The Restaurant Group (RTN.L), the owner of 650 restaurants and pub restaurants throughout the UK, is planning to cut costs and warned that its business will be “significantly impacted” amid the coronavirus pandemic.
The group, which owns well-known restaurants such as Frankie & Benny's, Wagamama, and Chiquito, said in a statement that it before the period of the pandemic, group like-for-like sales for the first eight weeks of the financial year were up 4.5%.
However, in the last two weeks, it has “seen an increasing and material impact of Covid-19 across our businesses with Group like-for-like sales being down 12.5%.
“In particular, our Concessions business has been significantly impacted with like-for-like sales down 21.7% and getting worse by the day given International travel bans.”
It is therefore going to be cutting cost for 2020 by at least £45m ($54m), from the previous guidance of £75m.
It said it would also be working with landlords of all its business areas to ensure “no minimum guarantees are enforced within Concessions, where rents are largely turnover based; and to ensure that the rent roll for 2020 across our other businesses equitably reflects the unique and unforeseeable situation.”
It also said it will talk to the banks and seek covenant holidays throughout 2020 — a period of four consecutive fiscal quarters — on certain payments “in order to preserve maximum flexibility to operate the business through this challenging period.”
Shares in The Restaurant Group fell slightly in early trading:
On 18 March, the UK government released an ‘unprecedented’ set of financial measures to help the UK economy tackle the impact from the coronavirus.
UK chancellor Rishi Sunak said that while the coronavirus “will not be overcome by a single [financial] package,” it will take a “collective national effort.”
The package is worth 15% of UK GDP, up from a package announced last week worth 1% of GDP, and include a £330bn government-back loans and guarantees.
Watch the latest videos from Yahoo UK