Restaurant Group expects drop in annual sales, launches equity raising

(Reuters) - Frankie and Benny's chain owner Restaurant Group <RTN.L> said on Wednesday it expects a 50% slide in total sales for the full year 2020, assuming all its restaurants and pubs remain closed until the end of June, due to the coronavirus lockdown.

The company, which operates over 650 restaurants and pub restaurants throughout the UK said in a separate statement, it is proposing to carry out a share placement of up to 19.9% of the capital, to buffer the hit from ongoing challenges raised by the spread of the virus.

"With the government indicating that social distancing measures will remain in force post lockdown, we believe that there will be a slow recovery in footfall during the rest of this financial year," Restaurant Group said.

The company said it has modelled a "pessimistic scenario" for the current financial year and expects the year-end net debt to stand in the region of 310 million pounds to 320 million pounds ($384.00 million-$396.38 million) up from 286.6 million pounds at the end of 2019.

It also reduced its capital expenditure to no more than 30 million pounds and said the group has accessed the government furlough scheme to ensure the ongoing employment of its over 20,000 employees.

The company which has been struggling with falling sales in its leisure business, temporarily suspended its dividend in February hurt by the store closures.

(Reporting by Shanima A in Bengaluru; Editing by Shailesh Kuber)