15th Sep 2021 12:26
(Alliance News) - Restaurant Group PLC warned it is facing challenges from cost inflation, supply chain blockages, and the 'pingdemic' as it reported on Wednesday a dip in sales and a narrower loss in the first half of 2021.
The London-based restaurant operator, which owns the Wagamama and Frankie & Benny's brands, made GBP216.8 million in revenue in the 27 weeks that ended July 4. That's down 4.6% from GBP227.2 million in the 26 weeks ended June 28 last year. Its pretax loss narrowed to GBP58.8 million from GBP234.7 million.
Compared to the first half of 2019 - pre-pandemic - revenue was down 58% from GBP515.9 million, while pretax loss narrowed from GBP87.7 million.
Shares were down 5.0% to 115.20 pence in London on Wednesday afternoon.
The company's restaurants operated under varying levels of restrictions throughout the period. But even since all Covid rules were lifted on July 19, "it has been operationally challenging to operate our pubs and restaurants," the company said. Food and drink supply chain issues have combined with the "pingdemic" - when hospitality workers were frequently being told to stay at home, after coming into contact with Covid cases.
The firm also said it faces the industry-wide challenges of lower dine-in customer volumes compared to food deliveries, rising wages, an expected increase to value-added tax, and international travel restrictions - which have affected Restaurant Group's airport locations.
"The group continues to navigate these short-term challenges successfully but we expect increased inflationary cost pressures through [the 2022 financial year]," the company said.
Even so, Restaurant Group said its "trading performance since reopening supports an increase" to its full-year earnings before interest, tax, depreciation and amortisation expectations, without specifying figures. The company said it outperformed the industry in sales growth over two years, in the period between May 17, when indoor dining resumed, and August 29.
By Ivan Edwards; [email protected]
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