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Restaurant Group swings to loss on writedowns; suspends dividend

By BFN News | 07:40 AM | Wednesday 26 February, 2020

Wagamama and Garfields owner Restaurant Group swung to a full-year loss after it wrote down the value of is assets, citing a 'chronic overcapacity' in the casual dining sector and higher labor costs. Pre-tax losses for the year through December amounted to £37.3m, swinging from a profit of £13.9m, and included a hefty £111.8m of exceptional charges. Restaurant Group closed 18 sites in 2019 out of a total of 118 sites previously identified as being in structurally unattractive locations. The company is hoping its recent acquisition of Wagamama will turn around its performance. Like-for-like sales during 2019 rose 2.7%, with total sales up 56.4% thanks to the Wagamama deal. Wagamama like-for-like sales grew 8.5% and the company said cost synergies were running ahead of plan. 'Our three growth businesses of Wagamama, concessions and pubs are all out-performing their respective markets and have clear potential for further growth,' chief executive Andy Hornby said. Hornby said the company had temporarily suspend its dividend to focus on its investment priorities. 'This will allow us to continue investing in our three high growth businesses, whilst facilitating an acceleration of our Leisure estate rationalisation and reducing our net debt,' he said. 'We have made an encouraging start to the new financial year with like-for-like sales up 5.3% for the first six weeks of 2020.' Story provided by

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