There was speculation TRG was set to potentially offload Brunning & Price but has stated it will look to exit 35 sites in its Leisure division, which includes Frankie & Benny’s, Chiquito, Coast to Coast, Filling Station and Firejacks.
TRG stated its Pubs category along with Wagamama and Concessions (f&b sites mainly in airports) fared better than market competitors in financial year 2022 (FY22) v 2019 comparatives, while the business, as a whole, recorded total sales of £883m (2021: £636.6m), adjusted earnings before interest, taxation, depreciation and amortisation (EBITDA) profit of £83m on a pre-IFRS 16 basis (2021: £81.2m), adjusted profit before tax of £20.3m on a pre-IFRS 16 basis (2021: £16.6m) and statutory loss before tax of £86.8m on an IFRS 16 basis (2021: loss of £35.2m).
Meanwhile, TRG’s net debt was £185.7m on a pre-IFRS 16 basis (2021: £171.6m).
On current trading, lfl sales for Brunning & Price were up 9% for the 8 weeks from 2 January to 26 February 2023 v the same period in 2022 while lfls at Wagamama were up 2% and 8% at Concessions but 4% down at Leisure sites.
Resilient core offering
The medium-term strategy for its Pubs arms is to drive continued strong lfl sales growth, based on the strength of its operating model and resilient core offering.
Reviewing its Pubs division, TRG said: “Our Brunning & Price Pubs business is a premium food-led concept and also has had a consistent and strong track record of market lfl sales outperformance pre-Covid.
“The business delivered an exceptional performance in FY22, delivering LFL sales growth of 10%, representing a 11% outperformance versus the market. Customer sentiment remains strong with social media scores (consolidation of Google, Facebook and TripAdvisor scores) averaging approximately 4.5/5 for 2022, maintaining our highest rating over the past five years.”
It cited core drivers for success as attractive customer demographics, well-invested locations and a localised business model with strong execution.
It added the business also benefits from strong asset backing with approximately 50% of its pubs being freehold. In August 2022, the freehold pub estate was valued at £160m.
Expansion to resume when costs moderate
TRG said: “Our expansion plans will resume when capital costs of quality pub assets moderate and new sites meet our returns thresholds. Our focus for the year ahead will be to continue to drive lfl sales growth with the core B&P model proving extremely resilient and exploring opportunities to increase our accommodation offering.”
On its planned Leisure category disposals it said: “We plan to exit c35 potentially loss-making locations over the next two years through a combination of exercising break clauses, lease expiries, selective conversions and accelerated disposals.”
The move will see the Leisure estate reduce by about 30% from 116 sites to 75 to 85 by 2024.
TRG chief executive Andy Hornby summarised: “We’ve delivered a strong operating performance for the year in a market which has continued to pose a number of headwinds for casual dining operators.
Current trading has been very encouraging to the great credit of our teams who continue to ensure our customers receive the best experience possible.
We have a clear plan to increase EBITDA margins over the next three years and deliver significant value for all our stakeholders.”
