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Mon 11th Sep 2023 - Update: The Restaurant Group agrees sale of Leisure division for £1, Various Eateries CEO steps down |
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The Restaurant Group agrees sale of Leisure division to Big Table Group for £1: The Restaurant Group (TRG) has agreed the sale of its Leisure division to the Big Table Group for £1. The group said it has entered into an agreement for the sale of the business, comprising of 75 trading sites and associated restaurant and management team employees, to the operator of Las Iguanas, Café Rouge, Banana Tree and Bella Italia. As part of the transaction, TRG said it will pay a cash contribution of £7.5m, and the transaction is expected to complete early in the fourth quarter of 2023. It follows an announcement over the weekend that TRG was in advanced talks with Big Table Group over the business, which includes the Frankie & Benny’s and Chiquito brands. “As part of the ongoing review of its strategic options, the board of TRG has concluded that a sale of its loss-making Leisure business will significantly accelerate the group’s core strategic goals of adjusted Ebitda margin accretion and deleveraging,” TRG said. “The transaction will create a high-quality retained group consisting of the three divisions of Wagamama, Pubs and Concessions, which have delivered very strong like-for-like sales and adjusted Ebitda growth during the first half of 2023, with appealing long-term prospects. As stated in our interim results announcement on 6 September 2023, the TRG property and operations teams have made good progress in efficiently managing the disposal programme of closed sites, and we expect to exit the majority of the lease obligations of the recently closed sites by the end of FY24. We would therefore expect the remaining liability and expected cash outflow from closed sites (most of which are currently sub-let) to be no more than £1m to £2m a year from FY25 onwards. The consideration payable by the acquiror to the group on completion of the sale is £1. In addition, TRG will pay a cash contribution of £7.5m, subject to certain cash, debt and working capital adjustments, and there will likely be a minor working capital outflow for TRG in the FY23 year-end. TRG expects the transaction to accelerate our deleveraging profile from FY24 onwards.” It added: “The transaction has attractive financial and strategic benefits for TRG. It accelerates TRG’s adjusted Ebitda margin accretion plan in excess of 100bps in its first full year following completion (FY24). It is expected to be marginally EPS accretive in its first full year following completion. It is expected to improve post-IFRS 16 leverage with a reduction of IFRS-16 lease liabilities of circa £50m. It is expected to further accelerate our progress to achieve net debt/adjusted Ebitda below 1.5x before the end of FY25. The board is continuing to actively explore its strategic options to further accelerate margin accretion and deleveraging.” Andy Hornby, TRB chief executive, said: ‘A sale of our Leisure business significantly accelerates our medium-term strategic plans to increase adjusted Ebitda margins and reduce leverage. On behalf of TRG, I would like to express our massive thanks to the extraordinarily hardworking and dedicated teams across the Leisure business, who have made huge improvements in the customer proposition over the last few years. We wish them all well as part of the Big Table Group.” Alan Morgan, chief executive of the Big Table Group, added: “Creating, developing and acquiring brands that complement our existing portfolio whilst offering widespread consumer appeal is a fundamental part of our growth strategy. This exciting acquisition forms part of that strategy and we are delighted to be welcoming this new team into The Big Table Group.” The buyer is Baltra Bidco, a newly incorporated company wholly owned by the Big Table Group, which is in turn owned by the private equity firm Epiris. While the transaction is expected to complete during the autumn, TRG has said it will provide “certain customary services” (as part of a service agreement), at cost to Big Table Group, for a limited period of time to ensure an orderly operational transition for the 75 trading sites currently within the Leisure business. This transition is expected to be completed by 31 March 2024. Sites that have been previously closed as part of the Leisure businesses estate rationalisation plan will remain the responsibility of TRG.
Latest Who’s Who of UK Food and Beverage featuring 730 companies to be released on Friday: The latest Who’s Who of UK Food and Beverage will be published for Premium subscribers on Friday (15 September), at midday. A total of five companies have been added to the database, which now features 730 companies. This month’s edition also includes 25 updated entries. The companies, listed in alphabetical order, will have their most recent results reported as well as broader information around Ebitda, plans and trading style available. The database merges Companies House information, interviews and other public information to provide an easy to reference and exhaustive guide to the sector. Premium subscribers also receive access to five other databases: the Multi-Site Database, which is produced in association with Virgate; the New Openings Database; the UK Food and Beverage Franchisor Database; the Propel Turnover & Profits Blue Book; and the UK Food and Beverage Franchisee Database. Companies can now have an unlimited number of people receive access to Propel Premium for a year for £995 plus VAT – whether they are an operator or a supplier. The single subscription rate is £495 plus VAT for operators and £595 plus VAT for suppliers. Email jo.charity@propelinfo.com to upgrade your subscription. Premium subscribers are also being given exclusive access to the recording and slides to Propel Multi-Club Conferences. They also receive their morning newsletter 11 hours early, at 7pm the evening before; regular video content and regular exclusive columns from Propel group editor Mark Wingett.
Various Eateries CEO steps down: Yishay Malkov, chief executive of Various Eateries, has stepped down from his role at the Andy Bassadone-chaired business. He will also resign from the board and from all directorships in respect of Various Eateries companies with immediate effect. Despite his resignation, Malkov will be available to the Various Eateries team over the coming months to ensure a smooth transition period. Bassadone will continue to lead the group in his role as executive chairman, with a strong focus on the growing Noci brand, while Rebecca Tooth, who was brought in last month, will continue as managing director of Coppa Club. Bassadone said: “Yishay has shepherded the company through the toughest three years that I have seen in this industry in my entire career. On behalf of the whole Various Eateries team, I would like to thank him for his dedication and tireless hard work over this period and wish him well for the future.”
Greggs chief among those urging chancellor to keep business rates frozen: Greggs chief executive Roisin Currie is among 44 bosses to have written to Jeremy Hunt, urging him to avoid a £400m business rates hike that they say risks undermining the fight against inflation. The letter, coordinated by the British Retail Consortium (BRC), asks for rates to be frozen and said firms had been battling to contain price rises despite costs soaring over the past 18 months. Business rates normally go up in April, using the previous September’s inflation rate, but have been frozen for three years since the pandemic. The BRC letter said that, based on inflation this month remaining higher than 6%, a hike next spring would add more than £400m to business rates bills. “Global supply chain issues are already likely to increase costs in the months ahead, including Russia’s withdrawal from the Black Sea Grain Initiative and targeting of Ukrainian grain silos, plus restrictions on Indian rice exports and ongoing labour market challenges,” the letter said. “Against this backdrop, the government should not make the situation worse by adding significantly to our cost base – freezing the business rates multiplier at its current level would avoid this.” Helen Dickinson, chief executive of the BRC, added: “A £400m rates rise will also cost jobs, harm the economy and damage the vibrancy of our town and city centres. While other business taxes, such as corporation tax and VAT, rise and fall with the movements in the economy, business rates must be paid in full whether firms are making a profit or a loss.”
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