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Wed 13th Sep 2017 - Wagamama reports 6.6% UK like-for-like sales increase in first quarter
Wagamama reports 6.6% UK like-for-like sales increase in first quarter: Wagamama has reported turnover increased 13.5% to £86.7m in the 16 weeks to 13 August, its first quarter of a new financial year. The UK saw 6.6% like-for-like sales growth. Adjusted Ebitda was up 2.5% in the first quarter to £12.4m from £12.1m in the first quarter of 2016/17, despite headwinds. Four new UK restaurants opened in the quarter – Manchester St Peter’s Square, Leeds White Rose, Bedford and Cheltenham.There has been one opening so far in the second quarter – Bracknell. One new US restaurant opened at Boston Seaport. Chief executive Jane Holbrook said: “We have continued to deliver strong like-for-like sales growth in the quarter and have widened the gap between us and our competition. We have now traded ahead of our peer group consistently for over three years. We have continued to invest in our estate with five owned restaurant openings and three franchise openings during the quarter and we’re well positioned with our pipeline for the rest of the year. We have grown our adjusted Ebitda year-on-year in the first quarter and continue to proactively manage the cost pressures facing the industry. We remain relatively cautious about the immediate outlook given the prevailing economic uncertainty, however we are confident in our ability to identify opportunities and manage through the challenges ahead.” The company added: “Turnover in the UK increased 12.5% to £83m in the first quarter of 2017/18 from £73.8m the year before. This was due to a 6.6% like-for-like sales increase and an increase in the number of restaurants from 118 open at the end of the first quarter of 2016/17 to 127 open at the end of the first quarter of 2017/18. Turnover in the US increased 52.6% (39.1% in US dollar terms) to £2.9m ($3.7m) in the first quarter of 2017/18 from £1.9m ($2.7m) the previous year, reflecting growth in like-for-like sales and the opening of two new restaurants in New York City and Boston. Turnover from its international franchised restaurants business line increased 14.3% to £0.8m in the first quarter of 2017/18 from £0.7m the previous year. Gross margin has increased from £32.7m in the first quarter of 2016/17 to £36.8m in the first quarter of 2017/18. The growth in the estate and the like-for-like sales growth were the primary causes of this increase. This further includes the impact of supply chain and National Living Wage cost increases. Administrative expenses before exceptional items increased 17.9% to £32.0m in the first quarter of 2017/18 from £27.2m the year before. This was primarily due to overhead costs and depreciation commensurate with the addition of new restaurants in addition to the increase in central overhead expenses, again reflecting the increase in estate size. This includes the impact of business rates increases.” 


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