TRG owner of Frankie & Benny’s and Wagamama returns to profit
- Restaurant group made pre-tax profit of £2.3m in the half year to 2 July
- Wagamama, Chiquito and Frankie & Benny’s are operated by the business.
- The company’s shares have declined by about 72% since August 2019
The parent company of Frankie & Benny’s has returned to profit in the first half despite challenging conditions in the hospitality sector.
The restaurant group, which also operates Wagamama and Chiquito, announced a statutory profit before tax of £2.3 million for the six months ended 2 July, compared with a loss of £28.5 million in the same period last year.
Profitability was supported by significantly lower damage charges and a bumper trading performance, with turnover up 10 per cent to £467.4 million.
Recovery: Frankie and Benny’s owner restaurant group returns to profit in first half
Its discount business saw the biggest increase in sales, with a similar increase of 28 percent due to a continued boom in air travel following the absence of pandemic-related restrictions.
Demand was hit by the emergence of the Omicron variant in early 2022, discouraging many Britons from going to work or visiting hospitality venues.
TRG reported good business in the first half at its pubs and Wagamama outlets, although similar revenues at its leisure division declined, which it partly attributed to consumer cost-of-living pressures.
However, all of the company’s segments achieved business growth in the eight weeks to 27 August, with concession sales rising by a third.
TRG said Wagamama benefited from cooler summer weather, while popular cinema releases such as Barbie and Oppenheimer boosted leisure business.
Following the results, owners of the London-listed company have raised their expectations on adjusted core profits ‘moderately’.
TRG Chief Executive Andy Hornby said: ‘We are encouraged by the significant progress made in the first eight months of the year by delivering strong LFL sales growth despite the consumer backdrop.’
He added: ‘We are making excellent progress on our medium-term plan, and the board continues to actively explore strategic options to accelerate margin growth and deleveraging.’
TRG said annual cost savings of £5 million have been achieved, while planned reductions across its holiday property portfolio are progressing ahead of schedule.
From the next financial year, the group plans to launch three ‘high-quality’ pubs, along with eight to ten new Wagamama establishments.
Shares in the restaurant group were down 1.8 per cent at 42.9p early on Wednesday afternoon, meaning they have fallen by almost 72 per cent since Hornby took charge in August 2019.
Hornby has faced a lot of backlash from some investors for the company’s long-term share price weakness and four consecutive annual losses.
In March, 46 per cent of shareholders – including activists Oasis Management and Irenic Capital – voted against the ex-HBOS chief executive’s proposed £792,000 pay package.