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Tue 2nd May 2023 - Update: The Restaurant Group and Hostmore
The Restaurant Group reports trading ‘continues to be very encouraging’ with ‘dine-in trends strong’, closing 23 leisure sites in May and accelerating Wagamama expansion: The Restaurant Group (TRG) has reported trading “continues to be very encouraging” with “dine-in trends particularly strong”. TRG said as part of the previously announced leisure estate rationalisation plan, the group will now close 23 sites in its leisure estate at the end of May 2023, “having successfully negotiated a number of early exits”. It will also accelerate the expansion of Wagamama restaurants and now anticipate seven to eight new openings in FY24 versus five planned previously. The company reported Wagamama sales are up 9% year-on-year for the 4 weeks to 30 April 2023. The pubs business saw like-for-like sales in the period increase 8% while concessions were up 20%. Like-for-like sales in the leisure division were down 1%. Year to date like-for-like sales are up 4% at Wagamama, 6% in the pubs business and 31% in concessions. The leisure division has seen a 3% fall. Year-to-date delivery and takeaway like-for-like sales are down 13% at Wagamama and 14% in the leisure division. However, TRG said dine-in sales for the 17 weeks ended 30 April 2023 are up 10% at Wagamama (15% when adjusted for VAT) , 6% in pubs (10% on VAT adjusted basis) and 31% in concessions (36% on VAT adjusted basis). Leisure dine-in like-for-like sales were down 1% (up 3% when adjusted for VAT). TRG said good progress on its cost saving initiatives was delivering circa £5m of incremental cost savings on an annualised basis. It added the combination of current trading and incremental cost savings achieved “provides confidence that TRG is tracking ahead of management expectations on its medium-term margin accretion and deleveraging plans”. The group said it expects to benefit from approximately 70% of the circa £5m of annualised cost savings in FY23, with the full benefit flowing through from FY24 onwards. TRG said: “Wagamama and pubs have both continued to deliver strong trading, demonstrating the quality offerings and brand strength of both propositions. TRG is accelerating the previously announced rationalisation plan for the leisure business which will further improve cash generation in the second half of FY23. The exceptionally strong concessions like-for-like sales are in part due to the 2022 comparative when air passenger volumes were impacted by Omicron. However, very encouragingly, Concessions like-for-like sales are up 5% on 2019 (year-to-date) and up 10% on 2019 in the second quarter. The group intends to provide enhanced segmental financial disclosure for all four divisions at its interim results in September. Current favourable UK property market dynamics are providing further additional opportunities for new Wagamama sites on attractive rent terms with good incentives. The group will accelerate the expansion of Wagamama restaurants and now anticipate seven to eight new openings in FY24 (versus five planned previously), capitalising on the favourable property market dynamics. TRG is pleased with the early progress in executing the plan to deliver significant Ebitda margin accretion over a three-year time horizon and the board continues to consider long term strategic options.” Meanwhile, TRG has appointed Helen Keays as a non-executive director. She will join the company’s from 1 June 2023, and will become a member of the nomination and remuneration committees. She is currently a non-executive director and chair of the remuneration committee at soft drinks manufacturer Nichols, and until August 2020 was senior independent director at Domino’s Pizza Group. Prior to her lengthy non-executive career, she held positions as marketing director at Sears Financial Services and customer management director at Vodafone.

Number of experiential concepts to feature in the next edition of The New Openings Database, 4,000-word report included: A number of experiential concepts will feature in the next edition of The New Openings Database. The database will show the details of 90 newly announced site openings and upcoming launches for Premium subscribers when it is published on Friday, 5 May, at midday, including which company has opened a site or its plans to open one in the future. It will have details on what type of site it is and its location, and there will also be a website link to the businesses. The database is published on a monthly basis, and the next edition features boutique bowling company Lane7, led by Tim Wilks, which has opened a new site in Bath’s Saw Close, and a new site under its family entertainment centre concept, Level X, in Middlesbrough’s Captain Cook Square. Also added this month is Clays, the indoor interactive clay shooting experience concept, which opened its second site, in Canary Wharf’s West India Quay. Meanwhile, mini-golf bar and restaurant concept Par 59, which is led by football star Gareth Bale and Welsh independent entertainment brand The Depot, has opened a site in Bristol’s Millennium Promenade. Premium subscribers will also receive a 4,000-word report on the new additions to the database. Premium subscribers also receive access to four other databases: the Propel Multi-Site Database, produced in association with Virgate; the Propel Turnover & Profits Blue Book; the UK Food and Beverage Franchisor Database; and the Who’s Who of UK Food and Beverage. Companies can now have an unlimited number of people receive access to Propel Premium for a year for £995 plus VAT – whether they are an operator or a supplier. The single subscription rate is £495 plus VAT for operators and £595 plus VAT for suppliers. Email to upgrade your subscription. Premium subscribers are also to be given exclusive access to the recording and slides to Propel Multi-Club Conferences. Premium subscribers also receive their morning newsletter 11 hours early, at 7pm the evening before; regular video content and regular exclusive columns from Propel group editor Mark Wingett.

TGI Fridays parent announces further cost reduction programme to save £4.1m a year, appoints Julie McEwan permanently as CEO: Hostmore – the parent company of TGI Fridays and 63rd+1st – has announced an additional cost reduction to save £4.1m a year and appointed Julie McEwan permanently as chief executive. The cost reduction programme is in addition to the £1.8m of annualised savings announced by the company on Friday (28 April) in its full-year results. Hostmore stated: “Further to the FY 2022 results announcement on 28 April, Hostmore is announcing a further cost reduction programme resulting in £4.1m of annualised savings. The implementation of this additional cost reduction has utilised £0.3m of cash. The cost reduction announced today is in addition to the £1.8m of annualised savings disclosed in the results announcement, bringing the total aggregate cost reduction to £5.9m on an annualised basis and total cash implementation costs to £0.6m. Substantially all affected employees and service providers relating to this new cost reduction have now left the group, with the annualised savings beginning to accrue during the second quarter of 2023. Accordingly, these new reductions are expected to benefit FY2023 results by approximately £2.8m, with the full annualised saving to benefit FY 2024 results. In total, the two cost reduction actions are expected to benefit FY2023 results in aggregate by approximately £4.0m. These cost reduction measures have been identified as part of the board’s efforts to control costs and drive productivity at all levels of the organisation. The board continues to review all opportunities to improve the group’s financial results. The board is pleased to announce that, after conducting a wide ranging and thorough search, Julie McEwan has been appointed permanent chief executive of Hostmore effective immediately. Since 10 January 2023, Julie has been acting as the interim chief executive and was previously the chief operating officer since joining Hostmore in February 2022. Prior to joining Hostmore, Julie was at Big Table Group (previously Casual Dining Group), latterly as brand director of Las Iguanas. She has previously held management roles at Spirit Pub Company, Premier Inn, and Whitbread. Julie will also join the board as a director of the company at the conclusion of the upcoming annual general meeting on 7 June 2023. Julie’s remunerative package will be in accordance with the company’s remuneration policy and will be fully disclosed in next year’s directors’ remuneration report.” Chairman Gavin Manson said: “Julie has impressed the board immensely during her period as Interim chief executive and her positive impact is already being felt throughout the organisation. The board is pleased that Julie has accepted the permanent chief executive position and we look forward to working with her to deliver on our key objectives for the business.”

Three quarters of Brits planning staycation in 2023: Staycations could be worth £28bn to the economy in 2023, up from £15.5bn last year, with an estimated 40 million Britons planning at least one UK break. A report from Sykes Holiday Cottages found 75% of Britons would take a holiday in the UK this year, some planning three breaks. The company’s annual Staycation Index showed the extra bank holiday next Monday (8 May) for the coronation had boosted the market. The busy summer period will start earlier than ever as record numbers set off on UK breaks this month. The research, involving 2,000 UK adults, was carried out by OnePoll in February and March. Graham Donoghue, chief executive at Sykes Holiday Cottages, told The Times: “Local economies are sure to see a boost from holidaymakers this summer, with getaways closer to home topping many people’s holiday wish lists and Brits looking to spend £1,200 on average on their main UK break.” Destinations including Weymouth, Windermere and Keswick are among the most popular for May bookings. The Peak District, central Scotland and East Anglia are on the summer wish list.

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