The chairman of Clapham House Group has defended the negative comments that sent shares in the quoted restaurant sector into a tailspin, claiming that they had “brought a dose of reality to the sector”.

David Page, who on Monday delivered a stark picture of the prospects for consumer spending, yesterday rejected suggestions by some rivals that Clapham House was the only restaurant company to find the going tough. “Anecdotally, we don’t think that’s the case,” he said.

Shares of Clapham House fell 40 per cent after the company told investors that its Tootsies restaurants located in shopping centres had suffered a fall-off in trade because there were fewer shoppers. It also reined back its Gourmet Burger Kitchen opening programme, citing inflated rents and fragile consumer confidence.

Mr Page, well-known in the industry for his outspoken comments, said he hoped that the profit warning might persuade property owners to take a more realistic view on the rents they charged to restaurant operators: “These guys should thank us, as it will make their negotiations with landlords easier, though I don’t suppose we’ll be on anyone’s Christmas card list.”

The company, which also owns the Bombay Bicycle Club and The Real Greek brands, is understood to have pulled out of negotiations on sites in Leicester and Camberley, Surrey, after deciding that the rent levels being asked were too high.

Analysts have suggested that the share sell-off could spark interest in quoted restaurant stocks from private equity firms. Greg Feehely, at Altium Securities, said: “Our fear is a repeat of 2002-03, when PizzaExpress, Groupe Chez Gérard and Signature Restaurants were taken private for what were bargain basement prices.”

Asked whether Clapham House had received any such approaches, Mr Page replied: “Not at the moment, but who knows.”

The former PizzaExpress boss said he remained confident over the company’s medium-term prospects, claiming that shareholders were “being grown-up” about its current problems. “They realise it’s a good company and will wait for the recovery,” he said.

Clapham House, which operates 90 outlets, reported a 6 per cent fall in pretax profits to £563,000 in the six months to September 30, from turnover up 37 per cent to £28.1 million. Underlying earnings excluding restruc-turing and share-based costs rose by 50 per cent to £3.3 million.

Mr Page said he was confident that menu changes at Tootsies would boost business, although he admitted that up to half a dozen of the remaining 24 Tootsies eateries could be converted to the Gourmet Burger format.

The group has reduced its opening programme next year from about 30 restaurants to 18, of which five are Gourmet Burger franchises in Turkey and the Middle East. Paul Campbell, the chief executive, said that the company was hopeful of signing deals on two new territories during 2008, possibly in the Far East and Eastern Europe. It was also discussing a further franchise deal in the Mediterranean.

Shares of Clapham House, which peaked at 415p in May, rose 17½p to 179½p amid speculation of possible bid interest.

Alarm bells

Profit warning menu:

— Uncertain economic outlook
— Rising food cost inflation
— Increased rent levels
— Reduced opening programme
— Delay to two London openings
— Poor sales at Tootsies
— Higher interest rates
— Increased debt levels

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