UK restaurant group PizzaExpress made a surprise announcement yesterday [Monday] that CEO Ian Eldrige is to leave the business. Chairman David Page will succeed him.
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Page told Dow Jones Newswires that Eldridge was planning to take a six month break and then would probably move back into the leisure sector. Eldrige’s career has henceforth been spent in the hotel and restaurant sector.
Analysts greeted the news with little excitement. While the markets never react positively to the departure of a CEO under whom a company has performed well, news that Page will succeed Eldridge allays any fears of a rocky transition. David Liston, an analyst at fund manager Gerrard Ltd., said while news of Eldridge’s departure was surprising it was only a “slight negative. That David Page is the one replacing him is good news,” he said.
Meanwhile the group reported first-half profits up 8% at £21.1m (US$30.1m), at the lower end of analysts’ expectations of £21-22.5m. This figure includes a £700,000 one-time hit for exiting the United States, where its two units were not running at a profit. Total sales came in at £103.8m, 16% up on the same period of the previous financial year.
PizzaExpress operates 290 pizza and pasta restaurants, many of them under franchise agreements. Initially badly hit by the downturn in tourism following the terrorist attacks of 11 September last year, the company said “encouraging trends outside London continued to support a gradual improvement in like-for-like sales trends in London”.
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By GlobalDataRetail activity through the Sainsbury supermarket group, which sells PizzaExpress products in 300 of its stores, may have masked a fall in the core pizza restaurant business.
