COVID-19: Wagamama proprietor to cap shareholders as losses worsen | Financial information
The proprietor of restaurant manufacturers Frankie and Benny’s and Wagamama has introduced plans to boost £ 175million whereas revealing a heavy toll on his funds because the coronavirus disaster continues.
The Restaurant Group (TRG) stated the sale of shares ought to be the final step in measures taken up to now to consolidate its funds following a 12-month hiatus in buying and selling on account of COVID-19[female[feminine pandemic restrictions.
It revealed a 57% drop in revenue in 2020 and an annual pre-tax loss of £ 128million compared to a figure of £ 37million in the previous 12 months – a time when trading was already suffering in a context of cautious consumer spending.
The company reacted to the crisis in the hotel industry by permanently closing 250 of its 650 restaurants, thereby cutting 3,000 jobs. Wagamama is the only brand in its team to be spared.
He said that although group dining venues have been hammered to date by periods of forced shutdown, delivery and take-out in Wagamama had more than doubled from pre-pandemic levels.
TRG said it was cautious about the outlook, as the sites will not be able to reopen outdoors until April 12, under the leadership of Prime Minister Boris Johnson. roadmap out of lockout for England, while catering sites will be closed until May 17 at the earliest.
Shares rose more than 8% to 129p as he revealed updated terms for his share sale.
The company said it would issue 95.9 million new shares to investors at a price of 100 pence per share and 79.7 million new shares to existing shareholders.
The offer would give them five new shares for 37 existing shares, also for 100 pence.
Managing Director Andy Hornby said: “The capital increase announced today, alongside the debt refinancing announced last week, represents the latest important step in our restructuring process and provides TRG with the long-term flexibility of ” invest in the growth of our business.
“As the outlook for the sector remains uncertain and we recognize the continuing restrictions across the UK, we are confident that the actions announced today will allow us to become one of the long-term winners.”
Susannah Streeter, Senior Investment and Markets Analyst at Hargreaves Lansdown, said: “There is no doubt that the group is in a difficult situation right now.
“Sales have fallen 57% in 2020 and with their sites still under wraps, cash consumption is intense, at around £ 5.5million per month.
“The extension of the holiday scheme and the reduction of VAT to 5% were welcome announcements in the budget, but they are like sticky casts for a company that has suffered a serious injury.”