The Restaurant Group PLC (LON:RTN) said its subsidiary Wagamama posted a 21% drop in revenue in the quarter to September 27.
However, the Asian food restaurant chain said UK like-for-like sales were up 7% in the same quarter thanks to customer initiatives implemented together with the Government’s ‘Eat Out To Help Out’ scheme operating throughout August.
READ: Restaurant Group serves up big loss but September sales impress
Adjusted underlying earnings (EBITDA), however, increased to £18mln in the quarter after the group renegotiated rent deals.
Looking at the year to date, UK revenue slumped 37% to £158mln as strong performance in the first quarter was hit by closures after COVID-19 hit, with adjusted EBITDA down to £20mln.
Wagamama’s chief executive Emma Woods said in a release the third quarter “was the last point we were able to trade in any sense normally and provides real confidence that the business can return to market-leading performance when restrictions are again lifted”.
Analysts at Liberum noted that Wagamama plans three new openings in the fourth quarter, including a new delivery kitchen in Balham, though some airport and certain city centre locations remain closed.
“The business has undergone major transformation during Covid, jettisoning onerous leases and refocussing the business towards higher quality Wagamama and rural gastro pubs (80%),” they commented.
Shares in Restaurant Group shed 6% to 67.9p on Wednesday at the opening bell.