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Fri 6th Dec 2019 - PizzaExpress owner buys back £72m of debt
PizzaExpress owner buys back £72m of debt: Hony Capital, the China-based owner of PizzaExpress, has bought back £72m of the company’s debt. Hony has acquired £71.9m of unsecured bonds at a price of 40p in the pound. The move comes as PizzaExpress struggles to repay £1.1bn of loans amid spiralling losses. Of these, £660m is owed to bondholders. The first tranche of senior bonds – amounting to £460m – is due to be repaid by August 2021, while the junior bonds – amounting to £200m – are due to be repaid by August 2022. Propel understands that while PizzaExpress sees Hony getting out its chequebook to buy back some of the debt as a positive move, it acknowledges there’s still a long way to go. Last month PizzaExpress reported like-for-like sales in the UK and Ireland fell 1.1% for the 13 weeks to 29 September 2019. Ebitda for the UK and Ireland business was £19.9m with margin at 17.9%, down 130 basis points. During the period three company-owned sites opened and one closed, leaving the UK and Ireland estate with 477 company-owned restaurants and five franchise outlets. PizzaExpress has continued to implement its FutureExpress refurbishment project, which has required £0.5m capital expenditure since 1 July in addition to regular maintenance capex to refurbish a further five sites. In total, the company has refurbished ten sites in 2019 as early results “continue to be positive”. PizzaExpress stated: “About 95% of our UK and Ireland restaurants are profitable and there are no plans for closures outside the normal course of business.” Hony bought PizzaExpress in 2014 for £900m despite growing concerns about overcrowding in the casual dining market. Last month ratings agency S&P projected PizzaExpress’ enterprise value at £342m, far less than its £1.1bn debt pile.


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