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Morning Briefing for pub, restaurant and food wervice operators

Wed 10th May 2023 - Sky News: TRG wins biggest investor’s backing ahead of AGM
Sky News – TRG wins biggest investor’s backing ahead of AGM: The biggest shareholder in The Restaurant Group (TRG), the owner of Wagamama, has delivered a sizeable boost to its board by pledging its support ahead of a crucial annual meeting this month. Sky News reports that Columbia Threadneedle Investments, which owns 19% of TRG, has decided to vote in support of company resolutions at its AGM on 23 May. The decision to back chief executive Andy Hornby’s £792,000 pay package for last year comes after activist investor Oasis Management Company, which holds 12% of TRG, urged fellow shareholders to oppose it. Oasis has been embroiled in an increasingly bitter fight with TRG’s chairman, Ken Hanna, and his boardroom colleagues over its management and strategy. Hanna has rejected Oasis’s demands for a board seat and expressed continued confidence in Hornby. In a statement, Columbia Threadneedle said: “As a long-term shareholder in The Restaurant Group, we remain supportive of TRG’s board and management team, who have successfully navigated the exceptionally tough industry backdrop. The board continues to receive our support as they assess the best options to deliver long-term shareholder value.” Glass Lewis, the proxy adviser, has also recommended that TRG shareholders vote with Oasis, while the Investment Association’s voting advisory service has backed Hanna over Hornby’s pay. Last week, Hornby told Propel that TRG, which also owns Brunning & Price and Frankie & Benny’s, was “letting our trading do the talking” after coming under fire from activist shareholders. Shares of TRG climbed 14.3%, or 5.8p, to close at 46.30p last Tuesday (2 May) on the back of strong like-for-like sales growth in the first four months of its financial year and additional cost savings of £5m. Hornby said: “I think the phrase for today is we’re letting our trading do the talking. I think the numbers are clear, the reaction of our shares has been clear. We are letting the performance do the talking, particularly the performance of all of our businesses. You look at the way pubs and concessions are trading, we are letting our businesses do the talking.” Shares in TRG closed on today 7% higher at 51.2p, giving the company a market value of £366m. The performance of the shares came after a research note from analysts at Shore Capital which cited TRG’s “robust performance”. It said: “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 Restaurant Group features in the Propel Turnover & Profits Blue Book. Its turnover of £636,600,000 for the year to 2 January 2022 is the 15th highest in the database. The Blue Book ranks companies by turnover, profit and profit conversion, listing directors’ earnings for the past five years. 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.

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