Wagamama proprietor lifts revenue forecast regardless of drag from leisure manufacturers

The proprietor of the Wagamama eating chain has raised its annual revenue expectations regardless of struggling a continued drag on the enterprise from manufacturers together with Frankie and Benny’s.

The Restaurant Group, which has 400 UK websites, reported a ten% rise in income over the half-year to 2 July of £467.4m.

It drove a 15% rise in adjusted core revenue to £36.3m, the corporate mentioned – including that buying and selling because the finish of the interval had continued to enhance.

It credited its Wagamama shops and Brunning & Price pubs for driving the expansion, with airport-based concessions having fun with a like-for-like gross sales leap of 29% over the 12 months up to now.

Its leisure enterprise, comprising Frankie & Benny’s and Chiquito eating places, endured a 2% decline by the identical measure.

The arm, the corporate defined, was nonetheless affected by the results of weakened demand on account of price of residing challenges amongst its core buyer base.

However, the Restaurant Group pointed to indicators of extra resilient buying and selling over the previous few weeks – aided by “a strong recent cinema slate”.

It has lowered the scale of its leisure buying and selling property and anticipated to have 76 websites on the finish of its monetary 12 months, in contrast with the 116 operated on the finish of final winter.

While saying that it now anticipated annual adjusted core income to be greater, it didn’t present a spread.

An organization-compiled consensus mentioned analysts, on common, anticipated a determine of about £77.5m.

The Restaurant Group added that the outlook for prices over the medium time period continued to enhance.

Hospitality has been hammered by a tide of rising prices because the economic system reopened from COVID restrictions, with Russia’s warfare in Ukraine including to the payments and stress on companies to go on these energy-driven will increase.

The battle has been exacerbated by the identical elements affecting wider shopper payments, with the price of residing disaster evolving this 12 months to incorporate further hits from greater mortgage and rental prices as rates of interest have gone as much as deal with the tempo of value will increase.

There is proof to recommend that shopper spending is holding up regardless of the gloomy outlook for the broader economic system.

Recent knowledge has proven a restoration for retail gross sales after a climate hit in July.

Restaurant Group shares had been up 3% on the open.

Its chief govt, Andy Hornby, advised buyers: “We are encouraged by the significant progress made in the first eight months of the year, delivering strong LFL sales growth despite the consumer backdrop.”