Wagamama outperforms rivals with double-digit sales hike

January 3, 2019

Restaurant chain Wagamama has dished up a double digit hike in half-year sales and earnings less than two months after its £559 million takeover.

The group posted a 10% hike in UK like-for-like sales over its first half to November 11 and said underlying earnings rose 9.9% to £25.9 million.

It was boosted by a 12% surge in UK like-for-like sales in the second quarter.

The figures follow its takeover in November by Frankie & Benny’s owner, The Restaurant Group, although they cover the period before the deal was secured.

Emma Woods, newly appointed chief executive of Wagamama, said: “We want Wagamama to be special, both the bowl and the soul, and so have continued to invest in our amazing teams, our vegan food and our customer service this quarter.

The business is well prepared for, and excited about, the next stage of its development, with The Restaurant Group as our new owners

Emma Woods

“As a result, we have sustained our outperformance of the UK market.”

She added: “The business is well prepared for, and excited about, the next stage of its development, with The Restaurant Group as our new owners.”

The group said total turnover rose 13.7% to £178.9 million over the half-year, helped by the like-for-like sales increase and five restaurant openings in the UK, taking the total to 134.

It also refurbished 14 restaurants and opened new franchise eateries in Qatar, Norway, Italy, the United Arab Emirates and Spain, giving it a worldwide total of 198.

But figures showed that hefty refinancing costs hit the group’s bottom line, with pre-tax losses of £4 million recorded, though this is half the £8.2 million loss seen a year earlier.

Related: Fast Food Franchises in the UK – 10 Things Every Would-Be Franchisee Must Know

The recent Restaurant Group deal raised eyebrows, coming at an increasingly challenging time for the eating-out sector, which is suffering from a slowdown in consumer spending.

But Wagamama has out-performed its rivals and claims to have beaten the market for nearly five years.

However, there was still significant opposition to its takeover despite being approved by Restaurant Group shareholders.

Just under 61% of shareholders supported the deal, which is being paid for
through a combination of a £315 million rights issue and a £220 million
revolving credit facility.

Former private equity owner Duke Street made an impressive return on its investment, having bought Wagamama in 2011 for £215 million.

It was revealed last month that about 4,000 Wagamama staff are sharing a £4 million bonus pot as part of a payout ordered by former chief executive Jane Holbrook and Duke Street following the takeover.

Source: Belfast Telegraph

Frankie & Benny‘s owner to buy Wagamama in £559m deal

December 3, 2018

The takeover will see The Restaurant Group (TRG) swallow up the Wagamama business, founded in 1992, which now has nearly 200 outlets, most of them in the UK.

It comes as the new owner seeks areas of growth during a challenging period for the UK‘s casual dining sector, with the likes of Gaucho, Prezzo and Byron struggling.

The Restaurant Group‘s chief executive Andy McCue described the Wagamama deal – which is expected to be completed by mid-December – as “an exciting and transformative opportunity”.

He added: “Wagamama is a fantastic brand, with a market leading pan-Asian proposition, which has consistently outperformed the casual dining market in recent years.”

The deal sees TRG pay £357m in cash and assume £202m in debt. It will be funded partly through a £315m cash call on the group‘s shareholders. Shares fell 17%.

Image: The Restaurant Group owns businesses such as Frankie & Benny’s

Wagamama will operate as an autonomous part of the group with current chief growth officer Emma Woods becoming chief executive and chairman Allan Leighton set to join the TRG board as a non-executive director.

TRG said it would accelerate the brand‘s UK expansion including in some cases by converting existing sites into Wagamama restaurants, as well as piloting new “food to go” offerings and exploring international growth.

Wagamama currently has 133 UK restaurants plus five in the US and 58 franchise sites across Europe, the Middle East and New Zealand.

It employs more than 6,000 people and reported revenue of £307m and underlying earnings of £43m last year.

Wagamama is being sold by private equity firm Duke Street, which bought the chain in 2011 for £215m when it had 70 restaurants.

TRG has 381 casual dining restaurants under a number of brands plus more than 60 pubs and also operates dozens of concessions at airports and railway stations. The group employs more than 15,000 people.

The group has endured a tough time in recent years with a series of profit warnings culminating in a boardroom overhaul. Performance has stabilised since the appointment two years ago of former Paddy Power executive Mr McCue as its boss.

It has shaken up its offering by cutting prices and introducing more budget options.

The group disclosed in its takeover announcement that like-for-like sales so far this year were down by 2.2% but added that they were up 1.4% in the 14-week period since the end of the World Cup.

Source: Herdon Gazette

Just how big is the Wagamama business in the UK and worldwide?

October 31, 2018

Wagamama is one of the casual dining sector’s greatest success stories to date.

Founded in London in 1992 with a focus on pan-Asian inspired cuisine, the company’s restaurant portfolio comprises 138 directly-operated restaurants in the UK and the US and 58 franchised restaurants in Europe, the Middle East and New Zealand.

Wagamama has a commitment to fast-cooked, fresh and healthy pan-Asian cuisine. Its focus is on feeding the ‘mind, body and soul’, meaning the food must both ‘look and taste beautiful’.

All food is freshly cooked in its open kitchens and customers may personalise any dish. The menu includes a range of accessible, entry-level dishes – under £5 for small dishes or £10 for mains – alongside more expensive options.

Wagamama’s UK restaurants are spread geographically and are in a mixture of locations. Towns and cities (excluding London) account for 41% of the total UK restaurant estate, shopping centres account for 32%, London (excluding shopping centres) account for 25% and airports account for 2%.

The UK restaurants are all in leased properties averaging approximately 4,300 square feet in size, and approximately half have been extensively refurbished over the last three years.

Related: Fast Food Franchises in the UK – 10 Things Every Would-Be Franchisee Must Know

Wagamama opened its first restaurant in the US in 2007.  Since then it has grown its US footprint to five directly-operated sites.

Its US business has a local management team and manages its own supply chain and operations, although it continues to leverage the UK head office and infrastructure where needed.

Additionally, Wagamama has a presence in Europe, the Middle East and New Zealand via 58 franchised restaurants in 23 countries. Franchise arrangements are with a variety of partners, which each have exclusivity for a specific territory.

Franchisees operate their own supply chain using a mixture of Wagamama’s suppliers (under their own contracts) and their own suppliers.

Wagamama’s sites have a predominantly long leasehold property asset base. 73% of sites currently have greater than 10 years left on their lease contracts.

The company headquartered in London and employs more than 6,000 staff. For FY 2018, Wagamama reported revenues of £306.7m and generated EBITDA after pre-opening costs of £43m.

Source: Foodservice Equipment Journal

Frankie & Benny’s owner to buy Wagamama in £559m deal

October 30, 2018

The company behind the Frankie & Benny’s and Chiquito restaurant brands has agreed to buy the Wagamama chain in a £559m deal.

The takeover will see The Restaurant Group (TRG) swallow up a business, founded in 1992, which now has nearly 200 outlets, most of them in the UK.

It comes as the new owner seeks areas of growth during a challenging period for the UK’s casual dining sector, with the likes of Gaucho, Prezzo and Byron struggling.

The Restaurant Group’s chief executive Andy McCue described the Wagamama deal – which is expected to be completed by mid-December – as “an exciting and transformative opportunity”.

He added: “Wagamama is a fantastic brand, with a market leading pan-Asian proposition, which has consistently outperformed the casual dining market in recent years.”

The deal sees TRG pay £357m in cash and assume £202m in debt. It will be funded partly through a £315m cash call on the group’s shareholders. Shares fell 17%.

Frankie & Benny's
Image:The Restaurant Group owns businesses such as Frankie & Benny’s

Wagamama will operate as an autonomous part of the group with current chief growth officer Emma Woods becoming chief executive and chairman Allan Leighton set to join the TRG board as a non-executive director.

TRG said it would accelerate the brand’s UK expansion including in some cases by converting existing sites into Wagamama restaurants, as well as piloting new “food to go” offerings and exploring international growth.

Related: Just how big is the Wagamama business in the UK and worldwide?

Wagamama currently has 133 UK restaurants plus five in the US and 58 franchise sites across Europe, the Middle East and New Zealand.

It employs more than 6,000 people and reported revenue of £307m and underlying earnings of £43m last year.

Wagamama is being sold by private equity firm Duke Street, which bought the chain in 2011 for £215m when it had 70 restaurants.

TRG has 381 casual dining restaurants under a number of brands plus more than 60 pubs and also operates dozens of concessions at airports and railway stations. The group employs more than 15,000 people.

The group has endured a tough time in recent years with a series of profit warnings culminating in a boardroom overhaul. Performance has stabilised since the appointment two years ago of former Paddy Power executive Mr McCue as its boss.

It has shaken up its offering by cutting prices and introducing more budget options.

The group disclosed in its takeover announcement that like-for-like sales so far this year were down by 2.2% but added that they were up 1.4% in the 14-week period since the end of the World Cup.

Source: Sky