Yahoo Finance Wagamama owner warns of inflation threat as sales rise
Wagamama owner, The Restaurant Group (RTN.L) said sales soared ahead of pre-pandemic levels as the hospitality sector recovers from lockdown.
Hospitality venues were shut for the first five months of last year due to COVID infections.
The group served up an improved performance for 2021 in its latest full year results on Wednesday, with sales up by around 40%.
Sales rose to £636.6m ($832m) in 2021 compared to £459.8m in 2020. This was led by a 15% growth for Wagamama and Frankie & Benny's and Chiquito chains growing at 9% and 14% respectively.
The Restaurant Group (TRG) reported that like-for-like sales at Wagamama, plus its pubs and leisure divisions, were well ahead of the 2019 comparable and outperformed the market since government rules were relaxed.
The company notes that its outperformance has continued in the first couple of months of 2022.
CEO Andy Hornby said it was a "year of substantial progress" and said current expectations for 2022 "remain unchanged, although we are mindful about the consequential inflationary impacts arising from the conflict in Ukraine".
Shares in the FTSE 250 firm (^FTMC) rose 8.6% to 75.40p in early trade on Wednesday in London.
However, TRG, which has around 400 sites across the UK and has Frankie and Benny’s and Chiquito restaurants under its umbrella, added it continued to trade at a loss of £32.9m, compared to a £132.9m pre-tax loss in 2020 amid the first coronavirus lockdown.
Underlying earnings before interest, tax deprecation, and amortisation (EBITDA) – a measure of a firm's overall performance – rose to £81.2m from £8.7m.
Net debt was cut to £171.6m from £340.4m. This was helped by a net £166.8m equity fundraising.
Wagamama has grown like for like sales 21% in the first eight weeks of the new financial year, outperforming the market by 13%, while the pubs and leisure chains were both growing at 11%.
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