Proactiveinvestors United Kingdom Restaurant Group PLC Proactiveinvestors United Kingdom Restaurant Group PLC RSS feed en Mon, 22 Jul 2019 07:08:47 +0100 Genera CMS (Proactiveinvestors) (Proactiveinvestors) <![CDATA[RNS press release - Director/PDMR Shareholding ]]> Fri, 12 Jul 2019 16:58:04 +0100 <![CDATA[RNS press release - Notice of Results ]]> Wed, 10 Jul 2019 07:00:03 +0100 <![CDATA[RNS press release - Holding(s) in Company ]]> Tue, 09 Jul 2019 09:35:28 +0100 <![CDATA[RNS press release - Start date of new CEO ]]> Thu, 30 May 2019 07:00:08 +0100 <![CDATA[RNS press release - Holding(s) in Company ]]> Fri, 17 May 2019 16:43:56 +0100 <![CDATA[RNS press release - Results of AGM ]]> Fri, 17 May 2019 15:04:18 +0100 <![CDATA[News - Restaurant Group sees sales jump on Wagamama outperformance, but shares reverse ]]> The Restaurant Group PLC (LON:RTN) reported increased sales for the first part of 2019 on Friday as it continued to reap the benefits of its Wagamama acquisition, although investors were still to be convinced as its shares reversed early gains.

In a trading update ahead of its AGM on Friday, the FTSE 250-listed firm - which also owns Frankie & Benny’s - said trading in the 19 weeks to 12 May had been in line with its expectations as like-for-like (LFL) sales increased 2.8% while overall sales jumped 57%.

READ: Shares in Wagamama owner Restaurant Group edge lower as Peel Hunt downgrades stance

RTN said the sales surge reflected “strong performances” from Wagamama, which had continued to “significantly outperform” in its core UK market, and from the company’s pubs business, which had consistently traded ahead of the pub restaurant sector.

The company acquired Wagamama in November last year in a controversial £550mln deal that saw nearly 40% of its voting shareholders oppose the move.

Meanwhile, the company said its concessions business had “traded well” and that it remained focused on optimising its leisure arm against what it said was a “declining market”.

Looking forward, RTN said it was “comfortable” with its performance so far in 2019 and would continue to focus on “realising the synergies from the Wagamama acquisition, executing on our multi-pronged growth strategy and optimising our Leisure business”.

In a note to clients, analysts at Peel Hunt reiterated their ‘hold’ rating and 145p price target on the stock, saying it was “fairly valued…given that we believe there is downward forecast risk due to the sector backdrop and tougher [comparatives] ahead”.

After rising in morning trading, however, Restaurant Group shares drifted 1.1% lower to 128.40p.

 -- Updates share price --

Fri, 17 May 2019 08:21:00 +0100
<![CDATA[RNS press release - AGM Statement ]]> Fri, 17 May 2019 07:00:02 +0100 <![CDATA[RNS press release - Holding(s) in Company ]]> Fri, 10 May 2019 17:04:38 +0100 <![CDATA[RNS press release - Holding(s) in Company ]]> Fri, 10 May 2019 13:34:41 +0100 <![CDATA[RNS press release - Holding(s) in Company ]]> Fri, 10 May 2019 09:33:06 +0100 <![CDATA[RNS press release - Holding(s) in Company ]]> Thu, 09 May 2019 16:46:09 +0100 <![CDATA[News - Shares in Wagamama owner Restaurant Group edge lower as Peel Hunt downgrades stance ]]> Wagamama owner Restaurant Group PLC (LON:RTN) shares are fairly valued following a jump in the price, Peel Hunt said as it downgraded its recommendation on the stock.

Peel Hunt cut its rating to ‘hold’ from ‘add’ but raised its target price to 145p from 135p.

The broker’s previous ‘add’ stance was on the basis that it thought the shares were cheap, the company has been rescued by shareholders in a rights issue last November and Wagamama should flatter like-for-like sales for “a while”.  

READ: Restaurant Group takes a punt on former HBOS and Coral boss as its new CEO

“However, following a bounce in the share price, Restaurant Group’s shares, on almost 7 x enterprise value/EBITDA December 2019, are now fairly valued in our view,” Peel Hunt said.

Peel Hunt pointed out that 2018 adjusted pre-tax profit would have fallen 24% without cost cuts as a weak performance in leisure and retail park brands offset strong growth in pubs and concessions.

The broker said shareholders have suffered but the rights issues, the halving of the dividend and the recent acquisition of Wagamama should enable earning to start growing.

For 2019, consensus forecasts are for a 2.5% increase in like-for-like sales. Peel Hunt said this leaves no room for Wagamama to slow.

“We estimate the company needs almost 2% like-for-like sales growth to cover just labour cost inflation, and even higher like-for-like sales to stop the labour ratio rising even higher.”

Restaurant Group, which also owns Frankie & Benny’s and Garfunkel’s, releases its first quarter trading update on May 17. Peel Hunt expects the release to be “reasonably positive”.

Earlier this month the company appointed former HBOS and Coral boss Andy Hornby as its new chief executive.

Peel Hunt said Hornby faces many challenges including slowing the labour ratio’s continual upward trajectory, executing the commitments management made at the time of the rights issue, maintaining Wagamama’s like-for-like growth and existing leisure/retail leases.

Around noon, shares fell 1.7% to 139p.

Wed, 08 May 2019 11:56:00 +0100
<![CDATA[RNS press release - Holding(s) in Company ]]> Tue, 07 May 2019 10:41:34 +0100 <![CDATA[RNS press release - Block listing Interim Review ]]> Fri, 03 May 2019 16:55:40 +0100 <![CDATA[News - Restaurant Group takes a punt on former HBOS and Coral boss as its new CEO ]]> Wagamama owner Restaurant Group PLC (LON:RTG) has taken a gamble on former HBOS and Coral boss Andy Hornby as its new chief executive.

Hornby will replace current boss Andy McCue, who announced back in February he would be stepping down due to “extenuating personal circumstances”.

No date has been set on the 52-year-old’s arrival just yet, with an announcement to be made in “due course”.

As soon as Hornby joins, his predecessor will step down.

READ: Wagamama off to a flyer as Restaurant Group LFL sales rise in opening months of 2019

“[Hornby] brings very relevant consumer, people and brand-led CEO credentials, with experience leading a multi-site retail business which is undergoing digital transformation,” said chairman Debbie Hewitt.

“[His] extensive retail background, proven hands-on operational expertise, and experience of integrating businesses position him well to provide the leadership required to deliver the next phase of our strategy.”

Hornby added: “This is a great business, with strong brands, committed colleagues and tremendous potential to grow.

“I recognise that this sector of the market faces considerable challenges, but The Restaurant Group has a set of casual dining and pub brands that offer significant potential.”

Hornby has an impressive CV.

In addition to his stints as chief executive of bookmaker Coral and banking giant HBOS, he has also headed up Alliance Boots, Halifax’s retail business, and Asda’s George clothing brand.

Since Ladbrokes Coral’s acquisition by GVC Holdings PLC (LON:GVC) last year, he has been co-chief operating officer of the £4bn gambling group.

Restaurant Group shares edged 0.4% to 145.5p.

Thu, 02 May 2019 08:10:00 +0100
<![CDATA[RNS press release - Appointment of new CEO ]]> Thu, 02 May 2019 07:00:05 +0100 <![CDATA[RNS press release - Holding(s) in Company ]]> Fri, 26 Apr 2019 14:51:23 +0100 <![CDATA[RNS press release - Notice of AGM and Publication of Annual Report ]]> Tue, 16 Apr 2019 14:11:33 +0100 <![CDATA[RNS press release - Director/PDMR Shareholding ]]> Mon, 08 Apr 2019 15:48:39 +0100 <![CDATA[RNS press release - Director Declaration ]]> Tue, 02 Apr 2019 16:46:18 +0100 <![CDATA[RNS press release - 2018 Final Dividend ]]> Fri, 22 Mar 2019 14:03:06 +0000 <![CDATA[News - Wagamama off to a flyer as Restaurant Group like-for-like sales rise in opening months of 2019 ]]> Frankie & Benny’s owner The Restaurant Group PLC (LON:RTN) has blamed the World Cup and the Great British weather for a slump in profits last year.

Total sales rose 1.0% in 2018 to £686.0mln (2017: £679.3mln), although that growth came entirely from the 42 new pubs and restaurants it opened in the year.

READ: TRG tumbles as CEO quits unexpectedly

Like-for-like sales, which strip out the impact of the new openings, dropped 2.0% year-on-year as people stayed at home during the Beast from the East, while during the hot summer months they opted for beer gardens and sports bars as England reached the semi-finals of the World Cup.

The fall in like-for-likes, coupled with soaring staff and purchasing costs and higher business rates and taxes, meant pre-tax profits more than halved to £13.9mln (2017: £28.2mln).

The restaurant made the “transformative” £550mln acquisition of Asian cuisine chain Wagamama – a move that surprised many in the City given the troubles facing UK pubs and restaurants.

Wagamama, which officially joined The Restaurant Group stable in December, enjoyed a strong start to the new year, with like-for-like sales surging 9.1% in the three months to the start of February.

Wagamama off to a flyer

For the group as a whole, like-for-like sales are up 2.8% so far this year compared with the opening few months.

Given that the UK retail and leisure industry was being battered by the Beast from the East this time last year, it is perhaps unsurprising that like-for-like sales have improved. Management itself had expected them to pick up.

But Wagamama is no doubt pulling its weight: like-for-likes are up 9.7% in its financial year-to-date and bosses think there are “clear opportunities” to grow those further in 2019.

‘Significant progress’

“We have made significant progress in 2018, acquiring a differentiated, high growth business in Wagamama, opening a record number of new sites in both our Pubs and Concessions businesses, and driving improved like-for-like sales momentum in the Leisure business throughout 2018,” said chief executive Andy McCue who shocked the Square Mile last month when he said he would be stepping down.

“We now have a business that is orientated strongly towards growth and we continue to focus on delivering shareholder value.”

Results ‘a sideshow’

“2018 results themselves can be regarded as somewhat of a sideshow given the acquisition at the back-end of the year,” wrote Shore Capital in a note to clients.

“The group’s strategy remains on track [and] synergy guidance from Wagamama remains unchanged at £22mln.”

“Like-for-like sales since the turn of the year is +2.8%, which is consistent with our full year expectations of 2-3% growth.

“Within this, we expect Wagamama LFL sales remain in the high single-digit implying flat to modest growth in the legacy TRG business, with Pubs/concessions positive and Leisure remaining modestly negative.”

But analysts at Peel Hunt disagreed, saying that the pick-up in like-for-likes would be “difficult to sustain”.

Shares surged 12.2% to 142p in early deals on Friday.

--Adds share price and analyst comment--

Fri, 15 Mar 2019 08:21:00 +0000
<![CDATA[RNS press release - Change of Director Responsibilities ]]> Fri, 15 Mar 2019 07:00:13 +0000 <![CDATA[RNS press release - Wagamama Q3 Bondholder Update ]]> Fri, 15 Mar 2019 07:00:10 +0000 <![CDATA[RNS press release - Final Results ]]> Fri, 15 Mar 2019 07:00:06 +0000 <![CDATA[News - Restaurant Group tumbles as CEO quits unexpectedly ]]> Restaurant Group PLC (LON:RTN) tumbled in late-morning trading Thursday after its chief executive, Andy McCue, unexpectedly announced his resignation citing “extenuating personal circumstances”.

The FTSE 250 group, which owns restaurant chains including Wagamama and Frankie & Benny’s, said it expected McCue to remain in post while a successor was found, adding that trading remained in line with expectations ahead of its results on 15 March.

READ: RBC initiates Restaurant Group at ‘outperform’ as Wagamama acquisition “materially improves” growth profile

"In recent years, we have achieved much in a challenging market. I'm confident The Restaurant Group is well positioned with the scale, talent and levers to drive profitable growth” McCue said in a statement.

“While I recognise that this decision is untimely, it is the right one for me and my family.”

Debbie Hewitt, Restaurant Group’s chairman, said: "Andy has brought a strong vision, developed a first-class team and laid the foundation of the Company's transformation. Whilst we are clearly disappointed that he will not be able to provide the long-term leadership for the business, we understand and respect the decision he has made purely on personal grounds."

Broker says move “a surprise”, queries influence of Wagamama acquisition and rights issue

In a note to clients, analysts at broker Liberum said that McCue’s resignation “comes as a surprise” given the acquisition of Wagamama last November and the fact that the group was in the middle of a “crucial stage of integration” to deliver £22mln in synergies, which would add more instability and risk.

RTN acquired Wagamama in a controversial £550mln deal that nearly 40% of shareholders voted against.

READ: The Restaurant Group gets shareholder approval for £550mln Wagamama takeover, although nearly 40% voted against

As McCue was instrumental in the acquisition, and a £315mln discounted rights issue that followed, Liberum said that the process may have “taken its toll” and contributed to his decision to resign.

“The timing of this announcement may also lead to speculation that a turnaround in the core business is still a long way off,” the broker added.

Shares were down 13.4% at 126.4p.

Thu, 14 Feb 2019 11:22:00 +0000
<![CDATA[RNS press release - Directorate Change ]]> Thu, 14 Feb 2019 07:00:11 +0000 <![CDATA[News - RBC initiates Restaurant Group at ‘outperform’ as Wagamama acquisition “materially improves” growth profile ]]> RBC has initiated coverage of Restaurant Group PLC (LON:RTN) with an ‘outperform’ rating and 200p target price, saying the group’s acquisition of Wagamama “materially improves” its growth profile.

In a note, analysts at the Canadian bank said over 80% of the FTSE 250 chain’s underlying earnings (EBITDA) was exposed to “growth segments of Wagamama, pubs & concessions”.

READ: Restaurant Group shares slide as sales dip in 2018

“Previously, investors would have paid 14x [price earnings ratio] for a business where 50% of the EBITDA was exposed to the challenged leisure operations given 57% of these sites are retail based. However, post acquisition, the stock trades at 9.6x 2020e P/E with significantly enhanced growth prospects and a 4% yield.”

The bank added that the acquisition had reduced RTN’s struggling leisure business to less than 20% of its EBITDA while also demonstrating Wagamama’s “high like for like sales growth with its leading market position in Asian food”.

Analysts also said that they expected “synergies and expertise in delivery” to generate £22mln of incremental EBITDA by 2021.

In late-morning, Restaurant Group shares were flat around 151.5p.

Thu, 31 Jan 2019 11:13:00 +0000
<![CDATA[News - Restaurant Group shares slide as sales dip in 2018 ]]> Restaurant Group PLC (LON:RTN) shares dropped in early deals Thursday after its like-for-like (LFL) sales dipped in 2018, however, profit guidance for the full year was reiterated.

The FTSE 250 owner of Frankie & Benny’s, Garfunkel’s, and (as of November) Wagamama said LFL sales for the year ended 30 December were down 2%, although this did not include one-week sales figures from Wagamama.

READ: Restaurant Group gets a boost from Wagamama’s latest numbers

Total sales, which did include numbers from the new acquisition, were up by 1%.

RG acquired Wagamama last year in a controversial £550mln deal that was approved by shareholders in November.

At the time, nearly 40% of those voting had opposed the deal, while analysts voiced concerns over both the additional debt and price paid for the Asian food chain.

READ: The Restaurant Group gets shareholder approval for £550mln Wagamama takeover, although nearly 40% voted against

The company said it had seen LFL sales growth since the World Cup in July with its pubs business trading ahead of the pub restaurant sector while its concessions segment had “traded strongly”.

RG added that it had opened a record number of 21 new pubs in 2018, inclusive of acquisitions, as well as 21 new concessions.

The leisure business had also shown improved LFL sales momentum, the company said, although added that it had been impacted by weaker cinema admissions in December.
RG said it expected adjusted pre-tax profits for the full year to be in line with current market expectations.

Andy McCue, chief executive, said 2018 had been a “pivotal year” for the group and that the newly enlarged business was “now orientated strongly towards growth with a number of exciting opportunities”.

“We are focused on executing on our multi-pronged growth strategy and plans for the site conversions and cost synergies are progressing well."

Commenting on the update, Helal Miah, investment research analyst at The Share Centre, said investors “should be pleased” that the group had delivered LFL sales growth since summer, adding that the acquisition of Wagamama was expected to “diversify its brand portfolio, enhance earnings and deliver material cost synergies”.

“For 2019, there will not be major sporting events to cause disruption to the same extent as last year but we can only have our fingers crossed with regards to the British weather. Hopefully, there will also be a defined outcome on the Brexit situation before too long, allowing consumers to feel more reassured about their future and begin to spend again.”

Shares were down 6.6% at 144.8p.

--Adds analyst comment and share price--

Thu, 24 Jan 2019 08:03:00 +0000
<![CDATA[RNS press release - Trading Update ]]> Thu, 24 Jan 2019 07:00:04 +0000 <![CDATA[RNS press release - Holding(s) in Company ]]> Thu, 17 Jan 2019 09:54:26 +0000 <![CDATA[RNS press release - Notice of Post-Close Trading Update ]]> Mon, 14 Jan 2019 07:00:04 +0000 <![CDATA[News - UBS ups Restaurant Group to ‘Neutral’, says business quality improved but risk increased ]]> UBS has upgraded Restaurant Group PLC (LON:RTN) to ‘Neutral’ from ‘Sell’ saying the firm’s business quality had improved following its acquisition of Wagamama but added that “risks have also increased”.

In a note, analysts at the Swiss bank said the FTSE 250 group’s acquisition of the Asian restaurant chain had increased its “quality and growth trajectory, with the brand now accounting for c.45% of EBIT in 2019E”.

READ: Restaurant Group gets a boost from Wagamama’s latest numbers

“Strong recent trading along with the benefits of delivery and recent refurbishments means we expect strong LFL to continue (5% for 2019E), with the opportunity for margin improvement given synergies and recent one-offs.”

However, the bank said “question marks” had arisen around the company’s debt burden following the acquisition, as well as the possibility that the Wagamama brand “is at its growth peak already”.

“In particular, we have concerns around the store roll-out potential given Wagamama is one of the largest UK brands by no. sites already. In addition, delivery already represents 12% of sales, and with this offered through Deliveroo, Wagamama doesn’t own the customer and therefore is at risk from growing competition.”

UBS also said it ongoing debt concerns around RTN’s other brands Frankie & Benny’s and Chiquito meant it was staying Neutral, while also cutting its target price to 155p from 172p and lowering earnings per share (EPS) forecasts for 2019 by 29% to reflect the integration of Wagamama.

READ: The Restaurant Group gets shareholder approval for £550mln Wagamama takeover, although nearly 40% voted against

“We believe risks for the group have increased alongside the opportunity, with 19E net debt forecast at 2.1x (4.6x lease adjusted) leaving little room for execution risks given the uncertain demand and cost outlook and ongoing issues in the existing business.”

The firm received approval for its £550mln takeover of Wagamama in November, however, the purchase was not without controversy as nearly 40% of those voting opposed the deal.

In mid-morning trading Thursday, Restaurant Group shares were down 2% at 156.7p.

Thu, 10 Jan 2019 10:21:00 +0000
<![CDATA[RNS press release - Holding(s) in Company ]]> Wed, 09 Jan 2019 15:48:26 +0000 <![CDATA[RNS press release - Holding(s) in Company ]]> Fri, 04 Jan 2019 15:00:55 +0000 <![CDATA[News - Restaurant Group gets a boost from Wagamama’s latest numbers ]]> Investors were tucking into Restaurant Group PLC (LON:RTN) as Wagamama, the latest addition to its portfolio of restaurant chains, brushed off the gloom lurking over the casual dining sector with its first-half results.

Restaurant Group completed its £559mln takeover of the Japanese restaurant chain at Christmas, having reached a deal with its former owners at the end of October.

READ: RTN gets Wagamama approval from shareholders (just)

In the first six months of its financial year – April to October – turnover jumped 13.7% to £178.9mln (H1 17: £157.4mln). Like-for-like sales, an important metric for retailers and restaurants, rose 12.0% in the period.

A higher tax bill and refurbishments to ten of its sites meant Wagamama was still loss-making, although the £4.0mln loss recorded this year was more than half what it posted for the same period a year ago (H1 17: loss of £8.2mln).

Excluding various one-off costs, underlying earnings (adjusted EBITDA) grew to £25.9mln, up from £23.5mln last year.

Much better than peers

It is an impressive performance, especially considering the struggles many of its peers have had to endure over the past couple of years, with the likes of Byron and Jamie’s Italian all having to shut stores.

Most of their issues have been caused by the fact that too many restaurants – a net 4,000 over the past four years – have opened in recent years which has given customers a wealth of options to choose from.

There is also the impact of weakening consumer spending, with Brexit, stagnant wage growth and above-target inflation all working to squeeze peoples’ pockets.

Wagamama’s showing is more notable given the fact the period includes the hot summer months and football World Cup, neither of which served as a boon for the industry.

'Well-prepared for next chapter'

“We want Wagamama to be special, both the bowl and the soul and so have continued to invest in our amazing teams, our vegan food and our customer service this quarter,” said chief executive Emma Woods.

“As a result, we have sustained our outperformance of the UK market. The business is well prepared for, and excited about the next stage of its development, with The Restaurant Group as our new owners.”

Restaurant Group investors, pleased with their firm’s new acquisition, helped to drive the share price 1.1% higher to 147.8p on Friday morning.

Fri, 04 Jan 2019 10:20:00 +0000
<![CDATA[RNS press release - Wagamama Q2 Bondholder Update ]]> Thu, 03 Jan 2019 14:47:55 +0000 <![CDATA[RNS press release - Holding(s) in Company ]]> Wed, 02 Jan 2019 07:00:06 +0000 <![CDATA[RNS press release - Completion Of The Acquisition Of Wagamama ]]> Mon, 24 Dec 2018 10:03:02 +0000 <![CDATA[RNS press release - Holding(s) in Company ]]> Tue, 18 Dec 2018 17:42:43 +0000 <![CDATA[RNS press release - Holding(s) in Company ]]> Tue, 18 Dec 2018 13:09:43 +0000 <![CDATA[RNS press release - Holding(s) in Company ]]> Mon, 17 Dec 2018 15:50:05 +0000 <![CDATA[RNS press release - Holding(s) in Company ]]> Mon, 17 Dec 2018 07:00:06 +0000 <![CDATA[RNS press release - Esure Group ]]> Fri, 14 Dec 2018 17:40:03 +0000 <![CDATA[RNS press release - RESULT OF RUMP PLACING ]]> Fri, 14 Dec 2018 12:18:37 +0000 <![CDATA[RNS press release - Results of Rights Issue ]]> Fri, 14 Dec 2018 07:00:03 +0000 <![CDATA[RNS press release - Holding(s) in Company ]]> Thu, 13 Dec 2018 14:18:20 +0000 <![CDATA[RNS press release - Holding(s) in Company ]]> Thu, 13 Dec 2018 09:33:15 +0000 <![CDATA[RNS press release - Holding(s) in Company ]]> Tue, 11 Dec 2018 16:51:26 +0000