Wagamama Owner Warns Of Difficult Few Months Ahead
Britain's The Restaurant Group, which is the owner of the Wagamama and Frankie and Benny's chains, has warned of an extremely difficult few months ahead as restrictions to curb the spread of the COVID-19 pandemic hammer the hospitality sector.
The company has already permanently shut 250 restaurants and cut approximately 3,000 jobs, but said that ongoing restrictions will take a heavy toll on its business.
The Restaurant Group, which operates more than 350 restaurants and pubs across the United Kingdom, said that under the latest guidelines it will only have approximately t 145 sites open for dining in.
"This will have a severe adverse impact on the group if this remains in place for the first quarter of 2021 with monthly losses, we estimate, of about five to six million pounds per month," Liberum analyst Anna Barnfather said.
Shares of the FTSE small-cap firm have lost over 60% of their market value this year.
The Restaurant Group, which has received £50 million in government assistance and carried out a share placing to help cope with the crisis, said that its cash-burn during November's lockdown in England was approximately £5.5 million to £2 million higher than during a lockdown in the spring.
Expecting "Trading Conditions To Remain Tough"
"We expect trading conditions to remain tough while social restrictions are in place," analysts at Stifel said. "But second half  promises something like a return to normal, assuming COVID vaccines are rolled out as planned."