The restaurant group behind Wildwood and dim t is looking for a fresh start... and it is coming with new faces, new money, and a bold plan to revive growth, according to Cavendish.
After years of firefighting and underinvestment, Tasty PLC (AIM:TAST) is drawing a line under the past and rebranding itself as Bow Street Group.
The new name comes alongside a conditional £10.3m fundraising, with the bulk earmarked for upgrading tired sites, investing in technology, and snapping up other restaurant brands.
The scale of the transformation is striking: the group’s estate has shrunk from 54 restaurants a year ago to 32 today, with management “well positioned to benefit from refreshed leadership and a strengthened balance sheet”.
Cavendish’s note points to the arrival of David Page and Nick Wong, two industry heavyweights with a track record of building and selling restaurant businesses: PizzaExpress, Franco Manca, and Gourmet Burger Kitchen among them.
They are putting their own money in, committing £1.3m to the fundraising, and are promising a hands-on approach to both running and reshaping the business.
The strategy boils down to three main ingredients.
First, the company wants to acquire and scale up smaller restaurant groups. Page and Wong have a playbook here: buy quality brands with growth potential, roll out new sites, and eventually sell on, as they did with Fulham Shore where early investors saw a 700% return.
Second, Tasty will invest £3m in a rolling programme of refurbishments. ranging from quick facelifts to full overhauls, to bring its existing restaurants up to scratch.
Third, a further £1m will go into new technology, including an upgrade to the company’s point-of-sale systems and smarter tools for everything from rostering to energy use.
It is not just about a paint job and new tech. Cavendish notes that years of low investment have left the group’s brands with ground to make up.
Management is targeting operational improvement and looking at the menu, where prices have not kept pace with rising costs; a sign that there could be some headroom on margins.
On the numbers, Cavendish has trimmed its earnings forecasts for the coming year to reflect the costs of boardroom change, temporary closures during refurbishments, and what it calls “subdued, but recently stabilised, trading.”
Revenue is set to fall from £36.6m last year to £31.5m, with adjusted EBITDA also down, from £3.6m to £2.3m. But the broker expects the group to return to profit by 2027, with any acquisitions providing potential further upside.
Cavendish has reset its 12-month price target to 1.1p, suggesting an 83% uplift from today’s level, and describes the opportunity as early-stage but high-growth.
There are no promises, but as Cavendish puts it, Tast, soon to be Bow Street, is “far better positioned to deliver value over the medium term” with experienced hands now at the wheel.