Profits off the boil at City Centre

City Centre Restaurants, one of the Britain's largest companies in the eating out sector, has seen profits fall amid what it referred to as 'difficult market conditions'.

The group, which owns Chiquito's, Frankie and Benny's, Garfunkel's and Caffe Uno saw sales rise from £217.6m to £227.9m but profits fall slightly to £15.6m.

But the once-troubled retailer, which owns 248 branded restaurants in the UK, said it had sharpened its focus with the disposal of two brands. The group is also currently finalising the sale of its Wok Wok chain.

The group had a buyer for the Wok Wok units as a package prior to September 11, but the deal fell through as a result of the terrorist atrocities and the subsequent effect on the restaurant trade. The outlets are now being sold individually.

Despite the profits set-back the management were notably upbeat. Executive chairman Alan Jackson said: "The company's results demonstrate how much has been achieved in reshaping and refocusing the group during 2001.

"It is now in excellent shape with a clear strategy, strong brands and is enjoying an encouraging start to the current year," he added.

The market seemed to agree with Mr Jackson and shares were trading up on news of the results.

The chairman has led the company through a restructuring process and put a new management team in place. One industry observer said: "It's no secret that City Centre has been through a pretty torrid time."

The company has split its business into three divisions; high street, concessions - where the company has outlets in Airports and railway stations - and leisure parks, often housing a cinema, health club and several restaurants.

It said it would concentrate on businesses which give high returns on capital, good growth and barriers to entry.