Wagamama owner the Restaurant Group lost £62.6m ($81.2m) in the first half of this year, but said trading since the summer had been “very encouraging.”
The company (RTN.L), which also owns Frankie & Benny’s, Chiquito, and dozens of pubs, swung to a loss before tax as the coronavirus and lockdown hammered sales. It had made a £28.1m profit in the six months to the end of June last year.
In half-year results published on Tuesday, it posted unadjusted losses of £234.7m, largely reflecting the costs of permanently closing 147 sites. Thousands of jobs were put at risk when closures were first announced in June.
The company, like other hospitality firms, now faces the fresh blow of a 10pm shutdown across the country, as well as regional lockdowns limiting social gatherings.
But its shares leapt as the company highlighted strong sales growth over the summer, boosted by the UK government’s Eat Out to Help Out subsidised meal scheme in August. Stocks were trading 7% higher in morning trading in London.
Like-for-like sales at Wagamama were up 11% year-on-year between 4 July and 20 September, reported to be a 5% outperformance versus the wider restaurant market.
Meanwhile its leisure business, which includes other chains such as the remaining Frankie & Benny’s estate, posted growth of 4%. This was “broadly in line with the market, representing strongest trading performance in over five years.”
Pubs saw growth of 14%, some 20% higher than the rest of the market, according to the Coffer Peach industry tracker cited in the Restaurant Group statement.
“It has been an extraordinary and difficult period for the hospitality sector but one in which we have pulled together to achieve a great deal,” said CEO Andy Hornby.
“Whilst the sector outlook is uncertain, and we are mindful of recent restrictions across the UK, we are confident that the actions we have taken provide us with strong foundations to emerge as one of the long-term winners.”
The company said its “long-term ambitions” included opening 54 new Wagamama restaurants in the UK, taking the total to 200, and more in the US via joint ventures and franchises.
It also hopes to increase its pub estate from 77 pubs to between 120 and 160 sites. “Our pubs business benefits from being situated in strong locations with large outside spaces and limited local competition,” it said.