TRG faces new investor pressure
In the latest of a series of interventions made by investors against the beleaguered casual dining chain, Coltrane Asset Management called on TRG to be ‘open to all strategic options’.
Speaking to The Sunday Times, the New York-based investor said it backed proposals made by other shareholders for the group to sell off its Brunning and Price pubs and airport concessions business.
“We think there is significant value to be unlocked in the company, and that the board and management need to be open to all strategic options,” Coltrane said.
The comments follow a tough few weeks for the Wagamama and Frankie & Benny's owner ahead of its AGM on 23 May.
In a separate campaign, Oasis Management and Irenic Capital Management, who are both significant shareholders in TRG, have released public statements pledging to vote against the group’s executive remuneration policies at the AGM.
They have each called for TRG to overhaul its current pay scheme, particularly with regard to CEO Andy Hornby’s salary, saying it does not incentivise business performance or shareholder value.
Hornby’s salary increased to £674,450 for 2023, up from £658,000 in 2022. He also receives an additional bonus of up to £1m based on performance.
ISS and Glass Lewis have also recommended voting against the pay packets.
In addition to this, Irenic has suggested TRG dispose of its ‘non-core assets’ and focus its attention solely on owning and growing the Wagamama brand.
Last week, though, TRG received a welcome boost by securing the backing of Columbia Threadneedle Investments, a US-based asset management firm that holds around 19% of the group’s shares and is its largest stakeholder.
“As a long-term shareholder in The Restaurant Group (TRG), we remain supportive of TRG’s board and management team, who have successfully navigated the exceptionally tough industry backdrop,” the firm said in a statement.
Columbia’s comments followed a positive trading update from TRG and a note from Shore Capital, which saw the group’s shares increase 7%.
Shore Capital said TRG was ‘making progress’ with continued robust trading comfortably ahead of full year estimates.
It continued that cost savings and accelerated exits meant the group was tracking ahead of its margin improvement plan, meaning it can achieve EBITDA of up to £130m.
A spokesperson for TRG said: “As you will have seen from last week’s trading update, the market’s reaction and upgrades from the analysts, we will continue to let our numbers do the talking.”
