Wagamama owner The Restaurant Group agrees £340m debt terms with lender

The Restaurant Group has announced an amendment and extension of its debt facilities, with a revised £340m package.

On Thursday, the owner of the Wagamama and Frankie & Benny’s brands said the new deal comprised of a £220m term loan facility and a £120m revolving credit facility with its existing lenders.

The new terms represented an early repayment of its previous facilities by around £21m.

The London-listed leisure operator said it continues to have a strong liquidity position with over £140m of cash headroom.

This provides the Group with an additional two years of debt facilities with the maturities of the Term Loan and the RCF extended to April 2028 and March 2027, respectively.

In a note to investors, wealth management group Investec said it believed the hospitality firm “remains one of the best positioned UK leisure companies into 2023.

“We believe RTN has a strong brand in Wagamama, has a solid cost and investment control plan and has low leverage,” the note added.

The group saw its share price boosted by more than one per cent in afternoon trading on Thursday. Its share price has taken a hit of 66 per cent this year to date.

In half-year results this autumn, The Restaurant Group said it had seen sales surge but warned that an “uncertain consumer environment” looms. 

Total sales hit £423.4m in the 26-week period to 3 July, versus £216.8m in 2021.

Diners returned to the group’s restaurants and pubs after the easing of Covid restrictions, with an adjusted EBITDA of £41.7m.

This was compared to £11.2m in 2021, when the country’s hospitality venues were closed for a number of months.

The business also swung back into profit, posting an adjusted profit before tax of £10.2m versus a loss of £19.9m in 2021. 

“Whilst the uncertain consumer environment presents challenges for the hospitality sector, the group is well positioned to further develop our brands to deliver long-term growth for all stakeholders underpinned by our strong balance sheet,” ​​Andy Hornby, chief executive officer, said.