The Restaurant Group (RTN) will axe a chunk of its Frankie & Benny’s stores, under plans to trim its portfolio by 125 outlets and seek rent renegotiations elsewhere.
The group raised £57m via a share placing in April, after warning that it expected its sales to halve this year. It had envisaged reopening 400 of its 600 stores across July to December. It is now clear that around a fifth of its outlets will not reopen. The Restaurant Group currently has 226 Frankie & Benny’s stores.
The Restaurant Group will use a company voluntary agreement (CVA) to reshape its portfolio, having previously earmarked 90 sites for closure by the close of next year. A review of its estate has identified 210 sites that are underperforming, on poor lease terms, not expected to produce profitable returns, or are affected by a combination of the three factors.
Of these sites, 125 will be closed with the remaining 85 subject to rent renegotiations. The Restaurant Group will meet creditors on 29 June. Its overhaul will not target its Wagamama, airport concessions or pub activities.
Peel Hunt analysts forecast full year 2020 adjusted pre-tax losses and losses per share of £3.3m and 0.5p respectively, before rising to pre-tax profits and earnings per share of £60.6m and 8.1p in 2021.
