Wagamama owner sees steep losses but cheers trading revival

Frankie & Benny’s and Wagamama owner The Restaurant Group has seen half-year losses nearly triple during the pandemic, but said trading has been “very encouraging” since sites reopened.

The group, which also owns a raft of pubs and brands including Brunning & Price, said the pandemic sent it slumping to a £234.7 million half-year loss for the six months to June 28 against losses of £78.8 million a year earlier.

It booked a £132.4 million charge for restructuring costs, having shut nearly 250 of its 653 sites and concessions.

The group has axed around 4,500 jobs during the pandemic after shutting sites as part of a company voluntary agreement with its landlords and creditors, while it also placed the Chiquito chain into administration.

But The Restaurant Group (TRG) said it was pleased with sales over the 11 weeks to September 20, with around 90% of its remaining 400 sites now open and trading boosted by the Government’s popular Eat Out to Help Out discount scheme.

Shares lifted 5% as it said Wagamama’s like-for-like sales grew 11% in the 11 week period, while its other sites in the leisure estate saw 4% growth and pubs notched up a 14% hike.

Its concessions – many of which are based in airports – remain under pressure, suffering a 58% plunge in like-for-like sales as passenger numbers have yet to recover.

The group is shutting more than half its concessions – closing up to 41 sites, which will leave it with between 30 and 35.

TRG said it continues to be cautious over the outlook given the “ongoing impact of pandemic and Government-imposed restrictions”.

Andy Hornby, chief executive of The Restaurant Group, said: “It has been an extraordinary and difficult period for the hospitality sector but one in which we have pulled together to achieve a great deal.”

He added: “Since reopening, I am genuinely pleased with the strength of our trading performance and would like to sincerely thank each and every one of our colleagues for their extraordinary efforts.

“Whilst the sector outlook is uncertain, and we are mindful of recent restrictions across the UK, we are confident that the actions we have taken provide us with strong foundations to emerge as one of the long-term winners.”

The results come amid mounting concerns over a proposed pay deal for Mr Hornby, with investor advisory firms flagging worries about plans to hand the boss a possible £787,500 shares windfall, which would take his total maximum potential 2020 pay to £1.3 million.

The group said his share bonus will only pay out in three years’ time, with half of the award subject to performance conditions.

Investors will vote on the executive pay plans on Thursday.

Harry Barnick, a leisure analyst at Third Bridge, said: “Investors will be taking a very close look at the proposed executive pay scheme and its potential fall out.

“After so many restaurant closures and redundancies, this is a very sensitive time for brands like Wagamama, Chiquitos and Frankie & Benny’s to get embroiled in a pay row.”