19th Jul 2023 08:55
(Alliance News) - Restaurant Group PLC on Wednesday said sales have climbed recently, with its Wagamama chain impressing, even after hot weather hurt footfall in May and June.
Restaurant Group shares surged 8.6% to 42.35 pence each in London on Wednesday morning.
In the two weeks to July 16, which forms part of TRG's third-quarter, like-for-like sales at Wagamama surged 21% on-year. Growth accelerated from 5% in the second-quarter to July 2, and 2% in the first-quarter, which ran to April 2.
In the pubs division, TRG's like-for-like sales improved 7% in the first two weeks of the third quarter. Growth so far in the period has eased from 13% in the second-quarter, but quickened from 5% in the first. TRG owns the Brunning & Price pub brand. Adjusted like-for-like sales rose 10% on-year in pubs during the first-quarter, however. The figure was adjusted for a more favourable VAT rate enjoyed in the first quarter of the prior year.
Its leisure, though "the most impacted by the current cost-of-living pressures", like-for-like sales have surged 12% so far in the third-quarter. They had fallen 7% in the second and 4% in the first. VAT-adjusted like-for-like sales rose 2% on-year in leisure during the first-quarter.
TRG noted that across the board, "dine-in trends have been particularly strong".
"Wagamama has continued to trade strongly. Despite trading being temporarily impacted by the hot weather in late May and June, Wagamama still outperformed the market in Q2. Very encouragingly, dine-in covers are also in year-on-year growth. Our recent openings are trading ahead of expectations and we have confidence that our expansion plan will continue to deliver highly attractive returns for shareholders," the company said.
"Brunning & Price Pubs has delivered another exceptional trading performance in the first half of the year, with dine-in covers in year-on-year growth. B&P has continued its long term trend of out-performing the market and the business has recently been recognised as the best Pub Group in the UK by the CGA PubTrack survey, further illustrating the core strength of the B&P proposition."
Meanwhile, its concessions offering has been boosted by a "rapid recovery of passenger volumes". Like-for-like sales are up 34% so far in the third-quarter, accelerating from 23% growth in the second.
TRG added: "The strength of the concessions performance is further illustrated by comparing the trading run-rates against pre-Covid levels, with LFL sales versus 2019 up 3% in Q1, up 10% in Q2 and up 15% in Q3."
The "rationalisation programme" in its leisure arm has continued. TRG is sizing up closures of 35 sites by the end of its financial year, eight of those freeholds.
"The freehold sales are expected to generate approximately GBP8 million to GBP10 million of cash proceeds," the company explained.
Elsewhere, its new sites have impressed. It has opened four new Wagamama sites so far in the financial year, and they are "trading ahead of expectations". Its also toasted the success of its latest pub, Mytton & Mermaid in Shrewsbury. The site has delivered its highest ever level of sales for a new opening.
TRG added that it is already reaping the rewards of its recently-outlined medium-term strategy plan. It has made incremental cost savings of GBP5 million per year.
TRG added: "Given the very encouraging trading performance in the first 28 weeks of the financial year, TRG is confident in delivering management's expectations for FY23."
By Eric Cunha, Alliance News news editor
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