RTN.L Share News (RTN)

(Sharecast News) - The Restaurant Group said it burnt through £5.5m of cash during the November lockdown and that revised tiering restrictions would be "extremely challenging" in the first quarter of 2021.


The owner of Wagamama said the cash cost was £2m more than in the first Covid-19 lockdown because of rents payable under its company voluntary arrangement and higher employer furlough contributions. Working capital outflow and higher exceptional costs were £15m.

Restaurant Group said the government tiering plan starting on 19 December would be much worse, causing the closure of 103 branches compared with 64 under current measures and 37 when tiering was introduced in mid-October.

The number of restaurants in the toughest tier 3 has risen to 142 from eight in October and 80 under current measures. Restaurant Group shares fell 4.3% to 64.45p at 09:41 GMT.

"The mix of locations impacted across the tiers will continue to evolve, but if UK tiering allocations were to remain the same as currently in place throughout the first quarter of 2021, this will have a significant adverse impact on the group, and indeed the wider hospitality sector," the company said.

More than two-thirds of England faces winter under the toughest Covid-19 restrictions after the government put much of the south and east into tier 3 on Thursday. In a review of coronavirus infection rates the government said cases were rising across almost all of England.

Restaurant Group said it expected a strong recovery when customer activity starts to return to normal.

"Whilst the tiering restrictions make the outlook for the first quarter of 2021 extremely challenging, the board is encouraged by the welcome news of the Covid-19 vaccine being rolled out in the first half of next year," Restaurant Group said. "The board believes the group is well positioned to benefit from a sustained removal of restrictions given its previous strong trading performance following the first lockdown."