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Tue 30th Jan 2018 - Sky News – owner of TGI Friday’s UK puts sale on menu
Sky News – owner of TGI Friday’s UK puts sale on menu: The British arm of TGI Friday’s is being put on the menu of prospective buyers amid a steep downturn that has hit much of the casual dining sector. Electra Private Equity is calling in City advisers to work on potential options for its ownership of the American-themed restaurant chain, reports Sky News. Sources said a sale was one option that would be explored by Electra, but it would also examine whether to use its financial firepower to acquire rival chains that had been hit by financial distress. The move underlines the travails of many of the UK’s best-known restaurant chains, with higher labour, property and commodity costs having a savage impact on their profitability. TGI Friday’s trades from more than 80 sites in the UK, and is said to have demonstrated a resilient financial performance, although Electra declined to provide further details. The business began life in New York in 1965, before arriving in Britain in the 1980s. Its UK operations have changed owners a number of times since – the last occasion being in 2014 when Electra acquired it in a £225m deal from two other private equity investors. Sources said they expected the chain to be sold rather than to act as a sector consolidator, even in an environment where many restaurant businesses are changing hands for distressed prices. TGI Friday’s has worked with Morgan Stanley on previous projects, although it was unclear whether it was acting on the latest process. Electra’s decision to examine options for the UK arm of TGI Friday’s comes just hours before Byron, the better burger brand, faces a crucial creditor vote to approve a financial restructuring. The chain has seen a downturn in trading performance in recent months amid broader pressure on the restaurant sector amid greater competition from high street and delivery-based rivals. Last summer, Handmade Burger Co collapsed into administration, while companies including The Restaurant Group have been forced to change their leadership teams in an effort to revive their fortunes. Prezzo is reported to have hired financial advisers to work on a restructuring. In its most recent accounts filed at Companies House, TGI Friday’s UK saw turnover increase 7.7% to £211,007,000 for the year ending 1 January 2017 compared with £193,545,000 the previous year. Ebitda grew 8.5% to £33.1m compared with £30.5m the year before. Pre-tax losses increased slightly to £12,568,000 compared with £12,473,000 the previous year.

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