Wagamama-owner flags labour shortages even as it forecasts higher profit

(Reuters) -Wagamama-owner Restaurant Group forecast an increase in 2021 profit on Wednesday after it reported a first-half profit, but challenges around labour shortages and supply chain constraints flagged by the company sent its shares down 2.8%.

Pent-up demand from people stepping out after pandemic-related lockdowns eased and cost cuts have helped the company, but British retailers, cafes and restaurants are struggling with a shortage of drivers and food processing staff.

"Whilst there are some well documented sector challenges to navigate in the short-term, particularly around labour availability and supply chain, we believe the group is well positioned for the long-term," Chief Executive Officer Andy Hornby said.

The labour shortages are not unique to Britain, but Brexit made matters worse, industry groups say, with an exodus of European drivers.

Restaurant Group reported an adjusted core profit of 11.2 million pounds ($15.49 million) for the 27 weeks ended July 4, compared with a loss of 18.3 million pounds last year.

Fast-food giant McDonalds, chicken restaurant chain Nandos and KFC have all pulled some items off their British menu following the shortages, and the country's leading employers are pushing the government to take action.

Restaurant Group's shares slipped to a session low of 117.8 pence in London by 0749 GMT.

($1 = 0.7230 pounds)

(Reporting by Pushkala Aripaka in Bengaluru; editing by Uttaresh.V and Shounak Dasgupta)