Profits fall at The Restaurant Group after £559m Wagamama merger

Joe Curtis
Follow Joe
Food Network & Cooking Channel New York City Wine & Food Festival Presented By Coca-Cola - Rooftop Iron Chef Showdown: Battle Autumn Bounty hosted by Alton Brown
Wagamama should be 'transformative' for The Restaurant Group, it believes (Source: Wagamama)

The Restaurant Group has posted a drop in profits for last year as well as warning of falling like-for-like sales, but said its controversial takeover of Wagamama will prove “transformative”.

Read more: Like-for-like sales fall at The Restaurant Group despite Wagamama boost

The figures

Adjusted profit before tax slipped eight per cent year on year to £53.2m, while revenue ticked up one per cent to £686m despite a two per cent decline in like-for-like sales.

Operating cashflow fell from £107.8m in 2017 to £88.3m last year after its £559m Wagamama acquisition, with net debt ballooning to £291.1m, up from £23.1m in 2017.

Earnings per share lost two-thirds of their value, down from 6.7p in 2017 to 2.4p.

The board has proposed a final dividend of 1.47p per share.

What The Restaurant Group said

Chief executive Andy McCue said: “We have made significant progress in 2018, acquiring a differentiated, high growth business in Wagamama, opening a record number of new sites in both our pubs and concessions businesses, and driving improved like-for-like sales momentum in the leisure business throughout 2018.

Read more: The Restaurant Group shares fall as boss steps down

“We now have a business that is orientated strongly towards growth and we continue to focus on delivering shareholder value.”

More to follow.