Hostmore cuts costs and reduces losses

Hostmore plc, owner and operator of TGI Fridays, has reduced its annual losses as part of a group-wide recovery strategy.

The operator has described the year as "one of two halves", with the first half being a "transitional period" dedicated to leadership changes and an operational restructure, with the second half resulting in "significant profit improvement". 

In the period leading to 31 December 2023, the company reported a decline in revenue to £190.7m, compared to £195.7m in 2022 – a 3% drop in earnings. 

However, the business managed to cut pre-tax losses from £109.3m to £25.5m the year before as a result of a substantial cost-cutting programme, which the group says boosted profits by £6.2m

Last September, the group also unveiled plans to delay new restaurant openings until 2025 in a bid to reduce costs. In this most recent report, Hostmore claims this is expected to save a further £4.5m in FY25. 

The news follows the announcement that Hostmore, which holds an 89-strong restaurant estate across the UK, agreed to a deal to merge with US-based TGI Fridays Inc, creating a larger company that will remain listed in London. 

The "turnaround"

Stephen Walker, chair of Hostmore, comments: 2023 was a transitional year for Hostmore during which we successfully implemented a turnaround of the business.

"The turnaround reduced costs, deferred cash outlays for new store openings, and improved the operations of our existing stores, while introducing a revised capital allocation policy to focus on high ROI organic growth initiatives and prioritising the full repayment of our borrowings and initiating shareholder distributions."

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