The Restaurant Group has today reported a loss of £62.6m in the first half of this year, but in a trading statement somewhat bullishly said trading since the summer was “very encouraging.”
The Restaurant Group owns Wagamama, Frankie & Benny’s, Chiquito, and is fast developing its pubs portfolio. The group had made a £28.1m profit in the six months to the end of June last year, before Covid-19 took its toll.
The group’s half-year results published today show losses incurred primarily from costs of permanently closing 147 outlets.
Now, like other hospitality businesses it faces the further restriction of trade resulting from the 10pm curfew, and regional lockdown measures limiting social gatherings.
Remarkably share prices rose 6% earlier today in London as the business indicated sales growth over the summer, boosted by Rishi Sunak’s Eat Out to Help Out initiative.
The like-for-like revenues at Wagamama were up 11% year-on-year between 4 July and 20 September, alongside a reported 5% outperformance of the whole restaurant sector.
Other brands like Frankie & Benny’s posted growth of 4%.
The Restaurant Group’s Pub portfolio reported similar timeline growth of 14%, some 20% higher than the rest of the market.
The Restaurant Group’s CEO, Andy Hornby said of the results: “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.
“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 company remains ambitious and stated that its strategy long-term was to open 54 new Wagamama restaurants in the UK, and more in also the US via franchises and joint ventures, although numbers were not cited.
Growth of the pub portfolio is also on the agenda with numbers targeted to increase from 77 to circa 140.
The Restaurant Group’s CEO, Andy Hornby is looking to substantially benefit personally from the latest results as The Restaurant Group is planning to award him a substantial boost in remuneration.
This Thursday The Restaurant Group will ask their shareholders for approval of a new executive bonus scheme that would give Hornby a fixed annual pay-out on top of his £630,000 base salary. If the shareholder vote is carried, Hornby will be awarded with a circa £787,500 bonus in shares seeing his overall remuneration rise in 2020 to £1.3million. Hornby’s £945,000 cash bonus would then be reintroduced in 2021 with a £630,000 share award, taking his maximum potential remuneration up to over £2 million.
The shareholders are being asked to approve the move at a time when most in the industry are looking at their very survival.
The Restaurant Group in 2020 has already made 4,500 people redundant and closed about one third of its 650 pubs and restaurants. So, the CEO’s bonus seems does like a very BIG ask, and a somewhat impertinent one too.
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Hospitality & Catering News: restaurant group loss bonus – 6 October 2020 – restaurant group loss bonus
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