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The loss was caused by a write down of asset values. Underlying profit was reasonable albeit with reduced margins due to economic headwinds and they had free cash flow of circa £40m which was not bad. Wagamama is worth the current valuation if not more on it's own. I await Oasis's next move with interest!
I must say I was surprised at the extent of the loss in the trading update - I didn’t see it coming - if that is all emanating from non performing F&Bs Chqtos then there is, if not criticism, a fair case for the Exec to answer I’m not exiting such more quickly. I’m unsure whether to top up or not now.
Restaurant Group PLC (LSE:RTN) has “organic recovery potential” that’s according to Citigroup’s London-based analysts.
Citi, in a note today, stuck with a price target of 52p per share (current price: 38.42p) although revised down forecasts for the 2023/24 financial adjusting for margin guidance, following the Wagamama owner’s wider loss reported on Wednesday.
Decent business and not a bad investment at these prices. Fill your bottom drawer and wait for the cheque.
The link below to todays overview article in the times. (hope it works, I knocked the wall down!)
https://archive.is/20230309074825/https://www.thetimes.co.uk/article/restaurant-group-closures-fail-to-satisfy-market-bpt02s900
Sorry should have said "why he thinks the UK is failing".. because it isn't. Although the Media would like you to think that.
Roads are full / (good) restaurants are full / (good) pubs are full / you cant get a (good) tradesman for love or money / energy is coming down
What's not to like! ... Other than a lying and agenda driven gov and media to hoodwink you into living in fear, not unlike porky1946.
He's been had! and he's furious.
Filter on! Have you read his positive posts on other boards! and he wonders why UK is failing. it's professional whingers like him pull everyone down.
Your post is so funny Porsche you should go to Germany there are in recession you need to get out now instead of watching the BBC
Nurse !
Wagamama isn’t worth 500m. Company is drowning in debt and they overpaid x2 for Wagamama from private equity. Will end up back in the hands of PE who will buy the debt the debt at 50p in the pound and refloat waga in a few years, rinse and repeat. Brexit basket case U.K. in dire trouble, teeeminal decline, watch this space. As for this, shareholders will be wiped out I’m afraid.
Yeah it's turned from a recovery play to Take Over Speculation play. Still money to be made IMHO
Nothing that hasn’t been posted but it’s going to be interesting to hear about “adding that the company was reviewing its long-term strategic options”. Bloomberg reported yesterday that Irenic Capital are in talks with RTN. Interesting times.
https://www.reuters.com/world/uk/wagamama-owner-restaurant-group-posts-annual-loss-tough-leisure-market-2023-03-08/
@ME12345 I sold out too and bought more RR
08-Mar-23 Shore Capital Buy
Yeah just been chatting to other investors and the general consensus is a hostile take over and private equity asset strip . Probably in line with what Russ mould says below. Now what value the PE bidders put on the company is wet finger in the air. Id like to say 80p but judging on current sentiment they will probably get it for a good % less than that
Bottom line is the BOD have not been quick enough to shut down/ offload F&B and Chiquito, and have not been emboldened or vociferous enough in demonstrating this intent to the market. Since buying Wagamama this share should have been WAGA not RTN , regardless of how good they are at corporate finance they should have spotted this opportunity and done something about it.
I'll hang around for the sale at somewhere at around 15-20% below true value. I'll still make something, but no where near what I expected .
From an investor point of view, the main positive right now is that Oasis have gotten involved. The company is in dire need of a shake up - otherwise this will continue to drift. There's plenty of value here but it's going to take radical action to unlock it.
Russ Mould, investment director at AJ Bell, said: "Recent activist pressure on The Restaurant Group may well be dialled up after a sticky set of 2022 results from the Wagamama owner.
"The company is really suffering with rising costs across the board - on energy, ingredients and staffing.
"It's not alone and the company is still generating sales growth which is important, but that's unlikely to be enough for some of its detractors.
"Oasis Management and Irenic Capital Management are among the institutions pressing the company to make changes - including, reportedly, selling off its pub and travel concessions arms.
"The Restaurant Group is already announcing plans to close more sites in its leisure division - the Frankie & Benny's and Chiquito chains which offer generic Italian and Mexican food to a captive audience of shoppers and cinemagoers.
"However, the question may well be asked, why not spin off, sell off or in some way get rid of this part of the business entirely, along with the other bits, to focus on Wagamama which is clearly a restaurant brand with genuine appeal.
"Rename the business as Wagamama, clear out the rest, and you would have a streamlined and focused operation which might have more appeal to investors."
Not impressed sold out
Someone sees value!
Yes indeed .. My bad.
I'll need to wait for the asset strippers now
A prediction (guess) that has just been blown out the water with the RNS
Currently still worth less than the book value that is held in the accounts which has been reduced again due to the right of use assets on the leisure estate.
I actually think broadly the executive team are doing a solid job, but there is little visibility on profits per segment and how many more write downs there will be on the leisure estate. Or are they being overly pessimistic on the outlook which leads to an add back of the write-downs, which just leads to an increase in share price volatility (NB: If I've read it correctly the value of the pubs is being held at a lower value than that of the freehold valuation) which is magnifying the current downside.
Maybe intangibles/ goodwill impairment. Statutory number is meaningless.
The worrying thing here is the lfl growth in Wagamama of 2%. It’s all over for AH I’m afraid. He won’t survive these year end results. Very average. Should have dealt with Chiquito and F&B years ago. We still don’t know how much these two dog brands lose each year.
Looks ok until you see the following
· Statutory loss before tax of £86.8m on an IFRS 16 basis (2021: loss of £35.2m) 147% increase ? Why?
· Net debt of £185.7m on a pre IFRS 16 basis (2021: £171.6m), Net debt/EBITDA1 at 2.2x (2021: 2.1x).
It will all be about the corporate action in the short term
I am still a strong buyer around the 35p level