REG - Restaurant Group PLC - AGM Trading Update

RestaurantAnnouncement

24/05/2022 07:00

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RNS Number : 4887M  Restaurant Group PLC  24 May 2022

The Restaurant Group plc

 

The Restaurant Group plc ("Group" or "TRG")

 

AGM Trading Update

 

TRG provides an update today for the Group's year-to-date trading performance
comprising the 19 weeks ending 15 May 2022 ("YTD").

Key Highlights:

·    Continued strong trading performance across the Group YTD

·    Good progress on new site pipeline in Wagamama and Pubs

·    Concessions recovery accelerating with total FY22 sales anticipated
to be at least £100m

·    Expected levels of food and drink inflation at 9-10% for FY22, vs
previous 5%+

·    Cash headroom(3) in excess of £220m and a c.£6m reduction in net
debt since year-end

 

YTD FY22 TRG Like-for-like ("LFL") sales (%) vs. 2019 comparables:

 

Group trading continues to be strong year-to-date, driven by continued demand
for TRG brands and their ability to out-perform the market:

              Q1(*)  Q2(**) to date  YTD        YTD market(1) outperformance
 Wagamama     +18%   +11%            +15%       +9%
 Pubs         +12%   +6%             +10%       +11%
 Leisure      +8%    +4%             +6%        In line
 Concessions  (26%)  (11%)           (20%)      +12%

 

* Q1 refers to the 13 weeks to 03 April 2022 and includes the benefit from VAT
being at 12.5%. This boosted LFL sales for the restaurant and pub sector by
approximately 5 to 6%.

**Q2 refers to the six-week period to 15 May 2022, with VAT at 20%.

·    Wagamama and Pubs performing well, with LFL(2) sales outperforming
the market by 9% and 11% respectively

·    Leisure LFL sales in line with the market

·    Concessions recovery accelerating, with LFL sales running at a
decline of 11% in the last six weeks ("Q2").  On the back of this strong
recovery, management now expects to have the entire Concessions estate of 41
sites trading by July 2022 and for total sales from this business to be at
least £100m in FY22

 

 

 

Update on new site pipeline, cost inflation and net debt

New site pipeline: Good progress has been made on Wagamama new site expansion
plans with at least eight restaurants and three delivery kitchens expected to
open in FY22.   Our new site pipeline for our Pubs business remains on track
with three new pubs expected to open in FY22.  The continued strength of
trading of these businesses has reinforced our belief in their long-term
roll-out potential.

 

General food & drink inflation: In-line with cost pressures experienced
across the sector that have been exacerbated by the war in Ukraine, food and
drink inflation is now expected to be around 9 to 10% in FY22, versus the 5%+
outlined at the time of Group's full-year results in March.  TRG will
continue to work with our supply chain partners to mitigate some of this
increased impact, but this remains a volatile inflationary market.

 

Strong financial position: Given continued trading outperformance, the Group's
financial position has improved, with net debt reducing by approximately £6m
since the year-end and cash headroom(3) in excess of £220m.  The Group has
flexibility both to invest in growing the business and reducing leverage over
the medium-term.

 

Outlook

Management's current expectations for FY22 remain unchanged, with continued
robust trading in our Wagamama and Pubs businesses and the stronger recovery
in Concession sales offsetting the increased food and drink inflationary
impact in FY22.

 

(1)Market refers to Coffer Peach tracker for restaurants (Wagamama and Leisure
benchmark) and Coffer Peach tracker for pub restaurants (TRG Pubs
benchmark).   UK air passenger growth used as market benchmark for
Concessions.

(2) Like-for-like sales versus 2019 comparable.

(3 ) Cash headroom position as at 1(st) May 2022 .  Current facilities
subject to minimum liquidity covenant of £40m.

 

Enquiries:

 The Restaurant Group plc                                    020 3117 5001

 Andy Hornby, Chief Executive Officer

 Kirk Davis, Chief Financial Officer

 Umer Usman, Investor Relations

 MHP Communications                                          020 3128 8789/8742

 Oliver Hughes

 Simon Hockridge

 

 

 

Notes:

 

 

1.   The Restaurant Group plc operates approximately 400 restaurants and
pub restaurants throughout the UK as at 24 May 2022. Its principal trading
brands are Wagamama, Frankie & Benny's and Brunning & Price.  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 five 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.

 

3.   The Group's next update is expected to be the interim results
announcement in September 2022.

 

 

 

 

 

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