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Restaurant Group plans to re-open 90% of branches by the end of September

The Wagamama owner said it does not expect to re-open the remaining 10% of its outlets this year, reflecting locations where footfall is expected to remain “considerably weak”, primarily in airports

Restaurant Group PLC - Restaurant Group plans to reopen 90% of branches by end of September

The Restaurant Group PLC (LON:RTN) has said it is aiming to have 90% of its estate open by the end of September as it begins to slowly emerge from the coronavirus pandemic lockdown following a relaxation government guidelines.

The owner of Wagamama said it is aiming to have 25% of its total estate open by the end of July, rising to 60% at the end of August, and 90% in September. The company said it does not expect to re-open the remaining 10% of its outlets this year, reflecting locations where footfall is expected to remain “considerably weak”, primarily in airports.

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The company also said its has accessed £50mln from the government’s Coronavirus Large Business Interruption Loan Scheme (CLBILS) and also agreed amendments to a revolving credit facility with its lenders, adding £10mln to its debt facilities overall.

Executive and non-executive directors have also volunteered to take a 20% pay cut while the company continues to access the Coronavirus Job Retention Scheme, following a 40% cut from April 1.

In a note on Friday, analysts at Peel Hunt retained their ‘buy’ rating and 100p target price on the group, saying they expected that the company “should emerge from [coronavirus] intact, with a much higher quality estate and less competition”.

The broker also said that while they were cutting their 2020 revenues forecasts for the company by 10%, they expected that the impact of the reopening “should be partially offset” by the recently announced VAT cut to 5% from 20% for hospitality and accommodation products.

“The short-term outlook is uncertain, but the shares offer attractive value on a two-year basis, in our view”, Peel Hunt said.

Despite a positive start, the company's shares turned down in mid-morning trading and were 9.3% lower at 48.5p.

--Adds broker comment and updates share price--

Quick facts: Restaurant Group PLC

Price: 53.65 GBX

LSE:RTN
Market: LSE
Market Cap: £316.43 m
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