Wagamama owner raises £57m in share places but warns some sites may not reopen

09 April 2020 by
Wagamama owner raises £57m in share places but warns some sites may not reopen

The Restaurant Group has raised £57m through a share placing aimed to provide the company with "sufficient" liquidity to continue to operate through the coronavirus crisis.

In response to the coronavirus outbreak, the group, which is behind household names including Wagamama and Frankie and Benny's, issued a "pessimistic scenario for the current financial year", which assumed all restaurants and pubs will remain closed until the end of June and with the possibility that only 400 of its 600 sites will reopen.

The placement of up to 19.9% of the group's existing issued share capital was in "the best interests of shareholders and wider stakeholders", the board of directors has said.

Overall decline in like-for-like sales is expected to reach 45% in 2020, with group total sales expected to fall by 50%. In response the group has also capped capital expenditure for 2020 at £30m, furloughed more than 20,000 employees and is working with landlords to ensure minimum guarantees within concessions are not enforced.

The cost of the group's restaurants needing to remain closed beyond this period has been forecast to be £5m a month. The group added: "With the government indicating that social distancing measures will remain in force post-lockdown, we believe that there will be a slow recovery in footfall during the rest of this financial year.

"We therefore assume that we would be extremely disciplined in the phased reopening of our restaurants through July to December 2020 and would expect to reopen around 400 of our 600 restaurants and pubs across that period, potentially with some restrictions on operations immediately following lockdown."

Earlier this week the group announced that it had extended its credit facility and that its executive team had taken pay cuts.

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