REG - Restaurant Group PLC - Response to Oasis letter to TRG

RestaurantAnnouncement

16/02/2023 14:30

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RNS Number : 1935Q  Restaurant Group PLC  16 February 2023

The Restaurant Group plc

 

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

 

Response to Oasis letter to TRG

 

INTRODUCTION:

The Board of TRG notes the letter issued by Oasis Management Company Ltd
("Oasis") on 16 February 2023. The Board welcomes constructive input from all
shareholders that is supportive of the creation and delivery of long-term
sustainable shareholder value.

The Board is issuing this announcement to give context to the matters raised
by Oasis in the letter.

1.    OASIS'S PROPOSAL FOR GOVERNANCE REVIEW

The Board of TRG notes Oasis's request for a review of "all options for
meaningful governance change".

Whilst Oasis states "they have been engaging with TRG for several years", our
Chairman met Oasis face-to-face for the first time in December 2022.

At this meeting, Oasis requested a seat on the TRG Board and a strategic
review to be conducted by an "independent bank".  This request was made
without Oasis giving indication of strategic ideas that should be examined by
the Board.

The Board was already, and continues to, review the Group's strategic options.
The Board concluded that this review should not be disrupted by Oasis'
suggestion of an additional process.

The Board therefore decided it would not be in the interest of our other
shareholders to grant Oasis a Board seat.

2.    OASIS'S SHAREHOLDING HISTORY

Oasis have used various financial instruments to hold exposure to TRG stock,
which makes it difficult to establish full disclosure of their holding
history.  Based on statements from Oasis and regular share register analyses,
it appears that:

·    Oasis disclosed a holding of c.2% of TRG stock in November 2020

·    Oasis then exited their holding

·    Oasis re-entered at some point in the first half of 2022 with a
holding of c.2%

·    Oasis notified TRG of an increase to c.5% in November 2022

·    Oasis's letter published today states they now own c.6.5%

·    Their trading history contrasts with a number of our major
shareholders, many of whom have been consistent long-term holders

 

 

3.    THE GROUP'S OPERATING PERFORMANCE HAS BEEN RESILIENT

The COVID global health pandemic and the current cost-of-living crisis have
created huge challenges for the UK Hospitality industry and this has been
reflected in TRG's share price. However swift and decisive management actions
taken during COVID were viewed as having successfully guided TRG through an
extremely challenging period.

The operational performance of TRG since COVID has also been strong when
compared to the wider UK Casual Dining sector (the majority of which is
privately owned):

·    Wagamama has continued to trade extremely well over the past three
years as indicated by its consistent market outperformance on sales and
leading customer ratings

·    Our Pubs business ("Brunning & Price") has delivered exceptional
market out-performance on sales and consistently strong customer ratings

·    Our Leisure business has been carefully restructured to maximise
cashflow

·    Our Concessions business has been successfully re-sized and is well
placed to benefit from strong earnings growth as air travel continues to
recover in 2023 and 2024

In addition to this resilient operating performance, TRG announced in December
2022 a long-term debt re-financing for the next four years with flexible
covenant arrangements and the ability to make further repayments as
appropriate.  This is hugely important in a casual dining sector where debt
financing has proved difficult to achieve since COVID.

 

CONCLUSION

·    The TRG Board always welcomes constructive dialogue with our
shareholders and will continue to engage with Oasis along with our entire
shareholder base with the common goal of delivering shareholder value

·    The Board continues to examine options to ensure that the strength of
the Group's operating performance generates shareholder value

·    TRG looks forward to announcing our full year results on 8 March
2023. This will provide an opportunity to update shareholders on 2022 results,
current trading and our medium-term strategy

·    TRG's management team will be meeting with our major shareholders
following the results in March and our Chairman will be offering major
shareholders the usual opportunity to meet prior to our AGM in May

 

 

 

 

 

 

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 410 restaurants and
pub restaurants throughout the UK as at 16 February 2023. 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 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.

 

3.   The Group's next scheduled update is the full-year results announcement
on 8 March 2023.

 

 

 

 

 

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