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Restaurant Group in robust shape

by LLB Reporter
16th Nov 21 11:31 am

Despite the mounting cost of living crisis in the UK things are looking brighter for Wagamama-owner Restaurant Group.

After a period when there has been very little appetite for the shares, serving up an upgrade was always likely to get a hearty welcome from the market and so it proved this morning.

Significantly, strong trading is allowing Restaurant Group to rapidly pay down debt putting it in a better place to weather any further hits to the business from the reintroduction of restrictions and/or a downturn in the economy.

“The company has clearly sharpened its proposition outperforming the wider market across Wagamama, its leisure business and the pubs division. Even its concessions in travel hubs are starting to perform better as passengers return,” said AJ Bell’s Russ Mould.

“Most shareholders will be thanking their lucky stars that Restaurant Group successfully captured Wagamama back in 2018.

“While the deal attracted some criticism at the time as being too expensive, without it, Restaurant Group would have headed into the most testing period for the restaurant industry in generations with fairly pedestrian and in some cases downright tired franchises.

“Having such a popular format at least gave Restaurant Group a fighting chance and it now seems to have emerged as a more robust business with an increasingly streamlined estate and revived fortunes.

“A more robust Restaurant Group should also benefit from the significant amount of operators which have withdrawn from the market thanks to Covid, leaving it with a greater share of Britons’ eating out spend.”


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