Restaurant Group offloads loss-making brands Frankie & Benny's and Chiquito

(Sharecast News) - The Restaurant Group (TRG) has announced that it is selling its loss-making Leisure business, which comprises 75 trading sites, to the Big Table Group. The company only last week announced that it had "accelerated the rationalisation of the Leisure portfolio", which includes brands like Chiquito and Frankie & Benny's.

TRG is to pay Big Table, which owns a host of high street names including Las Iguanas, Bella Italia and Café Rouge, a cash consideration of £7.5m - while Big Table will pay a nominal amount of £1.



Pre-Covid, TRG's Leisure business comprised 350 sites, but has been hit hard by the cost-of-living crisis. After a restructuring of the division was announced in May 2020, TRG has reduced its exposure to this "challenged" segment of the market by cutting the portfolio to just 75 sites.

For the 2022 fiscal year, the unit made a pre-tax loss of £65m on gross assets valued at just £111m.

"A sale of our Leisure business significantly accelerates our medium-term strategic plans to increase adjusted EBITDA margins and reduce leverage," said TRG chief executive Andy Hornby.

It is expected that the sale will increase adjusted EBITDA margin by at least 100 basis points in the first full year of trading, and will be marginally EPS accretive. It also improves the leverage position, by reducing lease liabilities of £50m.

Following the sale, TRG will have three core divisions: Wagamama, Pubs and Concessions.