TRG reports strong start to 2023
The Restaurant Group (TRG), owner and operator of brands including Wagamama and Frankie & Benny's, has released a financial update for the first four months of the year, reporting that current trading conditions continue to prove encouraging and that the group has made good progress on cost-saving initiatives.
TRG currently operates approximately 410 restaurants and pub restaurants across the UK as of 2 May 2023.
The business has delivered c.£5m of incremental cost savings on an annualised basis. This, paired with a strong trading performance, means TRG is tracking ahead of management expectations on its medium-term margin accretion and deleveraging plans.
Year-to-date (YTD) like-for-like (LFL) sales (%) vs 2022 comparable split by quarter
| Q1 Total LFL sales | Q1 Total LFL sales 'excl. VAT benefit' (illustrative) | Q2 to date total LFL sales | |
| 13 weeks to 2 April 2023 | 13 weeks to 2 April 2023 | 4 weeks to 30 April 2023 | |
| Wagamama | +2% | +9% | +9% |
| Pubs | +5% | +10% | +8% |
| Leisure | (4)% | +2% | (1)% |
| Concessions | +37% | +44% | +20% |
*VAT benefit boosted LFL sales by approximately 5 to 7% for the restaurant and pub sector in Q1 2022 (13 weeks to 3 April 2022)
Wagamama and pubs have both continued to deliver strong trading, demonstrating the quality offerings and brand strength of both propositions. Additionally, the group is accelerating the previously announced rationalisation plan for the leisure arm of the business, which will further improve cash generation in the second half of FY23.
The strong concessions LFL sales are partly due to the 2022 comparative when air passenger volumes were impacted by Omicron. However, encouragingly, concessions LFL sales are up 5% on 2019 (year-to-date) and up 10% on 2019 in Q2.
YTD LFL sales (%) vs 2022 comparable for the 17 weeks ended 30 April
| TRG Division | Total YTD LFL sales | Delivery and takeaway LFL sales | Dine-in LFL sales | Dine-in LFL sales VAT adjusted | |
| Wagamama | +4% | (13)% | +10% | +15% | |
| Pubs | +6% | n/a | +6% | +10% | |
| Leisure | (3)% | (14%)% | (1)% | +3% | |
| Concessions | +31% | n/a | +31% | +36% |
Andy Hornby, CEO of TRG, comments: "We've enjoyed a really positive first four months of the year. Wagamama and our Brunning & Price Pubs continue to trade very strongly and it is especially pleasing to see the consistent growth in dine-in sales with customers clearly enjoying eating out despite the economic backdrop. Our concessions business is also performing particularly strongly as air travel continues to recover."
The group intends to provide enhanced segmental financial disclosure for all four divisions in its interim results in September.
As part of the previously announced leisure estate rationalisation plan, TRG will close 23 sites in its leisure estate at the end of May, having successfully negotiated several early exits.
Current favourable UK property market dynamics are providing additional opportunities for new Wagamama sites on attractive rent terms with good incentives. TRG will accelerate the expansion of Wagamama restaurants and now anticipates seven to eight new openings in FY24 (versus five planned previously).
Ahead of the group's upcoming AGM on 23 May, Columbia Threadneedle Investments – its largest shareholder (c19%) – issued the following statement: "As a long-term shareholder in TRG, we remain supportive of TRG's board and management team, who have successfully navigated the exceptionally tough industry backdrop.
"The board continues to receive our support as they assess the best options to deliver long-term shareholder value."
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