* Sees growing Garfunkel’s unit by 1 or 2 sites a yr

Cyclical Consumer Goods

* Total dividend up 4 pct

* 2009 adj pretax profit rises marginally

* Shares fall 4.6 pct (Recasts; adds CEO, broker comments)

By Tresa Sherin Morera

BANGALORE, March 3 (Reuters) – Restaurant Group Plc (RTN.L), which owns the Garfunkel’s and Frankie & Benny’s chains, posted higher 2009 profit, beating market estimates, and said it expected an improvement at its concessions business in 2010.

The company, whose concessions business operates table- service restaurants and cafes principally in UK airports, said this division was hurt by significant declines in air passenger numbers in 2009.

“When we get into 2011 and beyond, when economic growth resumes back to trend level, I am extremely optimistic that this (concessions) business will start to fly again,” Chief Executive Andrew Page told Reuters.

However, the company expressed concerns over macro-economic factors such as interest rates and unemployment.

“In the short term much will depend upon the timing and impact of the exit from the monetary and fiscal stimuli and in turn this is likely to be impacted by the outcome of the general election,” Restaurant Group said in a statement.

Seymour Pierce retained its “sell” rating on the stock, saying: “This is based on taking a negative macro view on the consumer in 2010 and a negative view on the generic restaurant business model.”

Restaurant Group shares were down 4.6 percent at 205 pence at 1247 GMT on the London Stock Exchange.

PROFIT RISES

For the year ended Dec. 27, 2009, the company said its pretax profit before items rose marginally to 50 million pounds ($75.26 million) from 48.9 million pounds last year.

Total revenue grew 4.6 percent to 436 million pounds, while sales at its concessions business were down 6 percent at 82.2 million pounds.

Statutory pretax profit rose 2.5 percent to 48 million pounds.

Analysts were expecting a full-year pretax profit of 46.5 million pounds on revenue of 427.9 million pounds, according to Thomson Reuters I/B/E/S.

The company said it declared a second interim dividend of 6.3 pence and proposed a final dividend of 0.3 pence, taking the full-year dividend to 8.0 pence, up 4 percent from last year.

The operator of about 367 restaurants and pubs said on Wednesday its total revenue grew 6 percent, while like-for-like sales were up a percent after nine weeks into the new year.

Restaurant Group, which aims to open 15 to 25 new sites in 2010, said it would open two new sites for its Garfunkel’s business this year.

“And we are looking to grow (Garfunkel’s business) very gradually by one or two sites a year,” CEO Page said.

($1=.6644 Pound) (Editing by Aradhana Aravindan)