The Restaurant Group raises £57m to fight sales slump

The Restaurant Group, behind the Frankie & Benny’s and Wagamama​ chains, on Thursday said it has raised £57 million to bolster its finances ahead of an expected sales plunge this year.

Today’s update on the funds, raised through a share placing, came after the casual dining business warned last night on how Covid-19 and enforced restaurant closures are hurting.

The coronavirus outbreak marks the latest troubled chapter in the career of its chief executive Andy Hornby, who was a key figure in the financial crisis. Hornby was at the helm of banking giant HBOS when it became a victim of the crash.

The Restaurant Group, which had debts of £286.6 million as at December, had already been grappling with weaker consumer confidence and high business rates when Hornby​ joined last year. It has had to close sites due to lockdown and put its Chiquito arm into administration since the virus emerged.

It told the City a potential “pessimistic scenario” for the year to December 31 would see sales drop 50%. That is based on the assumption all of its restaurants and pubs remain closed until the end of June, followed by a gradual reopening of most its sites.