The Restaurant Group (TRG)has increased its full-year profit expectations in light of strong sales growth at its outlets, defying the current difficulties in the casual-dining sector.
TRG has reported strong like-for-like sales and adjusted Ebitda growth for the for the 26 weeks ended 2 July 2023, driven by the performance of its Wagamama, Pubs and Concessions businesses. The group, which also owns the Brunning & Price pub chain and Italian-American diner Frankie & Benny’s, said this week that the stronger than expected trading performance supported a “moderate increase” to full-year expectations for adjusted earnings.
The report Highlights
• Strong trading performance supporting an increase in FY expectations
o Strong like-for-like sales and EBITDA growth driven by Wagamama, Pubs and Concessions
o Total revenue +10% to £467.4m (2022: £423.4m)
o Adjusted EBITDA +15% to £36.3m (H1 2022: £31.4m)
o Adjusted PBT of £7.2m (H1 2022: loss of £0.1m)
o The strong performance has supported an increase in its EBITDA expectations for the full year
• Continued outperformance of market leading brands, with Pubs and Concessions the standout performers
o Pubs – Recognised as the best Pub Group in the UK
• Total YTD LFL sales VAT Adjusted: +10%
• Outperformance vs market: 2%
• A consistent outperformer over last 9 years
o Concessions – The partner of choice for all food and beverage opportunities
• Total YTD LFL sales VAT Adjusted: +31%
• Outperformance vs market: 12%
• A significant recovery in UK air travel; passenger volumes will recover to 2019 levels in 2024, a year earlier than expected
o Wagamama – The UK’s number one dining chain
• Total YTD LFL sales VAT Adjusted: +9%
• Outperformance vs market: 3%
• A consistent and strong track record of market outperformance
• Excellent progress executing medium-term plan outlined in March
o Well on track to deliver targeted EBITDA margin accretion and deleveraging
o Medium term cost outlook continues to improve
o Accelerated the expansion of Wagamama estate to 8-10 a year from FY24
o The Board continues to actively explore strategic options to further accelerate margin accretion and deleveraging
• Well positioned to deliver further progress and continued outperformance
o Current trading remains strong
o Brands are well positioned to continue to outperform the market
o A clear plan in place to maximise shareholder returns, which is progressing significantly
o Increasingly confident for the future and upgraded full year expectations
Andy Hornby, Chief Executive Officer, commented: “We are encouraged by the significant progress made in the first eight months of the year, delivering strong LFL sales growth despite the consumer backdrop. In light of the strong trading we are increasing our expectations for FY23 Adjusted EBITDA.
“We are making excellent progress on our medium-term plan and the Board continues to actively explore strategic options to further accelerate margin accretion and deleveraging.”
