Restaurant Group upgrades FY21 outlook despite Omicron

The Restaurant Group has announced that despite the impact of Omicron in December, it has upgraded its FY21 expectations following a market “outperformance”, and now expects its EBITDA to be at the top end of its previous guidance of £73m – £79m.

In addition, FY21 year-end net debt is now expected to be less than £180m, when it was previously expected to be less than £190m.

The group said the positive update followed what was a period of good cost control and continued strong trading relative to the market.

Nonetheless, the group was not immune to the effects of Omicron and the implementation of Plan B restrictions over the period, which included advice to work from home, calls for further caution in socialising and increased testing requirements for international travel, all of which reduced consumer confidence and put additional restrictions on hospitality. 

The impact of these factors were seen across its trading figures for December. Wagamama, for example, saw a growth of 11% and 8% in October and November, respectively, but only a growth of 1% in December. 

Its Leisure sector meanwhile welcomed a growth of 16% and 8% in October and November, but a decline of 2% in December. 

In addition, its Pubs business was hit by a 7% decline in growth in December, despite seeing rises of 9% and 7% in October and November, respectively. 

The group said: “Whilst we are encouraged with the recent Government announcement that all ‘Plan B’ restrictions will be lifted next week, we expect consumer confidence may take longer to recover.  We are also mindful that the recovery in air passenger volumes remains dependent on the timing of changes to both UK and International restrictions.

“Despite the near-term uncertainties, the board remains confident in the group’s prospects given the strength of our brands, substantially reduced net debt and outperformance versus the market.”