The restaurant group, owner of the wagamama and frankie & bennys chains, has reported a strong recovery in trading since the end of the coronavirus lockdownbut warned of an extremely uncertain outlook and signalled further closures.
Chief executive andy hornby said that overall trading had been significantly better than predicted but did not rule out further job cuts, as its airport concessions continued to suffer while international travel remained at historic lows.
We dont expect a major recovery in air travel before the first half of 2022, he warned, adding that the company planned to close 60 per cent of its airport sites to bring the number to about 35. he did not provide any details on jobs.
The group said on tuesday its pan-asian wagamama brand and pubs division had achieved year-on-year sales growth of more than 10 per cent in the 11 weeks to september 20, boosted in part by the uk governments eat out to help out discount scheme. suburban outlets and those in large retail parks enjoyed the best performance thanks to displaced workers and local summer holidays, it said.
In the six months to the end of june the group reported a statutorypre-tax loss of 235m, compared with an 88m loss the year before, owing to the nationwide lockdowns in march. revenues more than halved to 227m.
But a programme of severe cost-cutting across the business including reductions in senior staff pay and capital expenditure, and putting more than 20,000 staff on furlough, allowed it to trim monthly cash burn to 3.5m.
Net debt, which the restaurant group said amounted to 311m at the end of june, was better than analysts had forecast.
Mr hornby said sales had been hit in the past two weeks by a combination of the 10pm curfew on hospitality businesses, the limiting of group numbers to six and the governments instruction for employees to work from home.
Most difficult, he said, were regional lockdowns that prevented members of different households meeting in public spaces.
The oversupply of casual dining chains and increasing cost of rents and business rates put the sector in a fragile position even before the crisis. the majority of national chains have gone through an insolvency process or been sold since the pandemic began.
The restaurant group had already planned a broad restructuring of the business before the pandemic and has used the crisis to cut the size of its estate by around a third, to about 400. it has also cut 4,200 jobs.
It noted a 172m one-off charge in the six months to the end of june resulting from the administration of its chiquito and food & fuel brands in march and the writedown of assets after a company voluntary arrangement in june.
The companys directors said the possibility of a second national lockdown represented a material uncertainty to the groups ability to continue as a going concern but added that they believed the restaurant group had enough reserves to continue operating for 12 months.