Frankie & Benny's owner to close dozens of restaurants

By Yadarisa Shabong

(Reuters) -Wagamama owner Restaurant Group will slash the number of Frankie & Benny's and Chiquito restaurants by about 30% it said on Wednesday after posting an operating loss for 2022.

Its shares were down 12% in early trade, with an analyst at Stifel saying investors may be disappointed by the lack of a broader portfolio review.

The UK group's management has come under fire from investors who are pushing for changes at the company, whose shares lost two-thirds of their value last year.

"We have a clear plan to increase EBITDA margins over the next three years and deliver significant value for all our stakeholders," CEO Andy Hornby said in a statement, adding that the company was reviewing its long-term strategic options.

He stopped short of giving any details on that review.

Restaurant Group last month rejected requests from Oasis Management to conduct an independent strategic review and to give the Hong Kong-based investor, which owns a 6.5% stake, a board seat.

Oasis has criticised the board's "lack of timely and transparent communication" about its plans.

The company, which operates more than 400 restaurants and pubs mostly in the United Kingdom as well as concessions at UK airports, said it aimed to increase its core profit margins by 250 to 350 basis points over the next three years.

It plans to do this by opening more Wagamama sites, shutting or selling a few dozen locations in its leisure division which houses Frankie & Benny's and Chiquito restaurants and expanding its pub and concession businesses.

By 2024, it expects to have 75 to 85 sites in its leisure division, down from 116 at present.

Bloomberg reported on Tuesday that activist investor Irenic Capital was also pushing for change at the group.

Restaurant Group posted a statutory operating loss of 49.7 million pounds ($58.8 million) for the year ended on January 1, versus a profit of 11.8 million pounds a year earlier.

($1 = 0.8456 pounds)

(Reporting by Yadarisa Shabong and Radhika Anilkumar in Bengaluru; editing by Sonia Cheema and Jason Neely)