Go on diet with Chez Gerard

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The Independent Online
Groupe Chez Gerard has won as strong a following for its restaurants from lunch time customers, as it has from investors for its shares, writes Richard Phillips.

Last week its final results rounded off a solid recent performance for the group. There is no question that Chez Gerard, run by the experienced duo of Neville Abraham and Laurence Isaacson, has put together an appealing menu.

But the expansion plans that accompanied the results could set off alarm bells. A skills shortage has meant turning to Paris for trained chefs - not cheap - while the group wants to open another 20 restaurants over the next two years.

Demographics favour metropolitan restaurant businesses which can take an ever-increasing share of the leisure budget from 'dual income, no kids' couples. However, while Chez Gerard should always be able to attract customers, consumers' current joie de vivre will not last for ever. Customers from the City as well might drop away if times in financial markets get tough. On a forward multiple of 18.5 times earnings, the shares look pricey, and should not be chased.