Trading Update

City Centre Restaurants PLC
8 February 2001


                         CITY CENTRE RESTAURANTS PLC
                Update on Current Trading and Strategic Review


Current Trading

Trading during the second half of the year continued to be disappointing and
did not show the upturn that we had anticipated at the time of the interim
results. Furthermore, the performance of a number of new openings has been
generally disappointing over recent months. An unanticipated deterioration in
trading during the last few weeks of the year had a substantial impact on
operating profit with the result that profits for the year ended 31 December
2000 will now be below market expectations.

Trading in the New Year has been mixed. In particular, Garfunkel's was ahead
of our expectations and Frankie & Benny's continued its excellent track record
while Caffe Uno, Chiquito's and Est Est Est are not yet trading
satisfactorily.

It is expected that the Group will announce its results for 2000 at the end of
March.

Strategic Review

In October 2000, the Board of City Centre asked Andrew Guy, the newly
appointed Chief Executive, to conduct a strategic review of the business to
identify the appropriate actions that would maximise shareholder value. Each
brand has been thoroughly analysed and a number of management actions are
being implemented as follows:


Developing Brands (Frankie & Benny's; Caffe Uno; Est Est Est and Wok Wok)

Frankie & Benny's now represents the largest proportion of Group turnover and
continues to perform strongly. It is our intention to continue to grow this
brand with eight new restaurants planned in the UK this year and, as
previously announced, our first two restaurants in Spain will also open during
the course of this year.


Caffe Uno has not performed satisfactorily due to management instability
resulting in operating costs being higher than anticipated. Furthermore, some
new openings have shown a disappointing performance. We have recently
installed a new management team, led by Keith Stewart who was previously
Managing Director of Granada Retail Services. Since joining, he has already
made significant changes to the administrative structure of this brand and has
focused on increasing margins through various initiatives including a new menu
offer which will be introduced at the end of this month. 16 Caffe Unos are to
be refurbished during the course of this year at an estimated cost of £1
million. We have temporarily frozen the new opening programme of this brand
until we are satisfied that Caffe Uno has been properly refocused and
profitability has been improved.


Est Est Est has had a difficult transitional year following the departure of
the original founders during 1999. Subsequent changes to its market
positioning and, in particular, its revisions to its offering were not well
received by the market. A new Managing Director was appointed in September and
actions have been taken, including introducing a new menu, to recapture the
brand's previous market position.

Measures have also been put in place to maximise procurement benefits on a
cross-brand basis for Caffe Uno and Est Est Est.


Wok Wok suffered during 2000 from an over-ambitious expansion programme which
led to adverse variances in labour and food costs affecting overall
performance. Management has taken steps to improve performance by appointing
Trish Corzine to lead the team in the improvement of the business alongside
her existing responsibilities as Director in charge of the Group's highly
successful airport portfolio. At the same time we have ceased new openings
until the required profitability has been achieved in existing units.


Developed Brands (Garfunkel's; Chiquito's)

The strategic review has reinforced management's view that Garfunkel's is an
excellent, highly cash generative business with strong sales growth and good
margins. New openings at airport locations continue to be successful and
management plans to invest in and expand this well established brand.


Chiquito's performance during 2000 was affected by the temporary closure, for
refurbishment, of the flagship Leicester Square unit which generates an
important contribution to this brand's profits. The business has also recently
felt the impact of a high level of rental cost increases at a number of its
units. A number of efficiency measures to reduce wage and purchasing costs
have now been put in place to counteract this and improve performance.


Deep Pan Pizza

Following management actions to rationalise the business, Deep Pan Pizza now
represents around 10 per cent. of Group turnover. After an extensive review of
the business, including a review of certain third party offers for the
business, the Board has concluded that this brand currently has a higher value
if retained within the Group than could be achieved via an immediate sale. The
business is cash generative and management have taken actions to improve
profitability in the short term.


OK Diners

Management have concluded that OK Diners is not a business which they wish to
pursue further. Actions have been taken to arrange for the disposal of this
business and an agreement is expected to be signed shortly.


Management and Cost Reduction

Alongside performance improvements, the new Chief Executive has also
streamlined the management structure. The Group is now operating with one less
management tier, namely divisional managing directors, who were previously
each responsible for several brands. The senior manager responsible for each
brand now communicates directly with the Chief Executive. As outlined above,
management changes have been made where brands have underperformed. There has
also been a review and subsequent reduction in the number of Head Office
executives.


The level of ongoing central administration costs has also been reviewed and
as a consequence of the management changes mentioned above and other cost
reductions, we expect overall administration costs to fall by a total of
approximately £1.5 million on an annualised basis from July 2001.


Capital Expenditure

New restaurant openings will continue in a more controlled manner. Openings
will be restricted to the best performing brands and will be financed solely
from the free cash flow generated by the Group.


Provisions

The expected sale of OK Diners will give rise to an exceptional write down. In
addition, as part of the annual accounts process, the Board is likely to
consider a provision against the carrying value of the assets of Deep Pan
Pizza.


Conclusion

Following on from the strategic review process, the Board has asked Andrew Guy
and his new management team to take all of the actions necessary to restore
the performance of the Group. At the same time, the Board will continue to
review all options available to enhance shareholder value.



                                                               8 February 2001


ENQUIRIES:
City Centre Restaurants plc              Tel: [phone] (today)
Andrew Guy, Chief Executive

College Hill                             Tel: [phone]
Matthew Smallwood
Justine Warren