TGI Fridays operator substantially narrows losses in transitional year: Hostmore, the parent company of TGI Fridays, has reported revenue fell to £190.7m for the year ending 31 December 2023 compared with £195.7m the previous year. Group Ebitda fell to £22.2m from £31.1m the previous year. Loss from operations fell to £11.1m from £95.8m the year before. Pre-tax losses narrowed to £25.5m from £108.3m the year before. Full-year annualised expense savings of £8.4m are on track to be achieved in FY24. New store openings deferred for FY23 have now been done so until the end of FY24, saving approximately £15m in cash expenditure. The company said the successful operational and portfolio management of loss-making stores reducing annual Ebitda losses of £4.2m to less than £0.5m run rate at end of 2023. The group added it has seen continued improvement in guest opinion score and net promoter score, resulting from renewed focus on guest experience. In addition to new store opening deferrals, further extended deferral of requirement for new store openings under franchise agreement has been made until FY26, saving a further £4.5m of cash expenditure in FY25. The company has also reached agreement to exit two stores that contributed an aggregate Ebitda loss of £0.5m in FY23. The company stated: “Our strategic business measures are yielding promising results, with each month of the second half of FY23 producing positive Ebitda returns. We have consolidated our approach, building on the evolution of our journey outlined in the FY22 results. The progress includes organic growth and cost reduction initiatives, menu price increases and revised capital allocation strategies, all contributing to our improved performance across the TGI estate. Our dine-in experience was our primary focus for 2023 and is continuing to be so in 2024. This has produced further menu evolution, underpinned by quality, relevance and simplicity. 2023 saw the iconic ‘TGI’ put back into Fridays, regaining our brand equity. TGI Fridays has always been associated as a place of fun and celebrations where delicious food and drinks can be enjoyed. It is pleasing that these elements of investment in our menus and service improvements have delivered a positive impact on the overall guest experience as evidenced by our guests’ feedback. We have sought to achieve this by maintaining pricing discipline, as demonstrated by the roll out of our value proposition ‘Kids Eat Free’, which acknowledges the pressures on our core family disposable income. This has been received extremely positively and continues to be a component of our offering. To complement this and widen our appeal to new audiences, we continue to embed our ‘Raising the Bar’ strategy. This has been a headline initiative for TGI Fridays as we seek to build on Fridays’ heritage and values. This has included introducing fun and innovative offers and concepts, such as TGI Fridays bottomless brunches, cocktail masterclasses, and new celebration packages, showcasing the very best of our brand. This has attracted many new guests.” As previously reported, Hostmore has reached an agreement on a proposed all-share acquisition of TGI Fridays Inc (including affiliates TGI Fridays), the global hospitality business that owns the American-themed casual dining brand, which is the company’s franchisor. The company also previously reported a 7% decline in like-for-like revenue in the first quarter of 2024, “due principally to reduced consumer demand across the sector”. Ebitda in the quarter was £300,000, an improvement of £3.2m on the previous year, with March 2024 being £1.8m ahead of the same period in FY23. Consolidated net bank debt at the end of the first quarter of 2024 was £26.1m, in line with expected seasonality and consistent with the forecasted position for the end of FY24. Stephen Welker, chair of Hostmore, said: “2023 was a transitional year for Hostmore during which we successfully implemented a turnaround of the business. The turnaround reduced costs, deferred cash outlays for new store openings, and improved the operations of our existing stores, while introducing a revised capital allocation policy to focus on high return on investment organic growth initiatives and prioritising the full repayment of our borrowings and initiating shareholder distributions. Following the period end, we announced a proposed all-share acquisition of TGI Fridays, Inc, the company’s franchisor that operates through franchising and licensing agreements in 44 markets and a network of company-owned stores in the US. Subject to completion, the transaction will give the group increased scale, flexibility and re-rating potential that will allow us to accelerate our existing strategy of prioritising debt reduction and enhancing the scope for shareholder returns.”