Frankie & Benny owner nearly doubles revenue as removal of Covid curbs brings customers back en masse
- The Restaurant Group’s half-year turnover shot up 95% to £423.4 million
- It still made a statutory loss of £26.1m due to significant write-downs
- In addition to Frankie & Benny’s, the company owns Barburrito and Wagamama
Wagamama owner The Restaurant Group has said the easing of trade restrictions nearly doubled sales in the first half of the fiscal year.
The hospitality operator, who also owns the Barburrito and Frankie & Benny’s chains, told investors on Thursday that revenues rose 95 percent year-on-year to £423.4 million in the six months to 3 July.
With the exception of the concession arm, which was impacted by the decline in international travel following the emergence of the Omicron variant, all of the company’s divisions experienced healthy trading during the period.
Growth: Frankie & Benny’s owner The Restaurant Group revealed turnover rose 95 percent year-on-year to £423.4 million in the six months to 3 July
This allowed the company to report an adjusted profit of £10.2 million, compared to a loss of £19.9 million in the previous year when the branches could only be fully traded for seven weeks.
However, it made a statutory loss of £26.1 million as a result of significant write-downs related to worsening inflationary pressures and a troubled near-term economic outlook.
The Restaurant Group said utility costs were up £2million more than forecasted in the latest trade update in mid-May.
To curb future cost increases, it has covered all electricity and gas costs through 2024, a measure the company predicts will save between £40m and £70m over the next two years.
It has also bought interest caps on £125m of gross debt and £89m of a loan through November 2025, making it less vulnerable to potential base rate hikes.
Precautions: To avoid future cost increases, The Restaurant Group has covered all electricity and gas costs through 2024, saving a potential £70million
“We have taken decisive management action to mitigate the impact of cost pressures in the sector,” said CEO Andy Hornby.
“While the uncertain consumer environment poses challenges to the hospitality industry, the group is well positioned to further develop our brands to deliver long-term growth for all stakeholders.”
According to the Coffer Peach tracker, a prominent industry sales monitor, TRG’s like-for-like revenues outperformed the broader market across most of its divisions during the 33 weeks to August 21.
But trade in Wagamama and leisure shops slowed in the second half of the period due to the summer heat wave and weaker delivery-related orders.
Demand at concession outlets was also impacted by airlines cutting their summer flight schedules after staff shortages sparked unrest at UK airports earlier this year.
Lara Martinez, an analyst with research firm Third Bridge, said: ‘Frequency of visits has fallen among UK operators, while spending per cover appears to have risen, an early indicator that people are choosing to eat out less often, but more of a create opportunity. out.
“That said, we’re hearing how TRG’s younger brands, such as Wagamama, could be somewhat shielded as their target audience isn’t experiencing the same cost increases as older consumers, as evidenced by LFL sales growth clearly outpacing the market. ‘
The Restaurant Group shares rose 3.35 percent to 44.4 pence late Thursday afternoon, though their value has fallen 55 percent since the start of the year.