Frankie & Benny’s (F&B’s) and Wagamama owner the Restaurant Group (TRG) has seen half-year losses nearly triple during the pandemic.
But trading has been “very encouraging” since sites reopened, the company said yesterday.
TRG, which also owns a raft of pubs and brands including Brunning & Price, revealed the Covid-19 crisis drove it to £234.7 million pre-tax losses in the six months to June 28, against a deficit of £78.8m a year earlier. Group sales were down by more than half, at £227.2m.
The company booked a £132.4m charge for restructuring costs, having shut nearly 250 of its 653 sites and concessions.
It has axed around 4,500 jobs during the pandemic after closing sites as part of a company voluntary agreement with its landlords and creditors, while also putting its Chiquito Tex-Mex chain into administration.
TRG, which has shut two Chiquitos in Aberdeen but still has two F&B’s and a Wagamama in the Granite City, plus an F&B’s in Inverness, said it was pleased with sales over the 11 weeks to September 20.
About 90% of its estate is now open and late summer trading was boosted by the UK Government’s popular Eat Out to Help Out discount scheme.
Wagamama’s like-for-like sales grew 11% in the 11-week period, as other sites in TRG’s leisure portfolio saw 4% growth and pubs notched up a 14% rise.
TRG’s concessions – many of which are based in airports – remain under pressure, suffering a 58% plunge in like-for-like sales as passenger numbers have yet to recover.
The group is shutting more than half its concessions – closing up to 41 sites, which will leave it with between 30 and 35.
TRG said it remained cautious over its outlook, given the “ongoing impact of pandemic and government-imposed restrictions”.
Chief executive Andy Hornby said: “It has been an extraordinary and difficult period for the hospitality sector but one in which we have pulled together to achieve a great deal.
“Since reopening, I am genuinely pleased with the strength of our trading performance and would like to sincerely thank each and every one of our colleagues for their extraordinary efforts.”
The former HBOS CEO added: “Whilst the sector outlook is uncertain and we are mindful of recent restrictions across the UK, we are confident that the actions we have taken provide us with strong foundations to emerge as one of the long-term winners.”
The results come amid mounting concerns over a proposed pay deal for Mr Hornby, with investor advisory firms flagging worries about plans to hand him a massive shares windfall, which would take his total 2020 pay to £1.3m.
Harry Barnick, senior analyst at market intelligence firm Third Bridge, said: “Investors will be taking a very close look at the proposed executive pay scheme and its potential fall-out.
“After so many restaurant closures and redundancies, this is a very sensitive time for brands like Wagamama, Chiquitos and Frankie & Benny’s to get embroiled in a pay row.
“The entire casual dining sector faces an immense challenge and some brands simply won’t survive into the new year. Although these insolvencies will mean less competition for the group’s brands, they probably won’t mean more customers – and that’s the problem.”