TRG pays Big Table Group £7.5m to take on leisure division

11-Sep-2023 - Last updated on 11-Sep-2023 at 09:23 GMT

The Restaurant Group (TRG) has announced it will sell its leisure division to the Big Table Group (BTG).

The deal will see BTG pay a nominal fee of £1 for the estate, which comprises 75 sites primarily under the Frankie & Benny’s and Chiquito brands, while TRG will pay a cash contribution of £7.5m to Big Table, subject to certain cash, debt and working capital adjustments.

The transaction is expected to complete in early Q4 2023, and by 31 March 2024.

“Creating, developing and acquiring brands that complement our existing portfolio whilst offering widespread consumer appeal is a fundamental part of our growth strategy,” says Alan Morgan, CEO of the Big Table Group, which operates the Las Iguanas, Bella Italia, Café Rouge, Banana Tree, and Amalfi brands.

“This exciting acquisition forms part of that strategy and we are delighted to be welcoming this new team into The Big Table Group.”

TRG says the deal will ‘significantly accelerate’ its core strategic goals of adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) margin accretion and deleveraging, which forms part of its medium-term plan to build back profits following a 'significant deterioration' in its EBITDA margin.

The group, which has faced months of pressure from activist investors, some of whom have called on TRG to offload its leisure estate, reported strong like-for-like (LFL) sales growth last week for the first half of the year (H1) with group revenue up 10% and adjusted EBITDA up by 15%.

It adds that the transaction will ‘create a high-quality retained group’ consisting of its Wagamama division; its pubs estate, which comprises the Brunning & Price brand; and its airport-based concessions business.

All three divisions posted a LFL sales rise in TRG's H1 results. In contrast, its leisure estate traded below the market and achieved a year-to-date LFL sales decline of 3%.

“A sale of our leisure business significantly accelerates our medium-term strategic plans to increase adjusted EBITDA margins and reduce leverage,” says Andy Hornby, CEO of TRG

“On behalf of TRG, I would like to express our massive thanks to the extraordinarily hardworking and dedicated teams across the leisure business who have made huge improvements in the customer proposition over the last few years.

“We wish them all well as part of the Big Table Group.”