Restaurant Group PLC (LSE:RTN) swung to an underlying profit in the first half as it said its Wagamama chain outperformed a challenging market and has hedged all its energy costs out to the end of 2024.
An adjusted pre-tax profit of £10.2mln was reported for the 26 weeks ended 3 July, compared to a loss of £19.9mln reported a year ago.
The UK casual dining market player also reduced its statutory loss before tax to £28.5mln on an IFRS 16 basis compared to a loss of £57.6mln last time, which includes exceptional charges of £42.4mln, mostly non-cash impairment charges.
After utilities inflation of £2mln above previous guidance, management decided last month to fully hedge gas and electricity bills out to the end of the 2024 fiscal year, having been 50% hedged by volume last November and 75% as of this March.
Total sales jumped to £423.4mln from £216.8mln in 2021, while adjusted EBITDA was higher at £41.7mln on a pre IFRS 16 basis compared to £11.2mln in 2021.
Wagamama like-for-likes sales grew 11% and pubs by 9%, outperforming the market by 6% and 11% respectively, with pubs helped by the summer heatwave, while concessions fell less than the market, with the 'leisure' portfolio the only restaurants to underperform, negatively affected by the heatwave.
Barburrito, the 16-strong Mexican themed chain acquired in July, also traded 13% ahead of the market on a 33-week basis to 21 August.
The company said it has a strong pipeline of new UK Wagamama restaurants with improved commercial leases, with
"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," said chief executive Andy Hornby.
Shares of the company, which in for £7mln, were trading up 0.5% at 43.21p in early trades, having fallen over 50% so far this year.