Rainbow Rare Earths Phalaborwa project shaping up to be one of the lowest cost producers globally. Watch the video here.
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April 26, 2023, 8:00 AM EDT
NEW YORK--(BUSINESS WIRE)--Irenic Capital Management LP (together with its affiliates, “Irenic” or “we”), a substantial shareholder of The Restaurant Group plc (LON: RTN) (“The Restaurant Group” or the “Company”), today issued the following statement in response to inquiries:
“Irenic intends to vote against the Remuneration Policy. We have already communicated this privately to Non-Executive Chairman Ken Hanna and Chief Executive Officer Andy Hornby. In place of the current compensation scheme, we have suggested the Board adopt a new plan that more closely links compensation to shareholder returns.
We believe Mr. Hornby is capable of unlocking the substantial value that exists at The Restaurant Group. But unfortunately, the current remuneration plan provides little incentive to do so. In fact, it does the opposite. Under the current remuneration plan, the only direct financial incentive for Mr. Hornby is to increase overall profits at the enterprise – irrespective of the capital employed to do so. This encourages ill-advised acquisitions (Barburrito) and provides a disincentive to make the hard but necessary decision to sell non-core assets – and use the proceeds to de-lever.
Ultimately, The Restaurant Group should own just Wagamama and focus its efforts on growing that business. We have urged Mr. Hanna and the Board to design a Remuneration Policy that encourages Mr. Hornby to get to this end-state as quickly as possible. Should the Remuneration Committee adopt such a policy in the future, we would support it.
The path forward at The Restaurant Group should be clear. Dispose non-core assets, de-lever, and grow Wagamama – a brand that has excellent unit economics and a substantial global runway. Performance of The Restaurant Group’s non-core assets has rebounded from the depths of COVID-19 and financing markets are open. There is no reason for further delay in an asset sale program. It is time to get on with it.”
Sounds reasonable enough to me.
The current group debt to asset ratio is getting better by the day, and there's future value in anything that makes a profit! And there are plenty of profit potential plays in RTN
(+ I'd seriously look at offloading B&P "when" the brand matures "and" the market improves)
What’s a worry for me is oasis buying 12% and the sp not changing.
What will it take to get this moving.
The lack of segmental reporting makes it hard to determine how much each division makes, it is clear from the annual report is that the leisure divison is the least profitable currently but the board expect similar returns to be made in the coming years hence further rationalisation of primarily F&B sites, thereafter all divisions are deemed comparable financially. That being the case, the strategy to sell of all but Waga and use funds to develop Waga further seems odd. Why sell the other divisions if broadly achieving the same profitability and ROCE seems daft. The other issue is why put all your eggs in one basket brand wise when you have a portfolio that caters for different segments of same the market allowing you to adapt to challenges in this sector, the clue is in the company name! The proposed change the incentive scheme may enhance shareholder value short term but likely to diminish longer term value. If they want a takeover then asset strip, then fine by me, as long as the price is right and it way north the current SP.
Happily exit around 100p (money off table) tho sense it could be worth much more with potential priced in.
Davde, I’m not sure but the transaction I would guess was off book (behind the scenes).