Restaurants

The Restaurant Group to close 90 restaurants by 2021

The parent company of Wagamama and Frankie and Benny’s, The Restaurant Group, has announced it is to close up to 90 restaurant sites by the end of next year.

The group said the closure will affect its ‘leisure portfolio’, which includes the Chiquito and Frankie and Benny’s sites, and follows the group closing 18 of its sites last year – eight of which were converted into Wagamama stores.

The news comes after The Restaurant Group reported a 2.7% increase in like-for-like sales, with total sales increasing by 56.4% to £1.07bn, compared with £13.9m in 2018.

The company also reported adjusted profit before tax of £74.5m, compared with £53.2m, as well as statutory losses before tax of £37.3m, compared with £13.9m in 2018.

Adjusted EBITDA increased to £136.7m, up from £87.9m in 2018.

Andy Hornby, TRG chief executive officer, said he was “particularly pleased” with the “continued and significant” progress made following the acquisition of Wagamama and the integration of the business into the group.

He said: “Our three growth businesses of Wagamama, Concessions and Pubs are all out-performing their respective markets and have clear potential for further growth. I am also acutely aware of the challenges facing our Leisure business and the wider casual dining sector.   

“It is therefore clear that our strategic priorities need to evolve in order to maximise shareholder value in the medium term.  Following extensive review we have defined three clear strategic priorities for the next two years: grow our Wagamama, concessions and pubs businesses; rationalise our leisure business; and accelerate our deleveraging profile.”

He added:“In order to support these strategic priorities, the Board has taken the decision to temporarily suspend the dividend.  This will allow us to continue investing in our three high growth businesses, whilst facilitating an acceleration of our Leisure estate rationalisation and reducing our net debt.”

“We have made an encouraging start to the new financial year with like-for-like sales up 5.3% for the first six weeks of 2020.”

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