Restaurant Group PLC Trading Update (9836X)
02 May 2023 - 4:00PM
UK Regulatory
TIDMRTN
RNS Number : 9836X
Restaurant Group PLC
02 May 2023
The Restaurant Group plc
The Restaurant Group plc ("Group" or "TRG")
Encouraging trading momentum through the first four months of
the year
TRG today provides a trading update for the first four months of
the financial year :
-- Current trading continues to be very encouraging
-- Good progress on cost saving initiatives delivering c.GBP5m
of incremental cost savings on an annualised basis
-- The combination of current trading and incremental cost
savings achieved provides confidence that TRG is tracking ahead of
management expectations on its medium-term margin accretion and
deleveraging plans
Very encouraging trading momentum continues into the second
quarter
Year To Date (YTD) LFL sales (%) vs 2022 comparable split by
quarter
Q1 Total Q1 Total Q2 to date
LFL sales LFL sales Total LFL
"Excl. VAT sales
benefit"
(illustrative)
---------------- -------------
13 weeks 13 weeks 4 weeks
to 2 April to 2 April to 30 April
2023 2023 2023
---------------- -------------
Wagamama +2% +9% +9%
------------ ---------------- -------------
Pubs +5% +10% +8%
------------ ---------------- -------------
Leisure (4)% +2% (1)%
------------ ---------------- -------------
Concessions +37% +44% +20%
------------ ---------------- -------------
VAT benefit boosted LFL sales by approximately 5 to 7% for the
restaurant and pub sector in Q1 2022 (13 weeks to 3 April 2022)
- Wagamama and Pubs have both continued to deliver strong
trading, demonstrating the quality offerings and brand strength of
both propositions
- TRG is accelerating the previously announced rationalisation
plan for the Leisure business which will further improve cash
generation in the second half of FY 23
- The exceptionally strong Concessions LFL sales are in part due
to the 2022 comparative when air passenger volumes were impacted by
Omicron. However, very encouragingly, Concessions LFL sales are up
5% on 2019 (year-to-date) and up 10% on 2019 in Q2.
Dine-in trends have also been particularly strong
Year To Date ("YTD") LFL sales (%) vs 2022 comparable for the 17
weeks ended 30 April
TRG Division Total Delivery and Dine-in Dine-in LFL
YTD LFL takeaway LFL LFL sales sales VAT Adjusted
sales sales
-------------- ----------- --------------------
Wagamama +4% (13)% +10% +15%
--------- -------------- ----------- --------------------
Pubs +6% n/a +6% +10%
--------- -------------- ----------- --------------------
Leisure (3)% (14)% (1)% +3%
--------- -------------- ----------- --------------------
Concessions +31% n/a +31% +36%
--------- -------------- ----------- --------------------
The Group intends to provide enhanced segmental financial
disclosure for all four divisions at its interim results in
September.
Strong progress made in three-year margin accretion plan
Through proactive management actions across the cost base the
Group has been able to deliver c.GBP5m of incremental annualised
cost savings. The Group expects to benefit from approximately 70%
of the c.GBP5m of annualised cost savings in FY23, with the full
benefit flowing through from FY24 onwards.
As part of the previously announced Leisure estate
rationalisation plan, the Group will now close 23 sites in its
Leisure estate at the end of May 2023, having successfully
negotiated a number of early exits.
Current favourable UK property market dynamics are providing
further additional opportunities for new Wagamama sites on
attractive rent terms with good incentives. The Group will
accelerate the expansion of Wagamama restaurants and now anticipate
seven to eight new openings in FY24 (versus five planned
previously), capitalising on the favourable property market
dynamics.
Outlook
-- Current trading continues to be very encouraging
-- The Group is delivering c.GBP5m of incremental annualised cost savings
-- This combination of encouraging current trading and
incremental cost savings provides confidence that TRG is tracking
ahead of management expectations on its medium-term margin
accretion and deleveraging plans
TRG is pleased with the early progress in executing the plan to
deliver significant EBITDA(1) margin accretion over a three-year
time horizon(2) and the Board continues to consider long term
strategic options .
(1) Pre IFRS 16 Adjustment and exceptional charges
(2) FY25 year-end run-rate
Enquiries:
The Restaurant Group plc
Andy Hornby, Chief Executive
Officer
Kirk Davis, Chief Financial
Officer
Umer Usman, Investor Relations 020 3117 5001
MHP Communications
Oliver Hughes
Simon Hockridge 020 3128 8789/8742
Notes:
1. The Restaurant Group plc operates approximately 410
restaurants and pub restaurants throughout the UK as at 02 May
2023. Its principal trading brands are Wagamama, Brunning &
Price and Frankie & Benny's. It also operates a multi-brand
Concessions business which trades principally in UK airports. In
addition, the Wagamama business has a 20% stake in a JV operating
seven Wagamama restaurants in the US and over 50 franchise
restaurants operating across a number of territories.
2. Statements made in this announcement that look forward in
time or that express management's beliefs, expectations or
estimates regarding future occurrences are "forward-looking
statements" statements and reflect the Group's current expectations
concerning future events. Actual results may differ materially from
current expectations or historical results.
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END
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