24 May 2022 07:00
The Restaurant Group plc
The Restaurant Group plc ("Group" or "TRG")
AGM Trading Update
TRG provides an update today for the Group's year-to-date trading performance comprising the 19 weeks ending 15 May 2022 ("YTD").
Key Highlights:
· Continued strong trading performance across the Group YTD
· Good progress on new site pipeline in Wagamama and Pubs
· Concessions recovery accelerating with total FY22 sales anticipated to be at least £100m
· Expected levels of food and drink inflation at 9-10% for FY22, vs previous 5%+
· Cash headroom3 in excess of £220m and a c.£6m reduction in net debt since year-end
YTD FY22 TRG Like-for-like ("LFL") sales (%) vs. 2019 comparables:
Group trading continues to be strong year-to-date, driven by continued demand for TRG brands and their ability to out-perform the market:
Q1* | Q2** to date | YTD |
| YTD market1 outperformance |
|
| |
Wagamama | +18% | +11% | +15% | +9% | |||
Pubs | +12% | +6% | +10% | +11% | |||
Leisure | +8% | +4% | +6% | In line | |||
Concessions | (26%) | (11%) | (20%) | +12% |
* Q1 refers to the 13 weeks to 03 April 2022 and includes the benefit from VAT being at 12.5%. This boosted LFL sales for the restaurant and pub sector by approximately 5 to 6%.
**Q2 refers to the six-week period to 15 May 2022, with VAT at 20%.
· Wagamama and Pubs performing well, with LFL2 sales outperforming the market by 9% and 11% respectively
· Leisure LFL sales in line with the market
· Concessions recovery accelerating, with LFL sales running at a decline of 11% in the last six weeks ("Q2"). On the back of this strong recovery, management now expects to have the entire Concessions estate of 41 sites trading by July 2022 and for total sales from this business to be at least £100m in FY22
Update on new site pipeline, cost inflation and net debt
New site pipeline: Good progress has been made on Wagamama new site expansion plans with at least eight restaurants and three delivery kitchens expected to open in FY22. Our new site pipeline for our Pubs business remains on track with three new pubs expected to open in FY22. The continued strength of trading of these businesses has reinforced our belief in their long-term roll-out potential.
General food & drink inflation: In-line with cost pressures experienced across the sector that have been exacerbated by the war in Ukraine, food and drink inflation is now expected to be around 9 to 10% in FY22, versus the 5%+ outlined at the time of Group's full-year results in March. TRG will continue to work with our supply chain partners to mitigate some of this increased impact, but this remains a volatile inflationary market.
Strong financial position: Given continued trading outperformance, the Group's financial position has improved, with net debt reducing by approximately £6m since the year-end and cash headroom3 in excess of £220m. The Group has flexibility both to invest in growing the business and reducing leverage over the medium-term.
Outlook
Management's current expectations for FY22 remain unchanged, with continued robust trading in our Wagamama and Pubs businesses and the stronger recovery in Concession sales offsetting the increased food and drink inflationary impact in FY22.
1Market refers to Coffer Peach tracker for restaurants (Wagamama and Leisure benchmark) and Coffer Peach tracker for pub restaurants (TRG Pubs benchmark). UK air passenger growth used as market benchmark for Concessions.
2 Like-for-like sales versus 2019 comparable.
3 Cash headroom position as at 1st May 2022 . Current facilities subject to minimum liquidity covenant of £40m.
Enquiries:
The Restaurant Group plc Andy Hornby, Chief Executive Officer Kirk Davis, Chief Financial Officer Umer Usman, Investor Relations
| 020 3117 5001 |
MHP Communications Oliver Hughes Simon Hockridge | 020 3128 8789/8742 |
Notes:
1. The Restaurant Group plc operates approximately 400 restaurants and pub restaurants throughout the UK as at 24 May 2022. Its principal trading brands are Wagamama, Frankie & Benny's and Brunning & Price. It also operates a multi-brand Concessions business which trades principally in UK airports. In addition, the Wagamama business has a 20% stake in a JV operating five Wagamama restaurants in the US and over 50 franchise restaurants operating across a number of territories.
2. Statements made in this announcement that look forward in time or that express management's beliefs, expectations or estimates regarding future occurrences are "forward-looking statements" statements and reflect the Group's current expectations concerning future events. Actual results may differ materially from current expectations or historical results.
3. The Group's next update is expected to be the interim results announcement in September 2022.