The Restaurant Group reports trading ‘continues to be very encouraging’ with ‘dine-in trends strong’, closing 23 leisure sites in May and accelerating Wagamama expansion: The Restaurant Group (TRG) has reported trading “continues to be very encouraging” with “dine-in trends particularly strong”. TRG said as part of the previously announced leisure estate rationalisation plan, the group will now close 23 sites in its leisure estate at the end of May 2023, “having successfully negotiated a number of early exits”. It will also accelerate the expansion of Wagamama restaurants and now anticipate seven to eight new openings in FY24 versus five planned previously. The company reported Wagamama sales are up 9% year-on-year for the 4 weeks to 30 April 2023. The pubs business saw like-for-like sales in the period increase 8% while concessions were up 20%. Like-for-like sales in the leisure division were down 1%. Year to date like-for-like sales are up 4% at Wagamama, 6% in the pubs business and 31% in concessions. The leisure division has seen a 3% fall. Year-to-date delivery and takeaway like-for-like sales are down 13% at Wagamama and 14% in the leisure division. However, TRG said dine-in sales for the 17 weeks ended 30 April 2023 are up 10% at Wagamama (15% when adjusted for VAT) , 6% in pubs (10% on VAT adjusted basis) and 31% in concessions (36% on VAT adjusted basis). Leisure dine-in like-for-like sales were down 1% (up 3% when adjusted for VAT). TRG said good progress on its cost saving initiatives was delivering circa £5m of incremental cost savings on an annualised basis. It added the combination of current trading and incremental cost savings achieved “provides confidence that TRG is tracking ahead of management expectations on its medium-term margin accretion and deleveraging plans”. The group said it expects to benefit from approximately 70% of the circa £5m of annualised cost savings in FY23, with the full benefit flowing through from FY24 onwards. TRG said: “Wagamama and pubs have both continued to deliver strong trading, demonstrating the quality offerings and brand strength of both propositions. TRG is accelerating the previously announced rationalisation plan for the leisure business which will further improve cash generation in the second half of FY23. The exceptionally strong concessions like-for-like sales are in part due to the 2022 comparative when air passenger volumes were impacted by Omicron. However, very encouragingly, Concessions like-for-like sales are up 5% on 2019 (year-to-date) and up 10% on 2019 in the second quarter. The group intends to provide enhanced segmental financial disclosure for all four divisions at its interim results in September. Current favourable UK property market dynamics are providing further additional opportunities for new Wagamama sites on attractive rent terms with good incentives. The group will accelerate the expansion of Wagamama restaurants and now anticipate seven to eight new openings in FY24 (versus five planned previously), capitalising on the favourable property market dynamics. TRG is pleased with the early progress in executing the plan to deliver significant Ebitda margin accretion over a three-year time horizon and the board continues to consider long term strategic options.” Meanwhile, TRG has appointed Helen Keays as a non-executive director. She will join the company’s from 1 June 2023, and will become a member of the nomination and remuneration committees. She is currently a non-executive director and chair of the remuneration committee at soft drinks manufacturer Nichols, and until August 2020 was senior independent director at Domino’s Pizza Group. Prior to her lengthy non-executive career, she held positions as marketing director at Sears Financial Services and customer management director at Vodafone.