TGI Fridays-owner Hostmore PLC (LSE:MORE) dropped over 8% in trading on Tuesday after its festive trading failed to help it muster any sales growth for first half.
Like-for-like revenues lifted by 4% in the four weeks of December, but the uptick was unable to stimulate any year-on-year growth in the group’s six months to the end of 2023.
Management said the underwhelming festive trading period occurred because 65% of its estate is situated in retail parks or shopping centres, which they argued were operating at reduced hours, resulting in a 2% dent to December sales.
During the first six months of 2023, Hostmore saw its sales drop by 2%, highlighting the negative effect of the cost-of-living crisis on the restaurant industry.
Underlying profits reached £5.4 million, but the group has been undergoing restructuring actions, which, if all had been enacted, it believes would have increased this figure to £7.2 million.
Julie McEwan, chief executive officer, said: "We have continued making good progress in executing our turnaround strategy, through disciplined capital allocation and the delivery of further cost reductions.
“Our organic growth initiatives, implemented through a strong and motivated operational platform, have improved the financial outlook of the business and continue into 2024."
One key area of focus for the hospitality company is to reduce its net debt, which currently stands at £25.1 million, down from £31.3 million in July 2023.
Hostmore said it is working with existing and potentially new lenders as part of a refinancing process, which it will likely update investors on when it reports results in the second half of April.