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Hostmore plc
AGM Trading Update
7 June 2023
In conjunction with today's Annual General Meeting of shareholders, Hostmore plc, together with its subsidiaries, being the "Group", announces an update on trading for the 22 weeks ended 4 June 2023.
Like-for-like ("LFL") revenue and total revenue for the first 22 weeks of the year, adjusted for the variance in the VAT rate on food sales between FY22 and FY23, remain broadly consistent with the revenue performance for the first 16 weeks of the year announced on 28 April 2023:
| First 16 weeks | First 22 weeks |
LFL Revenue | (1%) | (3%) |
Total Revenue | +2% | (1%) |
The cost reduction initiatives announced on 28 April and 2 May 2023 are benefitting EBITDA in line with the quantums and timings as previously communicated. Further opportunities for savings are being evaluated and the details thereof will be announced following their implementation.
The previously announced utilities hedging programme commenced near the end of May 2023. Commodity spot prices have continued to decline and our decision to delay entering the hedging market has benefited the business with the locked-in rates being about 9%, or £1m, lower for the full year FY23 than expected on 28 April 2023. We have not hedged any of our remaining FY23 gas usage yet and 46% of our remaining electricity usage remains unhedged. We intend to begin hedging FY24 usage in due course.
Pleasingly, the Team's focus on quality, relevance and simplicity continues to deliver a significant improvement in the Guest Opinion Score for TGI Fridays. This has increased from 68 at December 2021, to 74 at December 2022, 80 at March 2023 and 83 at 4 June 2023.
In line with the revised capital allocation policy announced on 28 April 2023, the Board's focus remains on cash flow generation to repay Group borrowings, following which there will be an evaluation of shareholder distributions.
Gavin Manson, Hostmore plc's Chairman, commented:
"The ongoing loyalty of our guests is welcome. I am extremely grateful to all our colleagues for their continued hard work and commitment, which has resulted in a further improvement in the Guest Opinion Scores for TGI Fridays. This is a great cornerstone to build upon. Our focus continues to be on implementing high ROI organic growth initiatives and extending the lifetime value of our guests by adding further to the guest experience through our three pillars of quality, relevance and simplicity. This is expected to increase the number of annual repeat visits by our customers.
With the revision to our capital allocation policy, to prioritise debt repayment and shareholder distributions, I am confident that this will ensure a reduction in net debt and an ongoing improvement in profitability.
As previously announced, I step down from the Board today to focus on my executive commitment elsewhere. I am delighted that, as previously announced, Stephen Welker will step up to become the Chairman and Julie McEwan and Helena Feltham will join the Board at the conclusion of the Annual General Meeting later today. I am confident that the leadership of the Group is in secure hands. I wish everyone at Hostmore every success for the future."
ENDS
ENQUIRIES
Hostmore plc
Alan Clark, Chief Financial Officer
Email: enquiries@hostmoregroup.com
+44 330 460 5588
Dentons Global Advisors
Jonathon Brill / James Styles
Email: Hostmore@dentonsglobaladvisors.com
+44 (0)20 7664 5095