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Sat 5th Dec 2020 - Exclusive: Nando’s raises £100m of new equity, invested £20m in making UK sites covid secure
Exclusive – Nando’s raises £100m of new equity, invested £20m in making UK sites covid secure: Nando’s has secured additional funding from its shareholders by raising £100m in new equity, as its latest accounts reveal the business invested £20m into making its UK sites covid secure. On the impact of covid-19, the company said it had taken “rapid and decisive” action to protect colleagues and customers and to preserve cash and liquidity, including a dramatic reduction in capex, salary reductions for senior management, reductions in rent, negotiating a pre-emptive waiver for its bank covenants and raising £100m in new equity from its parent company “as a prudent measure to strengthen the balance sheet”. The group has also drawn down most of the £125m revolving credit facility and overdraft available to the UK market under its financing facilities. Nando’s said it continued to have an “active dialogue with our landlords to seek mutually acceptable adoption of rent-free and rent-deferral periods”. The company closed 21 restaurants in Canada, “to reduce it cost base, where these restaurants were not generating positive cash flows”. It said the trading impact of covid-19 has been reflected in its future financial projections and this was the main factor in a non-cash, exceptional goodwill and asset impairment charge of £62.1m for the year to 23 February 2020. The company said current trading across its international footprint was mixed, but it remained confident in its long-term growth trajectory. It said this would be helped by an acceleration in its digital strategy, through its new delivery partnership with Deliveroo in the UK, and the ability to order at table via a Nando’s app. In the year to 23 February 2020, Nando’s Group Holdings, which includes its UK operation, saw revenue climb 4.2% to £1.095bn, driven by organic growth in its key markets. Operating profit fell 5.7% to £39.5m, driven by above-inflation increases in the National Living Wage (NLW) in the UK and continued investment in the group’s international business. Pre-tax loss was £99.4m (2019: £25.2m). Capital investment during the year stood at £97.4m, (2019: £87.9m), as the business opened 48 new restaurants, maintained its existing estate and invested in new technology. In the UK, revenue for the period increased 2.8% to £801.5m, with pre-tax profit down from £96m to £70.4m, driven by a £3.5m impairment charge in the year and the ongoing above-inflation increases in the NLW. The number of UK restaurants increased from 410 to 434, with all delivering “favourable results” in the period. In the UK, as well as the investment into safety measures, it also decided to pass on the government’s VAT reduction to customers. Nando’s also donated 54,000 free meals to NHS workers during the pandemic. During the year, the company’s UK operation became the first restaurant group in Europe to adopt approved science-based targets to further reduce carbon emissions. It also signed the Better Chicken commitment, pledging higher standards of animal welfare to “ensure stronger, healthier chickens in our supply chain by 2026”. Rob Papps, group chief executive of Nando’s, said: “Nando’s had a robust financial year in line with expectations. Since the financial year end, the covid-19 pandemic has significantly impacted our trading and we have taken decisive action to protect our balance sheet. Throughout the crisis our priority has been to help our people and communities, and we are proud we have been able to donate more than one million meal to hospitals and emergency services across the world as part of our long-term community partnerships. While the current period remains extremely challenging, we remain confident in the long-term prospects for the business.”

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