The Restaurant Group: Wagamama owner to raise millions as lockdown bites

The owner of Wagamama is seeking to raise millions of pounds after many of its restaurants had to close their doors amid lockdown restrictions.

The Restaurant Group (TRG) will seek to raise £175m from its shareholders to pay down debt and use as a buffer in case of any Covid resurgence.

Its boss said the pandemic had presented “enormous challenges” for the sector.

Total sales dropped by 57% to £459.8m in 2020 as many TRG sites were closed.

Dented sales and pandemic costs meant the group, which also owns other restaurant chains such as Frankie & Benny’s, reported a £127.6m pre-tax loss last year, compared to a £37.3m loss in 2019.

It added that its short-term outlook remains “uncertain” while lockdown restrictions remain in place.

Chief executive Andy Hornby said that TRG has “responded decisively” to restructure the businesses while preserving the “maximum number of long-term roles for our colleagues”.

“Whilst the sector outlook remains uncertain, and we are mindful of continuing restrictions across the UK, we are confident that the actions announced today will allow us to emerge as one of the long-term winners.”

Under the prime minister’s current “roadmap” for easing lockdown restrictions, hospitality venues will be able to reopen for customers dining outside 12 April at the earliest, with indoor dining set for 17 May.

During the pandemic, TRG started a major restructuring, closing about 250 sites, which largely affected staff across its Frankie & Benny’s, Chiquito and Food & Fuel brands.

It also tapped investors for cash last April, raising £54.6m from a share placing.

The firm, which now has about 400 restaurants, pubs and concessions, said the additional funds it planned to raise would be the “last step” in the restructuring plan as it prepares to reopen sites once restrictions lift.

It said Wagamama delivered “exceptional” like-for-like sales growth when it was open for dine-in trading and that the Wagamama restaurants operating takeaways and delivery services saw sales two and a half times higher than pre-Covid levels.

But Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said that it could take some time for pent-up demand to “unleash” as restaurants reopen.

“Many of The Restaurant Group’s sites have limited outdoor seating so are unlikely to fully benefit from the phased opening of the hospitality industry from 12 April,” she said.

“The cash injection from this latest rights issue will give it some breathing space but there may well be more restructuring pain to come, as a slimmed down version of Restaurant Group emerges from the crisis.”

Takeaways take off

Separately, the owner of delivery giant Just Eat said on Wednesday that it expected orders to ramp up further in 2021.

Dutch-based Just Eat reported a sharp increase in sales of €2.4bn (£2bn) in 2020, up 54% from €1.6bn the previous year. It said this was due to a 42% leap in online orders.

UK food orders increased 35% over the year and the group said this had accelerated further under current lockdown measures.

Just Eat Takeaway riders outside of a McDonald's outlet.
image captionMcDonald’s and Greggs orders have proven popular with UK customers during lockdown.

Just Eat Takeaway said UK orders were 88% higher in the first two months of 2021, with delivery orders up by more than 600% compared with a year earlier.

Partnerships with chains such as Greggs and McDonald’s were particularly popular with UK customers, it added.

However, despite the high demand for home deliveries, the platform reported a pre-tax loss of €147m euros against €88m in 2019. It said the figure reflected costs associated with the group’s takeover of GrubHub in the US and the merger of Just Eat with

Richard Hunter, head of markets at Interactive Investor, added that a “number of potential clouds” could be on the horizon for the group.

“Competition in the space is intense and, in the post-pandemic world, it is impossible to guarantee that its business model will continue to generate such strong growth as the easing of lockdown restrictions allow the global population to visit restaurants in person once more,” he said.

Restaurant-software provider Toast prepares for IPO: WSJ

(Reuters) – Toast Inc, a cloud-based restaurant software company, is planning an initial public offering that could value it at around $20 billion, the Wall Street Journal reported on Sunday.

Boston-based Toast has tapped Goldman Sachs Group Inc and JPMorgan Chase & Co to underwrite a possible listing later this year, the newspaper reported, citing people familiar with the matter. It could also consider other options including a sale or combination with a blank-check company, the Journal reported.

There are no guarantees Toast will ultimately go public or pursue another of the options, the newspaper added.

The company did not immediately respond to a Reuters request for comment.

In February of last year, Toast raised $400 million in a funding round led by investment firms TPG and Tiger Global Management, among others, taking its valuation to $4.9 billion.

The restaurants reaching out on Valentine’s day’

For those who are single, tired of the competitive romanticism of a regular Valentine’s Day dinner, or just want a special treat, Britain’s chefs have an alternative for you.

Ruth Smith
image caption”It means I’m really looking forward to Valentine’s Day,” says Ruth Smith

Eateries from local cafes to Michelin-starred restaurants are packaging up special dinners as a treat, in a bid to keep customers coming back when the pandemic is over.

Rather than takeaway outlets, these are sit-down restaurants which have had to adapt to lockdown.

For Ruth Smith, who lives in East Molesey, near London, it’s an opportunity for a fancy meal on Valentine’s Day without being surrounded by loved-up couples.

“I definitely wouldn’t have ordered a special restaurant meal as a treat, I would have probably got to takeaway,” she told the BBC. ” I think, to be honest, it’s not really something that I was aware was an option.”

But this Valentine’s Day she will be getting a three-course meal kit from her local cafe, choosing from twice-baked cheese souffle with fennel and apple salad, individual beef Wellington, vanilla panna cotta with cardamom, and rose infused streusel.

“It means I’m really looking forward to Valentine’s Day rather than kind of thinking, oh I’m going to be on my own and really not concerned at all this year.”

Chris and Vicky Saynor
image captionVicky and Chris Saynor say enjoying a high-end meal at home is an attractive prospect after home schooling their children

Beyond buying each other a card, Vicky and Chris Saynor from Hertfordshire are also not regular Valentine’s Day devotees.

“We made a pledge when we first got together that we just think it’s really expensive to do anything around Valentine’s Day, so it’s something that we don’t tend to celebrate,” says Ms Saynor.

But after many weeks of home schooling their four children, it’s time for a treat she says.

“They’ve designed it to be a very luxury product, so we’re having beef Wellington, macrons, and they’ve made a special cocktail which will get in little jars.”

“It’s a really premium products that they’re using and therefore the price tag fits that but obviously for them they’re missing out on one of the busiest days of the year for them for trade so that’s why we thought we’d do it.”

Thom Parris
image captionThom Parris of Next Door Records says his business was opened during the pandemic, so adapting has been easier than it might have been

Thom Parris of Next Door Records in London said his Valentine’s Day meals are mainly about nurturing relationships with customers, as well as customers’ relationships.

He and some friends dreamed up a cafe and record shop and set it up six months ago.

“We’re not allowed to have anybody in the shop – we’ve been rolling out food home kits once a week,” he says.

Today’s kit will feature duck confit paired with a red wine followed by chocolate strawberries.

“It takes a lot of management of everything, but for us, I think it’s the most rewarding things we’re doing at the moment where we can still continue relationships with customers.”

andreas antona
image captionAndreas Antona says delivering high-end food to his customers has come as a rare opportunity in a difficult year.

Andreas Antona, who owns the upmarket Simpson’s restaurant in Edgbaston, Birmingham, says home delivery is a ray of sunshine ain an otherwise abysmal market. 

“It’s been the worst year ever,” he says. “I’ve grown up in this industry, I’ve never known anything like it.”

“And, in particular, this year, 2021 has been harder, the first lockdown seemed to be a bit of a breeze compared to what’s going to possibly happen going forward, so yeah, it’s getting into a very difficult place.”


He started his home delivery service in May. Like Mr Parris, he aims to keep customers onside in the hope of luring them back after lockdown ends.

He is offering a starter, Beef Wellington ,pudding and a cheese course, or Cornish lobster soup followed by a chicken dish. Those looking to really lash out can buy caviar, truffles and wine.

“You know, people are really going to town on this and it’s something to look forward to, and it breaks up the monotony of just being at home, so it helps everyone, I think.”

Customers will reheat, finish and plate the food, he says, which offers a chance for some creativity.

By Katy Austin

Covid: Alcohol ban for Welsh pubs and restaurants from Friday

Welsh pubs, restaurants and cafes will be banned from serving alcohol from Friday and will be unable to open to customers beyond 18:00 GMT.

Woman in bar
image captionPubs will have to close to customers at 18:00, and will not be able to serve alcohol

First Minister Mark Drakeford announced the new rules to tackle a rise in coronavirus cases.

Indoor entertainment and visitor attractions, including cinemas, museums and galleries, will also have to shut.

Mr Drakeford said without changes there could be between 1,000 and 1,700 preventable deaths over the winter.

Businesses will be allowed to provide a takeaway service after 18:00 for food or non-alcoholic drinks.

Traders described the news as a “major blow” to indoor entertainment and hospitality firms.

The Conservative leader in the Senedd, Paul Davies, said the national approach from the Welsh Government was unfair on areas with low Covid rates.

Plaid Cymru’s Rhun ap Iorwerth said the Welsh Government should provide support to allow the hospitality and tourism industries to “hibernate” for the winter.

The first minister said firms hit by the restrictions will be offered £340m in support – he claimed it was “the most generous package of financial assistance anywhere in the UK”.

Mr Drakeford said: “I am very grateful for everything the sector has done.

“I know these new restrictions will be difficult, coming as they do at the one of the busiest times of the year for the sector.

“Unfortunately, we continue to face a virus which is moving incredibly quickly across Wales and a virus that will exploit every opportunity when we spend time with one another.”

Covid-19 restrictions in Wales

The restrictions come into effect at 18:00 on Friday, and are similar to the restrictions on hospitality within level three areas in Scotland.

The decision will be reviewed on 17 December. As well as cinemas, bingo halls, bowling alleys, soft play centres, casinos, skating rinks and amusement arcades will have to close.

Meanwhile current restrictions on travel into England, implemented while a lockdown is in place over the border, is being reviewed.

The first minister said he will make a further announcement later this week.

What is the reaction?

Cerys Furlong
image captionCerys Furlong runs The Grange pub, the Milkwood restaurant and The Lansdowne pub in Cardiff

Ben Francis, of the Federation of Small Business, said: “There is no getting away from the fact that today’s announcement will come as a devastating blow to those indoor entertainment and hospitality firms that have fought tooth and nail to protect jobs, remain viable and provide a safe environment for their staff and customers this year.”

He said it was “incredibly important” that promised funding “can be rolled out as a matter of urgency”.

Cardiff restaurateur and pub owner Cerys Furlong said not being able to serve alcohol and early closing means that trading will be a “long way from viable for the majority of the sector, particularly in this Christmas period, which is crucial to the success or otherwise of most businesses in hospitality”. 

“However, we welcome the support funding from Welsh Government which we understand is intended to reflect more closely the scale of the challenges we face.”

Pub in Wrexham
image captionHospitality businesses are being offered extra support, the Welsh Government said

Hospitality businesses were allowed to open after the firebreak ended earlier in November.

The first minister said there is evidence for the need of the new restrictions.

“When people meet together in a hospitality setting, you’re not just having a glancing encounter with somebody as you do if you’re going round a supermarket,” he said.

“You’re sitting together with people for a significant period of time.”

Mr Drakeford said scientific and medical experts had warned that by 12 January, the total number of people with Covid in hospital could rise to 2,200 “unless we respond now”.

The case rate has risen from 187 per 100,000 people over seven days on Friday, to 210 cases per 100,000 people.

What business support will be available?

The £160m “Restrictions Business Fund” will offer firms in the hospitality, tourism and leisure sectors that pay non-domestic rates (NDR) grants of up to £5,000.

The Welsh Government estimated around 60,000 businesses with a rateable value of under £150,000 would receive the support.

A “sector-specific” £180m Economic Resilience Fund would be made available for hospitality, tourism and leisure businesses.

The Welsh Government said small and medium sized businesses meeting the criteria could receive up to £100,000, while larger firms could receive up to a maximum of £150,000.