional – tsr element 831p 626292 – – – 626292 –
2011 conditional – eps element 1460p 1402535 – – 32858 1369677 –
2011 matching 1460p 360107 – – – 360107 –
2012 conditional 899p – 2611370 – 1 7950 2593420 –
2012 matching 899p – 757999 – 265346 492653 –
total number 4331304 3369369 1326943 376615 5997115 –
save as you earn scheme        
under the save as you earn “saye” scheme the board may grant options over shares in the restaurant group plc to 
ukbased employees of the group options are granted with a fixed exercise price equal to 80 of the average market price 
of the shares for the five days prior to invitation employees pay a fixed amount from their salary into a savings account each 
month for the threeyear savings period at the end of the savings period employees have six months in which to exercise 
their options using the funds saved if employees decide not to exercise their options they may withdraw their funds  
saved and the options expire exercise of options is subject to continued employment within the group in exceptional 
circumstances employees may be permitted to exercise these options before the end of the threeyear savings period 
options were valued using the stochastic share pricing model        
        
year ended 2 january 2011
period during 
which options 
are exercisable
exercise
 price
outstanding
 at beginning
 of year granted exercised lapsed
outstanding
 at end 
of year
exercisable
 at end 
of year
2011 1250p 602609 – 4127 50245 548237 –
2013 1840p – 357274 – 38163 319111 –
total number 602609 357274 4127 88408 867348 –
year ended 27 december 2009
        
period during 
which options 
are exercisable
exercise
 price
outstanding 
at beginning 
of year granted exercised lapsed
outstanding
 at end 
of year
exercisable
 at end 
of year
2009 1600p 130514 – 36704 93810 – –
2011 1250p 731321 – – 128712 602609 –
total number 861835 – 36704 222522 602609 –
during 2010 the weighted average market price at date of exercise was 2517p per share 2009 1874p   
     
notes to the accounts
 continued introduction business review governance financial statements
the restaurant group plc annual report 2010 63 
21 sharebased payment schemes continued         
assumptions used in valuation of sharebased payments granted in the year ended 2 january 2011
scheme 2010 ltip conditional award
2010 ltip
 matching
 award
2010 saye
 scheme
grant date
tsr element
04032010
eps element
04032010 04032010 19042010
share price at grant date 2089p 2089p 2089p 2351p
exercise price na na na 1840p
no of options originally granted 541699 541699 486497 357274 
minimum vesting period 3 years 3 years 3 years 3 years
expected volatility
1
507 na na 480
contractual life 35 years 35 years 35 years 35 years
risk free rate 30 30 30 19
expected dividend yield nil nil nil 28
expected forfeitures 10 10 30 15
fair value per option 1440p 2089p 2089p 887p
1
  expected volatility is the measure of the amount by which the share price is expected to fluctuate during a period in order to calculate 
volatility the movement in the return index share price plus dividends reinvested over a period prior to the grant date equal in length  
to the remaining period over which the performance condition applies has been calculated for the saye awards and for the discount  
for the tsr performance condition for the relevant conditional awards the calculated volatility based on the movement in the return index 
over a period of 325 years and 3 years respectively prior to the grant has been used
22 reconciliation of profit before tax to cash generated from operations
2010
£’000
2009
£’000
profit before tax 56478 48334
net finance charges 2078 4500
loss on disposal of fixed assets – 526
sharebased payments 2235 2098
depreciation 27250 26281
decreaseincrease in stocks 492 189
increasedecrease in debtors 1121 758
increasedecrease in creditors 409 5233
cash generated from operations 87821 77075
major noncash transactions
there were no major noncash transactions in the 53 weeks ended 2 january 2011 or the 52 weeks ended 27 december 2009 
     
23 reconciliation of changes in cash to the movement in net debt  
2010
£’000
2009
£’000
net debt
at the beginning of the year 66684 78884
movements in the year
repayments of loan draw downs 20000 15000
noncash movements in the year 147 161
cash outflow 93 2639
at the end of the year 46924 66684
      
       64 the restaurant group plc annual report 2010
23 reconciliation of changes in cash to the movement in net debt continued 
represented by
at 29
december
2008
£’000
cash flow 
movements
in the year
£’000
noncash
movements
in the year
£’000
at 27 and 28
december
2009
£’000
cash flow 
movements
in the year
£’000
noncash
movements
in the year
£’000
at 2
january
2011
£’000
cash and cash   
 equivalents 5470 2639 – 2831 93 – 2738
bank loans falling  
 due after one year 84354 15000 161 69515 20000 147 49662
78884 12361 161 66684 19907 147 46924
24 financial instruments and derivatives      
the group finances its operations through equity and borrowings the group borrows at floating rates and during 2010  
and 2009 used interest rate swaps to generate the desired interest profile the use of any financial instruments is carefully 
controlled and monitored by the board in line with the group’s treasury strategy and the terms and conditions of its facilities 
     
management’s approach to treasury is to      
ensure sufficient committed loan facilities are in place to support anticipated business requirements •	
ensure the group’s debt service will be supported by anticipated cash flows and that covenants will be complied with and •	
manage interest rate exposure with a combination of floating rate debt and interest rate swaps when appropriate  •	
    
further details on the business risk factors that are considered to affect the group and more specific financial risk 
management including sensitivity to increases in interest rates are included in the report of the directors on pages 18 to 25 
further details on market and economic risk is included in the chief executive officer’s review of operations on pages 6 to 11 
further detail on headroom against covenants is included in the group finance director’s report on pages 12 to 15   
    
a financial assets and liabilities    
financial assets   
the financial assets of the group comprise      
2010
£’000
2009
£’000
cash and cash equivalents – sterling 2470 2398
cash and cash equivalents – euro 268 433
2738 2831
trade and other receivables 5573 5042
total financial assets 8311 7873
      
cash and cash equivalents include balances held on account in respect of deposits paid by tenants under the terms of their 
rental agreement      
      
financial liabilities      
the financial liabilities of the group comprise      
2010
£’000
2009
£’000
trade and other payables excluding tax 68997 67979
derivative financial instruments 618 2242
finance lease debt 296 276
shortterm financial liabilities 69911 70497
longterm borrowings – at floating interest rates 49662 69515
finance lease debt 2772 2718
longterm financial liabilities 52434 72233
total financial liabilities 122345 142730
  total financial liabilities attracting interest were £500m 2009 £700m interest is payable at floating interest rates which fluctuate and are 
dependent on libor and base rate the average weighted year end interest rate for these borrowings was 130 2009 122 after 
taking into account the effect of the interest rate swaps the average weighted year end interest rate for these borrowings was 298 
2009 406
     
      
notes to the accounts
 continued introduction business review governance financial statements
the restaurant group plc annual report 2010 65 
24 financial instruments and derivatives continued     
on 19 december 2007 the group entered a 5 year facility agreement for £120m which was utilised from 17 january 2008 
interest is payable on the amount drawn down at libor plus mandatory cost and the bank’s margin which is dependent  
on the debt to ebitda ratio the group has a £10m overdraft facility which is repayable on demand on which interest  
is payable at the bank’s overdraft rate 
   
at 2 january 2011 the group has £700m of committed borrowing facilities in excess of gross borrowings  
27 december 2009 £500m and £100m of undrawn overdraft 27 december 2009 £100m of undrawn overdraft
the maturity profile of anticipated gross future cash flows including interest relating to the group’s nonderivative financial 
liabilities on an undiscounted basis are set out below      
      
at 2 january 2011  
trade and 
other
payables
excluding tax
£’000
floating
rate
loan
£’000
finance
lease
debt
£’000
total
£’000
within one year 68997 926 296 70219
within two to five years – 511 70 1184 52354
after five years – – 6016 6016
68997 52096 7496 128589
less future interest payments – 2434 4428 6862
68997 49662 3068 121727
      
at 27 december 2009  
trade and 
other
payables
excluding tax
£’000
floating
rate
loan
£’000
finance
lease
debt
£’000
total
£’000
within one year 67979 1146 276 69401
within two to five years – 74358 1103 75461
after five years – – 6299 6299
67979 75504 7678 151161
less future interest payments – 5989 4684 10673
67979 69515 2994 140488
      
effective from 16 january 2006 the group entered into an interest rate swap for an initial notional amount of £20m rising  
to £50m from 18 april 2006 until 16 january 2008 when it reduced to £30m until 16 january 2009 when it terminated  
the fixed rate for the duration of the three years was 4695      
      
effective from 18 january 2008 the group entered into an interest rate swap for a notional amount of £25m for three years 
the fixed rate for the duration of the three years was 492 on 8 february 2010 the interest rate swap was terminated on 
payment of £10m      
      
effective from 16 january 2009 the group entered into an interest rate swap for a notional amount of £20m for two years  
the fixed rate for the duration of the two years was 270      
      
effective from 16 january 2009 the group entered into an interest rate swap for a notional amount of £20m for three years 
the fixed rate for the duration of the three years was 2975 on 9 february 2011 the interest rate swap was terminated  
on payment of £04m      
       66 the restaurant group plc annual report 2010
24 financial instruments and derivatives continued     
fair value of financial assets and liabilities
at 2 january 2011 the group had derivative financial instruments relating to interest rate swaps and these have been valued  
in accordance with ias 39 the fair value measurement of these financial instruments is categorised as level 1 being derived 
from quoted prices in active markets for identical liabilities      
      
the fair value of these instruments was £06m and this is accounted for as a liability in the consolidated balance sheet  
2009 £22m liability the movement in fair value after taking into consideration the £10m cash paid on termination  
of one of the swaps has been recorded as a nontrading item in the consolidated income statement
all financial assets and liabilities excluding the interest rate swaps are accounted for at cost and the directors consider the 
carrying value to approximate their fair value 
b credit risk      
credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial losses to the 
group counterparties for cash and derivative balances are with large established financial institutions the group is exposed 
to credit related losses in the event of nonperformance by the financial institutions but does not expect them to fail to meet 
their obligations      
      
as a retail business with trading receipts settled either by cash or credit and debit cards there is very limited exposure from 
customer transactions the group is exposed to credit risk in respect of retrospective discounts receivable from suppliers but 
the directors believe adequate provision has been made in respect of doubtful debts  and there are no material amounts past 
due that have not been provided against      
      
the group has an outstanding longterm receivable of £104m plus interest due from lv finance limited a subsidiary of the 
group’s associate company living ventures restaurants group limited this debt is secured on the assets of living ventures 
restaurants limited but is subject to a prior ranking behind lv finance limited’s bank in 2007 following a detailed review of 
the carrying value of the business including the loan note receivable the board made full provision against the loan note due 
further details are provided in note 13       
      
the carrying amount of financial assets recorded in the financial statements net of any allowances for losses represent the 
group’s maximum exposure to credit risk      
c liquidity risk      
the group has built an appropriate mechanism to manage liquidity risk of the short medium and longterm funding and 
liquidity management requirements liquidity risk is managed through the maintenance of adequate cash reserves and bank 
facilities by monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities  
the group’s loan facilities which mature in 2012 as set out in note a above ensure continuity of funding provided the 
group continues to meet its covenant requirements as detailed in the report of the directors on pages 18 to 25   
   
d foreign currency risk      
as the group operates primarily within the united kingdom any transactional or translational exposure to changes in foreign 
exchange rate is limited the group operates three restaurants in spain that are serviced by local euro denominated  
debt the group is not materially exposed to changes in foreign currency rates and does not use foreign exchange  
forward contracts      
      
e interest rate risk      
exposure to interest rate movements has been controlled historically through the use of floating rate debt and interest  
rate swaps to achieve a balanced interest rate profile the group no longer has an interest rate swap following the early 
repayment of the swap scheduled to terminate in 2012 as the reduction in the level of debt throughout 2010 combined  
with current market conditions results in a low level of exposure the group’s exposure will continue to be monitored and  
the use of interest rate swaps may be considered in the future      
      
notes to the accounts
 continued introduction business review governance financial statements
the restaurant group plc annual report 2010 67 
25 lease commitments      
future lease payments in respect of finance leases are due as follows      
      
 minimum 
 lease payments
 present value of minimum
 lease payments
2010
£’000
2009
£’000
2010
£’000
2009
£’000
within one year 296 276 296 276
within two to five years 1184 1103 907 845
after five years 6016 6299 1865 1873
7496 7678
less future interest payments 4428 4684
present value of lease obligations 3068 2994 3068 2994
analysed as
amount due for settlement within one year 296 276
amount due for settlement after one year 2772 2718
present value of lease obligations 3068 2994
      
lease commitments are in respect of property leases where the initial term of the lease is in excess of 25 years and the 
conditions of the lease are in keeping with a finance lease there are no finance leases where the group itself is the lessor 
the interest rate applied in calculating the present value of the payments is the incremental borrowing cost of the group  
in relation to each lease the fair value of the lease payments is estimated as £31m 2009 £30m
the total future minimum rentals payable and receivable under operating leases over the remaining lives of the leases are 
payments due
payable
2010
£’000
receivable
2010
£’000
payable
2009
£’000
receivable
2009
£’000
within one year 47719 3399 44904 3229
within two to five years 170417 11124 166751 11287
after five years 372325 28682 348197 30062
590461 43205 559852 44578
      
the group has entered into a number of property leases on standard commercial terms both as lessee and lessor  
there are no restrictions imposed by the group’s operating lease arrangements either in the current or prior year 
included within the minimum rentals are amounts payable on properties where the rental payment is based on turnover  
for these properties primarily in the group’s concession division the amount included above is the minimum guaranteed 
rent as detailed in the concession agreement where there is no minimum guaranteed rent the amount included is based  
on the estimated amount payable      
      
26 capital commitments      
2010
£’000
2009
£’000
authorised and contracted for 13251 9043
       68 the restaurant group plc annual report 2010
27 contingent liabilities      
the group has assigned a number of leases to third parties that were originally completed prior to 1 january 1996 and 
therefore unaffected by the landlord and tenant covenants act 1995 and also a number of leases completed after this date 
that were the subject of an authorised guarantee agreement consequently should  the current tenant default the landlord 
has a right of recourse to the restaurant group plc or its subsidiaries for future rental payments as and when any liability 
arises the group will take whatever steps necessary to mitigate the costs      
      
28 related party transactions      
living ventures restaurants group limited is a related party to the restaurant group plc through the group’s 38 holding 
a loan note of £104m is due from lv finance a subsidiary of living ventures restaurants group limited which attracts 
interest at the rate of libor during the year ended 2 january 2011 £01m of interest was accrued of which the group 
recognised £nil 2009 £02m of which the group recognised £nil consequently in addition to the £104m loan note 
outstanding at 2 january 2011 £12m interest had accrued of which all was overdue under the terms of the agreement 
further details are provided in note 13   
   
alan jackson is a nonexecutive director of charles wells limited an independent brewing pub and distribution company 
during 2005 the restaurant group plc entered into a lease for a site owned by charles wells limited and subsequently  
this site was converted into a frankie  benny’s restaurant no premium was paid by the group to charles wells limited  
the group has entered into the lease with charles wells limited on an arm’s length basis with an annual rent of £73850  
per annum in addition the group purchased products with a value totalling £07m 2009 £09m from charles wells limited 
during the year on an arm’s length basis no balance was directly outstanding at the year end alan jackson received no 
remuneration or compensation in respect of these transactions   
   
remuneration in respect of key management personnel defined as the directors for this purpose is disclosed in note 6 
further information concerning the directors’ remuneration is provided in the directors’ remuneration report on pages 29 to 35 
of which pages 32 to 35 are audited   
   
notes to the accounts
 continued introduction business review governance financial statements
the restaurant group plc annual report 2010 69 
we have audited the parent company financial statements  
of the restaurant group plc for the 53 week period ended  
2 january 2011 which comprise the company balance  
sheet and the related notes i to v the financial reporting 
framework that has been applied in their preparation is 
applicable law and united kingdom accounting standards 
united kingdom generally accepted accounting practice
this report is made solely to the company’s members  
as a body in accordance with chapter 3 of part 16 of the 
companies act 2006 our audit work has been undertaken 
so that we might state to the company’s members those 
matters we are required to state to them in an auditor’s report 
and for no other purpose to the fullest extent permitted by 
law we do not accept or assume responsibility to anyone 
other than the company and the company’s members as  
a body for our audit work for this report or for the opinions 
we have formed
respective responsibilities of directors and auditor
as explained more fully in the directors’ responsibilities 
statement the directors are responsible for the preparation  
of the parent company financial statements and for being 
satisfied that they give a true and fair view our responsibility 
is to audit and express an opinion on the parent company 
financial statements in accordance with applicable law and 
international standards on auditing uk and ireland those 
standards require us to comply with the auditing practices 
board’s ethical standards for auditors
scope of the audit of the financial statements
an audit involves obtaining evidence about the amounts  
and disclosures in the financial statements sufficient to give 
reasonable assurance that the financial statements are free 
from material misstatement whether caused by fraud or error 
this includes an assessment of whether the accounting 
policies are appropriate to the parent company’s 
circumstances and have been consistently applied and 
adequately disclosed the reasonableness of significant 
accounting estimates made by the directors and the  
overall presentation of the financial statements
opinion on financial statements
in our opinion the parent company financial statements
 give a true and fair view of the state of the company’s •	
affairs as at 2 january 2011
 have been properly prepared in accordance with united •	
kingdom generally accepted accounting practice and
 have been prepared in accordance with the requirements •	
of the companies act 2006
independent auditors’ report 
to the members of the restaurant group plc
opinion on other matters prescribed by the 
companies act 2006
in our opinion
 the part of the directors’ remuneration report to be  •	
audited has been properly prepared in accordance  
with the companies act 2006 and
 the information given in the report of the directors for  •	
the financial year for which the financial statements are 
prepared is consistent with the parent company  
financial statements
matters on which we are required to report  
by exception
we have nothing to report in respect of the following matters 
where the companies act 2006 requires us to report to you 
if in our opinion
 adequate accounting records have not been kept by the •	
parent company or returns adequate for our audit have 
not been received from branches not visited by us or
 the parent company financial statements and the part of •	
the directors’ remuneration report to be audited are not  
in agreement with the accounting records and returns or
 certain disclosures of directors’ remuneration specified  •	
by law are not made or
 we have not received all the information and explanations •	
we require for our audit
other matter
we have reported separately on the group financial 
statements of the restaurant group plc for the 53 week 
period ended 2 january 2011 
timothy steel senior statutory auditor
for and on behalf of deloitte llp
chartered accountants and statutory auditor
london united kingdom
9 march 2011 70 the restaurant group plc annual report 2010
company financial statements – under uk gaap
company balance sheet
note
at 
2 january 
2011
£’000
at 
27 december
2009
£’000
fixed assets
investments in subsidiary undertakings i 129117 126882
129117 126882
current assets
debtors
amounts falling due within one year from group undertakings 150636 102001
150636 102001
creditors
amounts falling due within one year to group undertakings ii 136792 121553
net current liabilities 13844 19552
total assets less current liabilities 142961 107330
net assets 142961 107330
capital and reserves
called up share capital v 56101 55568
share premium account v 23234 21867
other reserves v 6302 7 104
profit and loss account v 69928 36999
shareholders’ funds 142961 107330
     
the financial statements of the restaurant group plc company registration number sc030343 on pages 70 to 71 were 
approved by the board of directors and authorised for issue on 9 march 2011 and were signed on its behalf by   
  
alan jackson     
stephen critoph aca     
     
accounting policies and basis of preparation     
     
basis of accounting     
the accounts for the company have been prepared under uk generally accepted accounting practice whilst the group 
accounts have been prepared under international financial reporting standards the company accounts have been 
prepared under the historical cost convention in accordance with applicable uk accounting standards and on a going 
concern basis     
     
investments     
investments are valued at cost less any provision for impairment     
     
dividends     
in accordance with frs 21 “events after the balance sheet date” dividends declared after the balance sheet date are not 
recognised as a liability at that balance sheet date and are recognised in the financial statements when they have received 
approval by shareholders     
     
sharebased payment transactions     
the share options have been accounted for as an expense in the company in which the employees are employed using  
a valuation based on the stochastic simulation model     
      
in accordance with an available election in frs 20 sharebased payment awards granted before 7 november 2002 have  
not been subject to a charge an increase in the investment held by the company in the subsidiary in which the employees 
are employed with a corresponding increase in equity is recognised in the accounts of the company information in respect 
of the company’s sharebased payment schemes is provided in note 21 to the consolidated financial statements  
    
the value is accounted for as a capital contribution in the relevant group subsidiary that employs the staff members to whom 
awards of share options have been made      
       introduction business review governance financial statements
the restaurant group plc annual report 2010 71 
i investment in subsidiary undertakings     
shares
£’000
loans
and other
£’000
total
£’000
cost
at 28 december 2009 90587 3771 7 128304
additions – share option scheme – 2235 2235
at 2 january 2011 90587 39952 130539
amounts written off
at 28 december 2009 and 2 january 2011 888 534 1422
net book value at 2 january 2011 89699 39418 129117
net book value at 27 december 2009 89699 37 183 126882
      
the company’s operating subsidiaries listed below are held by an intermediate holding company trg holdings limited 
     
holding
proportion of voting 
rights and shares held
at 2 january 2011
city centre restaurants uk limited ordinary shares 100
chiquito limited ordinary shares 100
blubeckers limited ordinary shares 100
brunning and price limited ordinary shares 100
frankie  benny’s sl ordinary shares 100
dpp restaurants limited ordinary shares 100
      
other than frankie  benny’s sl the company’s principal operating subsidiaries are registered in england and wales and 
operate restaurants in the united kingdom frankie and benny’s sl is registered and operates three restaurants in spain
all other subsidiary undertakings are wholly owned by the company or one of its subsidiaries and are dormant   
   
ii creditors – amounts falling due within one year      
in accordance with frs 21 the proposed final dividend in respect of 2010 is not recorded as a liability in these financial 
statements as it was declared after the balance sheet date and is subject to approval by shareholders   
iii profit attributable to members of the holding company      
as permitted by section 408 of the companies act 2006 a separate profit and loss account has not been presented  
for the holding company during the year the company recorded a profit of £486m representing paid and accrued internal 
preference dividend income 2009 £nil of which £179m related to the year ended 27 december 2009 remuneration  
of the auditors is borne by a subsidiary undertaking refer to note 4 in the consolidated accounts    
  
iv employee costs and numbers      
all costs of employees and directors are borne by a subsidiary undertaking at 2 january 2011 the company employed  
three persons 27 december 2009 three persons      
      
v share capital and reserves      
share 
capital
£’000
share 
premium
£’000
other 
reserves
£’000
profit and 
loss account
£’000
total
£’000
at 28 december 2009 55568 21867 7104 36999 107330
issue of shares 533 1367 – – 1900
employee share option schemes – – 2235 – 2235
employee benefit trust – purchase of shares – – 1433 – 1433
profit for the year – – – 48635 48635
dividends – – – 15706 15706
at 2 january 2011 56101 23234 6302 69928 142961
      
details of share issues during the year are given in note 21 of the consolidated accounts and details of the dividends paid  
and proposed during the year are given in note 10 of the consolidated accounts      72 the restaurant group plc annual report 2010
group financial record
2010
£’000
2009
£’000
2008
£’000
2007
£’000
2006
£’000
revenue 465704 435743 416530 366710 314748
adjusted operating profit 58556 53360 54231 48207 39187
underlying interest 2674 3331 5306 3978 3254
share of posttax result in associated undertaking – – – 749 917
adjusted profit before tax 55882 50029 48925 43480 35016
nontrading creditscharges 596 1695 1794 660 13437
profit on ordinary activities before tax 56478 48334 47 131 42820 21579
tax 16353 11062 14914 13644 11 163
profit on ordinary activities after tax 40125 37272 32217 291 76 10416
profit on sale of businesses net of tax – – – – 3950
profit for the year 40125 37272 32217 291 76 14366
basic earnings per share 2016p 1890p 1638p 1490p 726p
adjusted earnings per share 1995p 1 748p 1667p 1464p 1150p
proposed total dividend per share for the year 900p 800p 770p 725p 600p
dividend cover excluding nontrading items 222 219 216 202 192
employment of finance
property plant and equipment 259583 254841 250722 228757 1 74035
other noncurrent assets 26433 26241 26241 26516 19960
net current liabilities 66518 68124 66092 67524 59612
longterm liabilities 55694 75865 91054 85207 52932
163804 137093 11981 7 102542 81451
financed by
equity shareholders’ funds 144713 115932 93606 77 154 65204
deferred tax 19091 21161 26211 25388 16247
163804 137093 11981 7 102542 81451
net debt 46924 66684 78884 76573 47482
gearing 324 575 843 992 728
interest cover before nontrading items times 219 160 102 121 120  the restaurant group plc operates 389 
restaurants and pub restaurants its principal 
trading brands are frankie  benny’s chiquito 
and garfunkel’s and it also operates a pub 
restaurant business as well a concessions 
division which trades on over 50 sites  
principally at uk airports
introduction 
financial highlights 01 
at a glance 02
business review 
chairman’s statement 04 
chief executive officer’s review of operations 06 
group finance director’s report 12 
governance 
board of directors 16 
report of the directors 18
corporate responsibility 26 
directors’ remuneration report 29 
audit committee report 36 
financial statements 
independent auditors’ report 38 
accounting policies for the consolidated accounts 39 
consolidated income statement 43 
consolidated statement of comprehensive income 44 
consolidated statement of changes in equity 45 
consolidated balance sheet 46 
consolidated cash flow statement 47 
notes to the accounts 48
independent auditors’ report – company accounts 69 
company financial statements – under uk gaap 70 
group financial record 72
shareholder information 73 
contents
the restaurant group plc annual report 2010 73 
directors
alan jackson
nonexecutive chairman
andrew page
chief executive officer
stephen critoph
group finance director
trish corzine
executive director concessions
tony hughes
nonexecutive
simon cloke
nonexecutive
company secretary
robert morgan
registered office
until 14 march 2011
151 st vincent street
glasgow g2 5nj 
from 14 march 2011
1 george street
glasgow g2 1al 
head office
57 marshalsea road
london se1 1ep
telephone number
020 3117 5001
company number
sc030343
shareholder information
registrar
equiniti limited
aspect house
spencer road
lancing 
west sussex bn99 6da
auditors
deloitte llp
hill house
1 little new street
london ec4a 3tr
solicitors
maclay murray  spens llp
one london wall
london ec2y 5ab
slaughter and may
one bunhill row
london ec1y 8yy
brokers
jpmorgan cazenove
20 moorgate
london ec2r 6da
panmure gordon
moorgate hall
155 moorgate
london ec2m 6xb
financial calendar
annual general meeting – 11 may 2011
proposed final dividend – 2010
announcement – 9 march 2011
exdividend – 18 may 2011
record date – 20 may 2011
payment date – 17 june 2011 the restaurant group plc
57 marshalsea road
london se1 1ep
tel 020 3117 5001
wwwtrgplccom
the restaurant group plc  annual report 2010
strong brands 
focused strategy
annual report 2010
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volatile organic compounds are derived from renewable sources and less 
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the printer is iso 14001 accredited and forest stewardship council fsc chain  
of custody certified under the framework of iso 14001 a structured approach is 
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Summary:
 06 the restaurant group plc annual report 2010
introduction
2 0 1 0 	 t u r n e d 	 o u t 	 t o 	 b e 	 a n o t h e r 	 c ha l l e n g i n g 	 y e a r 	 f or 	 t h e	
r e s t a u r a n t 	 g r o u p  	 p a r t l y 	 du e 	 t o 	 f a ct or s 	 t ha t 	 w e 	 ha d	
a n t i c i p a t e d 	 a n d 	 p a r t l y 	 a s 	 a 	 r e s ult 	 o f 	 s om e 	 t ha t 	 w e 	 ha d 	 n o t 	
a lt h o u g h 	 t h e 	 u k 	 e c o n omi c 	 r e c o v e r y 	 g a i n e d 	 mom e n t u m	
du r i n g 	 t h e 	 y e a r  	 t h e 	 b a c k dr op 	 f or 	 dom e s t i c 	 c o n s u m e r  f a c i n g	
b u s i n e s s e s 	 r e m a i n e d 	 d i f fi c ult  	 a s 	 a n t i c i p a t e d  	 c o n s u m e r	
c o n fi d e n c e 	 w a s 	 f r a g i l e 	 a s 	 a 	 r e s ul t 	 o f 	 a 	 n u m b e r 	 o f 	 f a ct or s	
i n c l ud i n g 	 t h e 	 s h o c k 	 f r om 	 t h e 	 r e c e s s i o n  	 o n go i n g 	 t i g h t e r	 
c r e d it 	 c o n d it i o n s  	 l e v e l s 	 o f 	 u n e m pl o y m e n t 	  a n d 	 t h e 	 f e a r 	 o f	
u n e m plo y m e n t   	 i n fla t i o n  	 hi g h e r 	 t a x e s 	 a n d 	 n e g a t i v e 	 r e a l	
e a r ni n gs 	 gr o w t h  	 2 0 1 0 	 a l s o 	 t hr e w 	 u p 	 t w o 	 u n e x p e c t e d	
c ha l l e n g e s 	 – 	 t h e 	 e y j a f j a l la j ök ul l 	 v o l c a n o 	 a s h 	 c l o ud 	 i n 	 a pr i l	 
and one of the worst winters on record at the end of the  
y e a r  	 b o t h 	 o f 	 t h e s e 	 u n u s u a l 	 m e t e or o l o g i c a l 	 e v e n t s 	 c a u s e d	
s i g nifi c a n t 	 d i s r u p t i o n 	 t o 	 o u r 	 b u s i n e s s 	 a n d  	 a lt h o u g h 	 w e 	 w e r e	
a bl e 	 t o 	 t a k e 	 s om e 	 mit i g a t i n g 	 a ct i o n s  	 a d v e r s e l y 	 i m p a ct e d	
s a l e s 	 a n d 	 pr o fi t s 	
n o t w it h s t a n d i n g 	 t h o s e 	 c ha l l e n g e s  	 t h e 	 g r o u p 	 c o n t i n u e d 	 t o	
m a k e 	 f u r t h e r 	 go od 	 pr o gr e s s 	 i n c r e a s i n g 	 s a l e s  	 pr o fi t s 	 a n d	
c a s h 	 fl o w  	 b o t h 	 o f 	 o u r 	 d i v i s i o n s 	 p e r f or m e d 	 w e l l  	 w it h 	 o u r	
l e i s u r e 	 d i v i s i o n 	 d e l i v e r i n g 	 a 	 s o l i d 	 i n c r e a s e 	 i n 	 pr o fi t s 	 a n d 	 o u r	
c o n c e s s i o n s 	 d i v i s i o n 	 d e l i v e r i n g 	 a 	 s i g nifi c a n t 	 pr o fi t 	 i n c r e a s e 	
m a r g i n s 	 a l s o 	 h e l d 	 u p 	 w e l l 	 w it h 	 bo t h 	 e bi t d a 	 a n d 	 op e r a t i n g	
m a r g i n s 	 i m pr o v i n g 	 o n 	 t h e 	 pr e v i o u s 	 y e a r  	 t o t a l 	 s a l e s 	 w e r e 	 7 	
a h e a d 	 o f 	 t h e 	 pr e v i o u s 	 y e a r 	  l i k e  f or  l i k e 	 s a l e s 	 w e r e 	 1  	 b e l o w 	
and 	 adjust ed 	 e ar nings 	 pe r 	 shar e 	 incr e ased 	 b y 	 1 4   	 a gainst 	 
a 	 c ha l l e n g i n g 	 b a c k dr op 	 t hi s 	 r e pr e s e n t s 	 a n 	 i m pr e s s i v e	
p e r f or m a n c e 	 a n d 	 bod e s 	 w e l l 	 f or 	 t h e 	 f u t u r e 	
the trg business model and rationale
o u r 	 c or e 	 ob je ct i v e 	 c o n t i n u e s 	 t o 	 b e 	 gr o w t h 	 i n 	 s ha r e h o l d e r	
v alue 	 and 	 our 	 stra t e g y 	 t o 	 achie v e 	 this 	 is 	 t o 	 build 	 a 	 busine s s	
c a p a bl e 	 o f 	 d e l i v e r i n g 	 l o n g  t e r m  	 s u s t a i na bl e 	 a n d 	 gr o w i n g	
c a s h 	 fl o w s  	 t h e 	 g r o u p 	 ha s 	 a 	 c o n s i s t e n t 	 r e c or d 	 o f 	 c o n v e r t i n g	
pr o fi t s 	 i n t o 	 c a s h 	 a t 	 a 	 v e r y 	 h e a lt h y 	 r a t e  	 a n d 	 d e l i v e r i n g	
i n c r e a s i n g 	 c a s h 	 fl o w s 	 e a c h 	 y e a r  	 a n d 	 i n 	 2 0 1 0 	 t hi s 	 w a s 	 a g a i n	
t h e 	 c a s e  	 t r g ’ s 	 b u s i n e s s 	 mod e l 	 e na bl e s 	 t h e 	 g r o u p 	 t o 	 gr o w	
i n 	 a 	 pr e domi na n t l y 	 or g a ni c 	 a n d 	 hi g hl y 	 v a l u e – a c c r e t i v e 	 w a y 	
f u n d e d 	 f r om 	 it s 	 i n t e r na l l y 	 g e n e r a t e d 	 f u n ds 	
o u r 	 t o u c h s t o n e s 	 a r e 	 c a s h 	 fl o w 	 a n d 	 r e t u r n 	 o n 	 i n v e s t m e n t 	 
t hi s 	 mod e l 	 e na bl e s 	 o u r 	 s ha r e h o l d e r s 	 t o 	 e n j o y 	 t h e 	 b e n e fi t s	 
o f 	 hi g h 	 r e t u r n s 	 o n 	 c a pit a l  	 gr o w t h 	 i n 	 pr o fi t s 	 a n d 	 c a s h 	 fl o w	 
a n d 	 s i z e a bl e 	 i n c om e 	 d i s t r i b u t i o n s 	 f r om 	 o u r 	 pr o gr e s s i v e	
d i v i d e n d 	 po l i c y 	
“ 	 o u r 	 c o r e 	 o b j e c t i v e 	 c o n t i n u e s 	 t o	 
b e 	 g r o w t h 	 i n 	 s h a r e h o l d e r 	 v a l u e	 
a n d 	 o u r 	 s t r a t e g y 	 t o 	 a c h i e v e 	 t h i s	 
i s 	 t o 	 b u i l d 	 a 	 b u s i n e s s 	 c a p a b l e 	 o f	
d e l i v e r i n g 	 l o n g  t e r m  	 s u s t a i n a b l e	 
a n d 	 g r o wi n g 	 c a s h fl o w s  ”
chief executive officer’s 
review of operations introduction business review governance financial statements
the restaurant group plc annual report 2010 07 
o u r 	 k e y 	 c r it e r ia 	 i n 	 d e t e r mi n i n g 	 w h e r e 	 t o 	 i n v e s t 	 o u r 	 c a pit a l 	 i s	 
t o 	 op e r a t e 	 r e s t a u r a n t s 	 i n 	 l o c a t i o n s 	 w it h 	 hi g h 	 b a r r i e r s 	 t o 	 e n t r y 	
go od 	 gr o w t h 	 pr o s p e c t s 	 a n d 	 w h e r e 	 w e 	 a r e 	 c o n fi d e n t 	 t ha t 	 w e	
c a n 	 s e c u r e 	 hi g h 	 r e t u r n s 	 o n 	 i n v e s t m e n t  	 o u r 	 f o c u s 	 i s 	 o n 	 e dg e	
of town out of town rural semirural and airport locations 
and 	 w e 	 occup y 	 le a ding 	 mark e t 	 posit ions 	 in 	 the se 	 se gme n ts  	
t h e 	 f o o t pr i n t 	 t ha t 	 t h e 	 g r o u p 	 o c c u pi e s 	 i n 	 e dg e 	 a n d 	 o u t 	 o f	
town leisure and airport locations is comprehensive and from 
a 	 m a r k e t 	 po s it i o ni n g 	 p e r s p e ct i v e  	 v e r y 	 f or mi d a bl e  	 i t 	 w o ul d	 
b e 	 v i r t u a l l y 	 i m po s s i bl e 	 t o 	 r e pl i c a t e 	 t hi s 	 f o o t pr i n t 	 f r om 	 s c r a t c h	
and the group is well placed to continue to roll out more  
new restaurants 
capital expenditure and trg opening programme
o u r 	 phi l o s oph y 	 r e g a r d i n g 	 c a pit a l 	 e x p e n d i t u r e 	 r e m a i n s	
c o n s i s t e n t 	 – 	 w e 	 f o c u s 	 o n 	 c a s h 	 g e n e r a t i o n 	 a n d 	 o n 	 s e c u r i n g	 
a 	 r e tur n 	 on 	 in v e st ed 	 capital 	 a t 	 ra t e s 	 ahe a d 	 o f 	 tr g ’ s 	 w e igh t ed	
a v e r a g e 	 c o s t 	 o f 	 c a pit a l  	 w e 	 ha v e 	 c o n t i n u e d 	 t o 	 a ppl y 	 t h e	 
s a m e 	 l e v e l s 	 o f 	 a na l y t i c a l 	 r i go u r  	 c om m e r c ia l 	 a na l y s i s 	
e x p e r i e n c e 	 a n d 	 r i s k 	 a d j u s t m e n t 	 t o 	 e a c h 	 c a pit a l 	 pr o je ct	 
that we undertake this approach has served trg well  
and we do not intend to deviate from it 
o u r 	 f r e e 	 c a s h 	 fl o w 	 g e n e r a t i o n 	 i s 	 s u f fi c i e n t 	 t o 	 e na bl e 	 t h e	
g r oup 	 t o 	 fund 	 35 	 t o 	 45 	 ne w 	 r e stauran ts 	 per 	 annum	 
whilst 	 main taining 	 main t e nance 	 capital 	 e xpe nditur e 	 a t 	 the 	
a ppr opr ia t e 	 l e v e l 	 a n d 	 p u r s ui n g 	 a 	 pr o gr e s s i v e 	 d i v i d e n d 	 po l i c y 	
ho w e v e r  	 t h e 	 l e v e l 	 o f 	 n e w 	 d e v e l opm e n t 	 a ct i v it y 	  p a r t i c ula r l y	
e dg e 	 a n d 	 o u t 	 o f 	 t o w n 	 d e v e l opm e n t s  	 w it hi n 	 o u r 	 s e ct or 	 i s	 
s t i l l 	 w e l l 	 b e l o w 	 t h e 	 l e v e l s 	 w e 	 s a w 	 pr i or 	 t o 	 t h e 	 o n s e t 	 o f 	 t h e	
r e c e s s i o n  	 a t 	 t hi s 	 s t a g e 	 o f 	 t h e 	 e c o n omi c 	 c y c l e 	 t hi s 	 i s 	 n o t	
u n u s u a l 	 a n d 	 w hi l s t 	 t h e r e 	 ha s 	 b e e n 	 a 	 pi c k 	 u p 	 i n 	 n e w	
d e v e l opm e n t 	 a ct i v it y 	 i n 	 s om e 	 s e ct or s  	 t hi s 	 ha s 	 n o t 	 y e t	
g a t h e r e d 	 p a c e 	 w it hi n 	 o u r 	 s e ct or  	 ho w e v e r  	 t h e r e 	 i s 	 a	
s i g nifi c a n t 	 n u m b e r 	 o f 	 s c h e m e s 	 t ha t 	 d e v e l op e r s 	 ha v e 	 i n 	 t h e	
“ pi p e l i n e ” 	 a n d 	 w e 	 a r e 	 c o n fi d e n t 	 t ha t  	 a t 	 s om e 	 po i n t  	 t h e s e 	 w i l l	
be 	 act iv a t ed  	 t he 	 ca taly sts 	 f or 	 this 	 ar e 	 lik ely 	 t o 	 be 	 e vide nce 	 o f	
t h e 	 c o n s u m e r 	 m a r k e t pla c e 	 r e t u r ni n g 	 t o 	 s t e a d y 	 gr o w t h 	 a n d	
a ppr opr ia t e 	 f u n d i n g 	 b e i n g 	 a v a i la bl e  	 a t 	 t hi s 	 s t a g e 	 it 	 i s 	 d i f fi c ult	
t o 	 pr edict 	 whe n 	 this 	 migh t 	 be 	 but  	 if 	 the 	 pa t t er n 	 o f 	 pr e vious	
e c o n omi c 	 r e c o v e r i e s 	 i s 	 f o l l o w e d  	 it 	 i s 	 l i k e l y 	 t o 	 b e 	 w it hi n 	 t h e	
n e x t 	 t w o 	 y e a r s 	
in 	 the 	 me an t ime  	 w e 	 will 	 con tinue 	 t o 	 ide n t if y 	 and 	 judiciously	
p u r s u e 	 o t h e r 	 oppor t u nit i e s 	 w hi c h 	 w e 	 a r e 	 c o n fi d e n t 	 w i l l 	 m e e t	
o u r 	 r e t u r n s 	 c r it e r ia  	 t hi s 	 i s 	 l i k e l y 	 t o 	 m e a n 	 t ha t 	 n e w 	 op e ni n gs	
f or 	 2 0 1 1 	 w i l l 	 b e 	 a t 	 a 	 br o a d l y 	 s i mi la r 	 l e v e l 	 t o 	 la s t 	 y e a r ’ s 	 a n d  	 f or	
the 	 t ime 	 be ing  	 w e 	 plan 	 t o 	 con tinue 	 t o 	 apply 	 our 	 sur plus 	 cash	
fl o w 	 t o w a r ds 	 r e du c i n g 	 n e t 	 d e b t  	 t hi s 	 f e l l 	 b y 	 a 	 f u r t h e r 	 £ 2 0 m	
o v e r 	 the 	 past 	 y e ar 	 t o 	 £ 4 7 m 	
results
 	 	 r e s u l t s 	 m a r k e d 	 a s 	 a d j u s t e d 	 a r e 	 s t a t e d 	 e x c l u d i n g 	 n o n  t r a d i n g 	 i t e m s	
 refe r 	 t o 	 no t e 	 2 
t r g ’ s 	 t r a d i n g 	 m e t r i c s 	 p e r f or m e d 	 w e l l 	 f or 	 t h e 	 5 3 	 w e e k 	 p e r i od	
t o 	 2 	 januar y 	 2 0 1 1 
	 t o tal 	 sale s 	 incr e ased 	 b y 	 7  	  lik e  f or  lik e 	 sale s 	 w e r e	 •	
1  	 l o w e r  	 a n d 	 w e 	 s o l d 	 3 7 	 mi l l i o n 	 m e a l s 	
a d j u s t e d 	 e bi t d a 	 i n c r e a s e d 	 b y 	 8  	 t o 	 £ 8 6 m  •	
a d j u s t e d 	 pr e  t a x 	 pr o fi t 	 i n c r e a s e d 	 b y 	 1 2  	 t o 	 £ 5 6 m  •	
	 g r o u p 	 op e r a t i n g 	 pr o fi t 	 m a r g i n s 	 i n c r e a s e d 	 b y 	 4 0 bp 	 t o	 •	
1 2  6   	 a n d	
	 n e t 	 d e b t  	 a t 	 0  5 5 x 	 g r o u p 	 a d j u s t e d 	 e bi t d a  	 f e l l 	 b y 	 £ 2 0 m	 •	
t o 	 £ 4 7 m 
occupying 
leading 
market 
positions 08 the restaurant group plc annual report 2010
chief executive officer’s  
review of operations 
continued
leisure
2010 2009
total revenue £3737m £ 353  6 m
o p e rat ing 	 pr o fit £729m £691 m
o p e rat ing 	 ma rgin 195 195
frankie  benny’s 197 units 
f r a nk i e 	  	 b e nn y ’ s 	 p e r f or m e d 	 w e l l 	 i n 	 2 0 1 0  	 i n c r e a s i n g	
r e v e nue s  	 mar gins 	 and 	 pr o fits  	 w e 	 ope ned 	 nine 	 ne w 	
r e stauran ts 	 o f 	 which 	 fiv e 	 w er e 	 on 	 noncinema 	 sit e s  	 a ll 	 o f 	 
o u r 	 n e w 	 op e ni n gs 	 a r e 	 t r a d i n g 	 s u p e r bl y 	 a n d 	 a r e 	 s e t 	 t o 	 d e l i v e r	
s t r o n g 	 r e t u r n s  	 o u r 	 f o c u s 	 c o n t i n u e s 	 t o 	 b e 	 d i r e ct e d 	 t o w a r ds	
pr o v i d i n g 	 o u r 	 c u s t om e r s 	 w it h 	 a 	 gr e a t 	 d i ni n g 	 e x p e r i e n c e 	 –	
pl e n t y 	 o f 	 c h o i c e 	 a c r o s s 	 t h e 	 pr i c e 	 po i n t s  	 o f f e r i n gs 	 g e a r e d	
t o w a r ds 	 s p e c ifi c 	 p a r t s 	 o f 	 t h e 	 d a y  	 go od 	 v a l u e 	 a n d 	 s u p e r b	
h o s pit a l it y 	 a n d 	 s e r v i c e  	 a s 	 w it h 	 a l l 	 o u r 	 br a n ds  	 w e 	 e s c h e w e d	
d e e p 	 d i s c o u n t i n g 	 a n d 	 t hi s 	 h e l p e d 	 t o 	 d e l i v e r 	 a 	 s t r o n g 	 m a r g i n	
a n d 	 pr o fi t 	 p e r f or m a n c e  	 w e 	 a n t i c i p a t e 	 op e ni n g 	 b e t w e e n	 
1 2 	 a n d 	 1 5 	 n e w 	 f r a nk i e 	  	 b e nn y ’ s 	 r e s t a u r a n t s 	 i n 	 2 0 1 1 	
chiquito 68 units
c hi quit o 	 p e r f or m e d 	 s o l i d l y 	 du r i n g 	 2 0 1 0 	 a lt h o u g h 	 pr o fi t s	 
w e r e 	 a 	 l it t l e 	 b e l o w 	 t h e 	 pr i or 	 y e a r ’ s 	 l e v e l  	 d u r i n g 	 t h e 	 y e a r 	 w e	
a b s or b e d 	 i np u t 	 c o s t 	 i n c r e a s e s 	 i n 	 or d e r 	 t o 	 m a i n t a i n 	 m e n u	
prices at a level appropriate for the locations in which most  
o f 	 o u r 	 c hi quit o 	 r e s t a u r a n t s 	 op e r a t e  	 w e 	 op e n e d 	 fi v e 	 n e w	
chiquit o 	 r e stauran ts 	 during 	 the 	 y e ar 	 all 	 o f 	 which 	 ar e 	 loc a t ed	
a l o n gs i d e 	 f r a nk i e 	  	 b e nn y ’ s  	 t hi s 	 du a l 	 r o l l 	 o u t 	 s t r a t e g y 	 ha s	
w or k ed 	 w e ll 	 and 	 w e 	 e xpe ct 	 it 	 t o 	 con t inue 	 in 	 2 0 1 1  	 t he 	 ne w	
ope nings 	 ar e 	 pe r f orming 	 ahe a d 	 o f 	 our 	 e xpe cta tions 	 and 	 ar e	
s e t 	 t o 	 d e l i v e r 	 s t r o n g 	 r e t u r n s  	 d u r i n g 	 2 0 1 1 	 w e 	 e x p e ct 	 t o 	 op e n	
34 	 ne w 	 chiquit o 	 r e stauran ts 	
consistently 
good value 
service and 
hospitality
pub restaurants 43 units
p u b 	 r e s t a u r a n t s 	 t r a d e d 	 w e l l 	 du r i n g 	 2 0 1 0  	 i n c r e a s i n g 	 m a r g i n s	
a n d 	 pr o fi t s  	 w e 	 ha v e 	 c o n t i n u e d 	 o u r 	 pr o gr a m m e 	 o f 	 mod i f y i n g	
t h e 	 f or m e r 	 b l u b e c k e r s 	 s it e s 	 t o 	 br i n g 	 t h e m 	 mor e 	 i n t o 	 l i n e 	 w it h	
t h e 	 b r u nni n g 	  	 p r i c e 	 s t y l e 	 o f 	 op e r a t i o n 	 a n d 	 t h e 	 s u b s e qu e n t	
r e sults 	 ha v e 	 be e n 	 v e r y 	 e ncouraging  	 w e 	 e x pe ct 	 t o 	 comple t e 	
t hi s 	 pr o gr a m m e 	 du r i n g 	 2 0 1 1  	 i n 	 d e c e m b e r 	 w e 	 op e n e d 	 a 	 n e w	
p u b 	 r e s t a u r a n t  	 t h e 	 n e v i l l 	 cr e s t 	  	 g u n  	 n e a r 	 t u nbr i dg e 	 w e l l s 	
i t 	 i s 	 t r a d i n g 	 s u p e r bl y 	 a n d 	 i s 	 s e t 	 t o 	 d e l i v e r 	 s t r o n g 	 r e t u r n s 	
d u r i n g 	 2 0 1 1 	 w e 	 e x p e ct 	 t o 	 op e n 	 2  3 	 n e w 	 p u b 	 r e s t a u r a n t s 	
garfunkel’s 23 units 
gar f unk e l ’ s 	 pe r f or med 	 supe r bly 	 dur ing 	 2 0 1 0 	 de liv e r ing	 
a 	 signific an t 	 incr e ase 	 in 	 mar gins 	 and 	pr o fits  	 t he 	 busine s s 	
trade s 	 pr edominan tly 	 in 	 ce n tral 	 london 	 close 	 t o 	 the a tr e s 	
s h oppi n g 	 d i s t r i c t s 	 a n d 	 o t h e r 	 t o u r i s t 	 a t t r a ct i o n s  	 d u r i n g 	 t h e	
y e a r 	 w e 	 op e n e d 	 t w o 	 n e w 	 r e s t a u r a n t s 	 a n d 	 t h e s e 	 a r e 	 t r a d i n g	
w e ll 	 and 	 ar e 	 se t 	 t o 	 de liv e r 	 str ong 	 r e tur ns  	 w e 	 e x pe ct 	 t o 	 ope n	
u p 	 t o 	 t hr e e 	 n e w 	 g a r f u nk e l ’ s 	 r e s t a u r a n t s 	 du r i n g 	 2 0 1 1 	 introduction business review governance financial statements
the restaurant group plc annual report 2010 09 
o ur 	 conce ssions 	 busine ss  	 de spit e 	 ha ving 	 t o 	 cope 	 with	
d e c l i ni n g 	 p a s s e n g e r 	 n u m b e r s 	  “ p a x ”  	 a n d 	 e x c e p t i o na l	
m e t e or o l o g i c a l 	 e v e n t s  	 ha d 	 a n 	 e x c e l l e n t 	 y e a r 	 a n d 	 d e l i v e r e d	 
a 	 r e c or d 	 l e v e l 	 o f 	 pr o fi t s 	
t r a d i n g 	 i n 	 t h e 	 a i r por t s 	 m a r k e t pla c e 	 r e m a i n e d 	 t o u g h 	 i n 	 2 0 1 0	
with 	 pa x 	 de clining 	 f or 	 a 	 third 	 y e ar 	  albeit 	 a t 	 a 	 much 	 slo w e r 	 ra t e	
o f 	 d e c l i n e 	 c om p a r e d 	 t o 	 2 0 0 9   	 o u r 	 e f f or t s 	 ha v e 	 b e e n 	 f o c u s e d	
o n 	 i m pr o v i n g 	 o u r 	 o f f e r i n g  	 hi g h 	 l e v e l s 	 o f 	 c u s t om e r 	 s e r v i c e 	 a n d	
t i g h t 	 c o s t 	 c o n t r o l s 	 w it h 	 t h e 	 ob je ct i v e 	 o f 	 i m pr o v i n g 	 m a r g i n s	
a n d 	 gr o w i n g 	 pr o fi t s  	 t hi s 	 a ppr o a c h 	 s e r v e d 	 u s 	 w e l l 	 du r i n g	
2 0 1 0 	 a n d 	 t h e 	 c o n c e s s i o n s 	 d i v i s i o n 	 pr odu c e d 	 a 	 r e c or d 	 l e v e l	 
o f 	 e bi t d a 	  £ 1 8  8 m  	 a n d 	 pr o fi t s 	 o f 	 £ 1 4  2 m  	 r e pr e s e n t i n g 	 a n	
i n c r e a s e 	 o f 	 2 9  	 o n 	 t h e 	 pr e v i o u s 	 y e a r  	 o u r 	 a bi l it y 	 t o 	 op e r a t e	
e f f e ct i v e l y 	 a n d 	 pr o fi t a bl y 	 i n 	 t hi s 	 m a r k e t 	 s e gm e n t  	 a n d 	 i n	
c ha l l e n g i n g 	 c o n d it i o n s  	 d e mo n s t r a t e s 	 o u r 	 hi g h 	 l e v e l s 	 o f	
e x p e r t i s e 	 a n d 	 o u r 	 c om mit m e n t 	 t o 	 t h e 	 a i r por t s 	 m a r k e t pla c e 	
w e 	 o c c u p y 	 t h e 	 l e a d i n g 	 m a r k e t 	 po s it i o n 	 i n 	 t h e 	 u k 	 a i r por t s 	 a n d	
ha v e 	 a 	 c o n s i s t e n t 	 t r a c k 	 r e c or d 	 o f 	 d e l i v e r i n g 	 e x c e l l e n t 	 r e s ult s 	
a s 	 e c o n omi c 	 gr o w t h 	 r e s u m e s  	 w e 	 a n t i c i p a t e 	 a n 	 i m pr o v i n g	
t r e n d 	 i n 	 p a x 	 a n d 	 t hi s 	 w i l l 	 b e n e fi t 	 o u r 	 c o n c e s s i o n s 	 b u s i n e s s 	
d ur ing 	 the 	 y e ar 	 w e 	 ope ned 	 se v e n 	 ne w 	 sit e s 	 – 	 the se 	 ar e	
t r a d i n g 	 w e l l 	 a n d 	 a r e 	 s e t 	 t o 	 d e l i v e r 	 go od 	 r e t u r n s  	 w e 	 e x p e ct	 
t o 	 op e n 	 b e t w e e n 	 t w o 	 a n d 	 f o u r 	 n e w 	 c o n c e s s i o n s 	 s it e s 	 i n 	 2 0 1 1 	
concessions 58 units
2010 2009
total revenue £920m £ 822m
o p e rat ing 	 pr o fit £142m £11 0m
o p e rat ing 	 ma rgin 155 1 3 4
sticking to 
our areas of 
expertise 10 the restaurant group plc annual report 2010
market dynamics and the economy
f or 	 mo s t 	 p e opl e  	 e a t i n g 	 o u t 	 ha s 	 b e c om e 	 a 	 ha bit u a l 	 a ct i v it y	
a n d 	 i s 	 s om e t hi n g 	 t ha t 	 t h e y 	 a r e 	 r e l u ct a n t 	 t o 	 g i v e 	 u p  	 d e s pit e	
t h e 	 c ha l l e n g i n g 	 e c o n omi c 	 c o n d it i o n s 	 t ha t 	 ha v e 	 c ha r a ct e r i s e d	
t h e 	 u k 	 s i n c e 	 2 0 0 8  	 t h e 	 pr op e n s it y 	 f or 	 p e opl e 	 t o 	 e a t 	 a w a y	
from their homes has continued this is a secular trend 
dr i v e n 	 la r g e l y 	 b y 	 s o c i o  e c o n omic 	 f a ct or s  	 e a t i n g 	 o u t	
c o n s t it u t e s 	 a 	 “ s m a l l 	 t i c k e t ” 	 it e m 	 w hi c h 	 a b s or b s 	 a 	 r e la t i v e l y	
s m a l l 	 pr opor t i o n 	 o f 	 d i s po s a bl e 	 i n c om e  	 w e 	 e x p e ct 	 t hi s	 
t r e n d 	 t o 	 c o n t i n u e 	 a n d 	 t hi s 	 a u gu r s 	 w e l l 	 f or 	 t h e 	 f u t u r e 	
dur ing 	 2 0 1 0  	 our 	 se ct or 	 con tinued 	 t o 	 be 	 charact erised 	 
b y 	 s i g nifi c a n t 	 a n d 	 o f t e n 	 d e e p 	 d i s c o u n t i n g  	 “ b u y 	 o n e 	 g e t	 
o n e	f r e e ”	a n d	s i m i l a r	t y p e s	o f	p r o m o ti o n s	h a v e	b e e n	
c om mo npla c e 	 a n d 	 c o n t i n u e 	 t o 	 b e 	 u s e d 	 f r e qu e n t l y 	 b y 	 m a n y	
o th e r	c o m p a n i e s 	o u r	a p p r o a c h	h a s	b e e n	t o	a v o i d	th e	 
d e e p 	 d i s c o u n t i n g 	 “ t r e a dmi l l ”  	 r a t h e r  	 t o 	 g i v e 	 o u r 	 c u s t om e r s	
c o n s i s t e n tl y	g o o d	v a l u e 	s e r v i c e	a n d	h o s p i t a l i t y	a n d	t o	
br o a d e n 	 t h e 	 a ud i e n c e 	 o f 	 po t e n t ia l 	 c u s t om e r s  	 pr e domi na n t l y	
th r o u g h	i n c r e a s e d	u s e	o f	d i g i t a l	m a r k e ti n g	t e c h n i q u e s 	 
d u r i n g 	 2 0 1 0 	 w e 	 s i g nifi c a n t l y 	 i n c r e a s e d 	 m a r k e t i n g 	 a c r o s s	
s o c ia l 	 n e t w or k i n g 	 w e b s it e s  	 e  m a r k e t e r s 	 a n d 	 s m a r t ph o n e	
applications and these have had a positive impact on 
revenues this approach has meant that we have continued 
t o 	 f o c u s 	 o n 	 m a i n t a i n i n g 	 a n d 	 i m pr o v i n g 	 m a r g i n s  	 gr o w i n g	
pr o fi t s 	 a n d 	 c a s h 	 fl o w s 	 a n d  	 v e r y 	 i m por t a n t l y  	 s e c u r i n g 	 hi g h	
returns on our invested capital 
as 	 the 	 uk 	 climbs 	 out 	 o f 	 r e ce ssion  	 the 	 macr oe conomic	
pi ct u r e 	 i s 	 b e c omi n g 	 c l e a r e r  	 a lt h o u g h 	 it 	 i s 	 n o t 	 a n 	 i m m e d ia t e l y	
a t t r a ct i v e 	 la n ds c a p e 	 it 	 i s 	 a 	 m u c h 	 l e s s 	 d a r k 	 a n d 	 bl e a k 	 s c e na r i o	
t ha n 	 t h e 	 o n e 	 f a c e d 	 a t 	 t h e 	 b e g i nni n g 	 o f 	 2 0 0 9  	 t h e 	 u k 	 ha s	
star t ed 	 t o 	 e me r ge 	 fr om 	 the 	 de epe st 	 r e ce ssion 	 se e n 	 f or 	
se v e ral 	 ge ne ra t ions 	 and  	 although 	 during 	 the 	 final 	 quar t e r 	 
o f 	 2 0 1 0 	 t h e 	 r e c o v e r y 	 l o s t 	 s om e 	 t r a ct i o n 	  m a i nl y 	 du e 	 t o 	 t h e	
se v e r e 	 uk 	 w e a the r 	 the 	 pa t t er n 	 se ems 	 t o 	 be 	 f ollo wing	 
a 	 br oadly 	 similar 	 tr e nd 	 t o 	 tha t 	 se e n 	 in 	 the 	 e arly 	 1 99 0 ’ s 	
t h e	g o v e r n m e n t	h a s	c o m m i t t e d	t o	s i g n i fi c a n t	c h a n g e s	i n	
s p e n d i n g	a n d	t a x a ti o n	a n d	th e	i m p a c t	o f	th e s e	w i l l	b e	fe l t	
d u r i n g	2 0 1 1 	a	l a r g e	p a r t	o f	th e	fi s c a l	s q u e e z e	i s	b e i n g	
e f fe c t e d	th r o u g h	s p e n d i n g	 c u ts	w h i c h 	i n	r e a l	t e r m s 	l o o k	
q u i t e	d e e p	 a l th o u g h	th e s e	a r e	l e s s	d r a c o n i a n	i n	n o m i n a l	
t e r m s  	i t	i s	l i k e l y	th a t	th e s e	c u ts	w i l l	h a v e	a n	i m p a c t	u p o n	
e m p l o y m e n t	l e v e l s	i n	th e	p u b l i c	s e c t o r	a n d 	p o t e n ti a l l y 	 
those 	 par ts 	 o f 	 the 	 pr iv a t e 	 se ct or 	 whe r e 	 the r e 	 is 	 a 	 high 	 le v el	 
o f	d e p e n d e n c y	u p o n	g o v e r n m e n t	c o n tr a c ts 	t h e r e	i s	 
a	c l e a r	e x p e c t a ti o n	th a t	th e	s l a c k	w h i c h	th i s	m a y	c r e a t e	w i l l	 
b e	a b s o r b e d	b y	th e	p r i v a t e	s e c t o r 	c e r t a i n l y 	c o r p o r a ti o n s	
h a v e	s i g n i fi c a n tl y	s t e p p e d	u p	c a p i t a l	s p e n d i n g 	a n d	m a n y	
e x p o r t e r s	a r e	th r i v i n g 	w h i c h	s h o u l d	b e	p o s i ti v e	f o r	
e m p l o y m e n t 	h o w e v e r 	e x p e c t a ti o n s	f o r	g r o w th	i n	c o n s u m e r	
spend are in the shortterm more modest there are 
s e v e r a l	f a c t o r s	i m p a c ti n g	c o n s u m e r	 s p e n d 	i n c l u d i n g	h i g h e r	
l e v e l s	o f	t a x a ti o n	 b o th	d i r e c t	a n d	i n d i r e c t  	u n e m p l o y m e n t	
l e v e l s	a p p r o a c h i n g	8 	 th e	fe a r	o f	u n e m p l o y m e n t	a l s o	
r e m a i n s	a	c o n c e r n	f o r	m a n y	u k	h o u s e h o l d s 	a n d	r i s i n g	
h o u s e h o l d	i n fl a ti o n 	t h i s	l a t t e r	p o i n t	h a s	b e c o m e	v e r y	
t o p i c a l	r e c e n tl y	a n d	c o n v e n t i o n a l	w i s d o m	w o u l d	s u g g e s t	 
a n	i n c r e a s e	i n	i n t e r e s t	r a t e s	t o	c o u n t e r	i n fl a ti o n 	h o w e v e r 	 
i t	a p p e a r s	th a t 	a s	th e	e c o n o m i c	r e c o v e r y	i s	s t i l l	i n	i ts	e a r l y	
s t a g e s	a n d	w i th	th e	i n fl a ti o n	i n d i c e s	b e i n g	s i g n i fi c a n tl y	
i m p a c t e d	b y	v a t	i n c r e a s e s	a n d	“ i m p o r t e d ”	i n fl a ti o n 	th e	
m o n e t a r y	p o l i c y	c o m m i t t e e	 “ m p c ” 	a p p e a r s	i n c l i n e d	t o	
m a i n t a i n	a	r e l a x e d	m o n e t a r y	s t a n c e 	p e r h a p s	i n	p a r t	t o	
r e d u c e	th e	r i s k	o f	 p r e c i p i t a ti n g	a	s h a r p	s l o w d o w n	i n	
e c o n o m i c	g r o w th	w i th	th e	c o n c o m i t a n t	r i s k	o f	d e fl a ti o n 	 
i f	i n t e r e s t	r a t e s	r i s e	o n l y	m o d e s tl y	a n d	m o r t g a g e	r a t e s	
r e m a i n	a t	l o w	l e v e l s	th i s	w i l l 	t o	a	s i g n i fi c a n t	d e g r e e 	c o n t i n u e	
t o	s u p p o r t	h o u s e h o l d s ’	d i s c r e ti o n a r y	s p e n d	l e v e l s	a n d 	
p r o v i d i n g	e m p l o y m e n t	l e v e l s	d o	n o t	d e t e r i o r a t e 	th i s	s h o u l d	
e n a b l e	c o n s u m e r	c o n fi d e n c e	t o	b u i l d 	i n i t i a l l y	th i s	i s	l i k e l y	 
t o	b e	g r a d u a l 	a l th o u g h	o n c e	i t	b e c o m e s	e v i d e n t	th a t	
u n e m p l o y m e n t	l e v e l s	a r e	n o t	d r a m a ti c a l l y	i n c r e a s i n g	 
 a n d	a s	th e	fe a r	o f	u n e m p l o y m e n t	d i m i n i s h e s 	th e	 
r e c o v e r y	i n	c o n s u m e r	c o n fi d e n c e	s h o u l d	g a th e r	p a c e 	
chief executive officer’s  
review of operations 
continued introduction business review governance financial statements
the restaurant group plc annual report 2010 11 
c o s t 	 i n fla t i o n 	 a l s o 	 po s e s 	 c ha l l e n g e s 	 f or 	 o u r 	 s e ct or  	 a lt h o u g h	
this 	 is 	 no t 	 a 	 ne w 	 phe nome non  	 during 	 much 	 o f 	 the 	 last	
d e c a d e  	 o u r 	 s e ct or 	 o f t e n 	 e x p e r i e n c e d 	 c o s t 	 pr e s s u r e s	
 e s p e c ia l l y 	 w it h 	 t h e 	 s i g nifi c a n t 	 a nn u a l 	 i n c r e a s e s 	 i n 	 t h e	
mi ni m u m 	 w a g e  	 a n d 	 i n 	 2 0 0 7 	 a n d 	 2 0 0 8 	 f o od 	 i np u t 	 c o s t s	
i n c r e a s e d 	 quit e 	 qui c k l y  	 c u r r e n t l y 	 t h e r e 	 i s 	 r e la t i v e l y 	 l o w	 
w a g e 	 c o s t 	 pr e s s u r e  	 b u t 	 a l s o 	 s om e 	 r i s k 	 t ha t 	 i n fla t i o na r y	
e x p e ct a t i o n s 	 c o ul d 	 f e e d 	 t hr o u g h 	 i n t o 	 u k 	 w a g e 	 b a r g a i ni n g 	
c om mod it y 	 pr i c e s 	  i n c l ud i n g 	 f o od 	 a n d 	 o i l  	 ha v e 	 r i s e n 	 a n d	 
t hi s 	 t r e n d 	 i s 	 e x p e ct e d 	 t o 	 c o n t i n u e  	 t r g ’ s 	 a ppr o a c h 	 ha s  	 f or	
se v e ral 	 y e ars  	 be e n 	 t o 	 pr o t e ct 	 the 	 busine ss 	 fr om 	 rising 	 input	
c o s t s 	 b y 	 t a k i n g 	 o u t 	 fi x e d 	  or 	 c a pp e d  	 pr i c e 	 c o n t r a ct s 	 w it h	
s u ppl i e r s  	 a t 	 pr e s e n t 	 o v e r 	 5 0  	 o f 	 o u r 	 i np u t 	 c o s t s 	 ha v e 	 fi x e d	
 or 	 c a pp e d  	 pr i c e s 	 f or 	 o n e 	 y e a r  	 a n d 	 a ppr o x i m a t e l y 	 o n e 	 t hi r d	
a r e 	 fi x e d 	  or 	 c a pp e d  	 f or 	 t w o 	 y e a r s  	 t hi s 	 a ppr o a c h 	 ha s 	 s e r v e d	
us well and is one that we intend to continue
future prospects
w e 	 a r e 	 pla nni n g 	 o n 	 t h e 	 b a s i s 	 t ha t 	 t h e 	 o u t l o ok 	 f or	 
c o n s u m e r  f a c i n g 	 b u s i n e s s e s 	 c o n t i n u e s 	 t o 	 r e m a i n 	 a s	
c ha l l e n g i n g 	 du r i n g 	 2 0 1 1 	 a s 	 it 	 w a s 	 la s t 	 y e a r 	 a n d 	 w e 	 ha v e	
f r a m e d 	 o u r 	 pla n s 	 a c c or d i n gl y  	 o u r 	 b u s i n e s s 	 ha s 	 e x p e r i e n c e d	
s om e 	 v e r y 	 t o u g h 	 t r a d i n g 	 c o n d it i o n s 	 o v e r 	 t h e 	 p a s t 	 t w o 	 y e a r s	
and 	 dur ing 	 tha t 	 time 	 sale s  	 pr o fits 	 and 	 cash 	 flo w 	 all 	 gr e w  	
t r g 	 i s 	 w e l l 	 pla c e d 	 t o 	 c op e 	 w it h 	 c ha l l e n g i n g 	 c o n d it i o n s 	 a n d 	
v er y 	 impor tan t ly  	 t o 	 be nefit 	 substan tially 	 fr om 	 the 	 up tur n 	 
i n 	 c o n s u m e r 	 c o n fi d e n c e 	 t ha t 	 w i l l  	 i n 	 du e 	 c o u r s e  	 pr e v a i l 	
t r g ’ s 	 b u s i n e s s e s 	 c om m a n d 	 s t r o n g 	 m a r k e t 	 po s it i o n s 	 i n 	 e a c h	
o f 	 our 	 chose n 	 se gme n ts 	 and 	 our 	 brands 	 ar e 	 w ell 	 r e cognised	
f or 	 t h e 	 qu a l it y 	 a n d 	 v a l u e 	 o f 	 o u r 	 o f f e r i n gs  	 w e 	 ha v e 	 a 	 r ob u s t	
a n d 	 w e l l 	 pr o v e n 	 b u s i n e s s 	 mod e l  	 a 	 s t r o n g 	 b a la n c e 	 s h e e t 	 a n d	
w e 	 a r e 	 w e l l 	 po s it i o n e d 	 t o 	 c o n t i n u e 	 o u r 	 e x p a n s i o n  	 j u s t 	 a s 	 w e	
d i d 	 i n 	 2 0 1 0  	 du r i n g 	 2 0 1 1 	 w e 	 w i l l 	 c o n t i n u e 	 t o 	
stick 	 t o 	 our 	 ar e as 	 o f 	 e xper tise  •	
	 f o c u s 	 o n 	 o u r 	 c u s t om e r s 	 b y 	 pr o v i d i n g 	 e x c e l l e n t 	 v a l u e	 •	
a nd 	 se r v ic e 
	 main tain 	 high 	 standar ds 	 o f 	 opera tional 	 e f ficie ncy 	 •	
a nd 	 e x e cu t io n 
car e fully 	 con tr ol 	 our 	 costs  •	
a dd 	 hi g h 	 qu a l it y 	 n e w 	 r e s t a u r a n t s 	 t o 	 o u r 	 por t f o l io  	 a n d	 •	
c o n t i n u e 	 t o 	 f o c u s 	 o n 	 c a s h 	 fl o w 	 a n d 	 r e t u r n s 	 •	
b y 	 s o 	 do i n g  	 o u r 	 a i m s 	 a r e 	 t o 	 c o n t i n u e 	 t o 	 s t r e n g t h e n 	 o u r	
m a r k e t 	 po s it i o n s 	 a n d 	 d e l i v e r 	 l o n g  t e r m 	 a n d 	 s u s t a i na bl e	
pr o fi t a bl e 	 gr o w t h 	
t h e 	 d i f fi c ult i e s 	 o u r 	 t e a m 	 f a c e d 	 du r i n g 	 2 0 1 0 	 w e r e 	 s i g nifi c a n t	
b u t  	 a s 	 a lw a y s  	 o u r 	 p e opl e 	 r o s e 	 t o 	 t h e 	 c ha l l e n g e 	 a n d 	 d e l i v e r e d	
a	v e r y	i m p r e s s i v e	p e r f o r m a n c e 	w e	a r e	v e r y	f o r tu n a t e	 
t o	h a v e	a n	o u ts t a n d i n g	a n d	l o y a l	t e a m	a t	t r g	a n d	i	a m	
con fide n t 	 tha t 	 the y 	 will 	 be 	 w or k ing 	 t o w ards 	 de liv e r ing 	 ano ther 	
s t r o n g 	 p e r f or m a n c e 	 t hi s 	 y e a r  	 t h e 	 c u r r e n t 	 y e a r 	 ha s 	 s t a r t e d	
w e l l  	 w it h 	 l i k e  f or  l i k e 	 s a l e s 	 gr o w i n g 	 i n 	 e a c h 	 o f 	 t h e 	 fi r s t 	 t w o	
mon ths 	 and  	 a f t e r 	 nine 	 w e e k s  	 t o tal 	 sale s 	 ar e 	 8  	 ahe ad 	 o f	
la s t 	 y e a r 	  l i k e  f or  l i k e 	 s a l e s 	 u p 	 3    	 w e 	 a r e 	 l o ok i n g 	 t o 	 b ui l d	
f ur the r 	 on 	 this 	 as 	 the 	 y e ar 	 pr ogr e s se s 
andrew page
chie f 	 e x e cut iv e 	 o f fice r
9 march 2011
a robust  
and well  
proven  
business  
model