Wagamama owner The Restaurant Group taps investors for £175m
The Restaurant Group, which owns Japanese-inspired chain Wagamama, is preparing to tap investors for £175m.
The firm said this morning that capital raise will be used as a buffer in case of a resurgence of the Covid-19 pandemic and also allow it to expand its Wagamama brand and pubs business.
Restaurant Group said it expects there to be “good and profitable opportunities” for expansion.
The casual dining operator, which also owns Frankie and Benny’s, will also use the proceeds of the share placing to pay down its net debt.
The firm also announced this morning that total revenues plunged 57 per cent to £459.8m due to the impact of lockdown closures during the pandemic.
However, it said Wagamama delivered “exceptional” like-for-like sales growth when it was open for dine-in trading.
Restaurant Group posted a loss before tax of £127.6m, compared to a loss of £37.3m in 2019.
Susannah Streeter, senior investment and markets analyst, Hargreaves Lansdown
‘’There may now be a roadmap to reopening for the hospitality sector, but it’s not come soon enough for Restaurant Group. It’s been forced to go cap in hand again to shareholders, looking for £175m to bolster its finances after being side swiped by the ongoing impact of the coronavirus,” Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdowne, said.
She added: “The cash injection from this latest rights issue will give it some breathing space but there may well be more restructuring pain to come, as a slimmed down version of Restaurant Group emerges from the crisis.’’