The Restaurant Group plc

Further Covid-19 update

The Restaurant Group plc ("Group" or "TRG") today provides a further update on the evolving impact of Covid-19 and the associated government restrictions on the Group.

Impact of November national lockdown

Through a range of decisive management actions, cash-burn during the November national lockdown was minimised to c. £5.5m for the month.  This is £2.0m higher than during the first lockdown due to  rents payable under the terms of the Leisure CVA[1] as well as employer contributions towards furlough payments.  Additionally the working capital outflow and increased cash exceptional costs as a consequence of the November lockdown totalled  £15m.

Number of sites classified under current tier restrictions

The Group notes the recent announcement by the UK government on the latest tiering restrictions, which come into effect on 19 December 2020.  Following on from earlier announcements by the English, Scottish and Welsh governments over recent months, the Group anticipates further significant disruption on trading whilst these restrictions remain in place.  

As per the latest tiering restrictions announced by the UK government, The Group will have approximately 145 sites which will trade for dine-in across the UK , 142 sites which will provide delivery and takeaway services only, with the remaining 103 sites closed.  This is significantly worse than when the initial tiering restrictions came into effect, as illustrated in the table below:

*Relates to sites where due to restrictions trading would be uneconomical

Clearly the mix of locations impacted across the tiers will continue to evolve, but if UK tiering allocations were to remain the same as currently in place throughout the first quarter of 2021, this will have a significant adverse impact on the Group, and indeed the wider hospitality sector.

Whilst the tiering restrictions make the outlook for the first quarter of 2021 extremely challenging, the Board is encouraged by the welcome news of the Covid-19 vaccine being rolled out in the first half of next year. The Board believes the Group is well positioned to benefit from a sustained removal of restrictions given its previous strong trading performance following the first lockdown.  We therefore expect a strong recovery when there is a return to more normal levels of customer activity.  The timing of that will depend primarily on government restrictions being eased.  

[1] Relating primarily to the Frankie and Benny's brand

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Notes

1.    The 2020 Financial Year will be a 52 week period ending 27 December 2020