Casual Dining Group announces positive current trading and prior year results for 2017/18

Apr 09th

Casual Dining Group (“CDG”), the operator of c.280 mid-market restaurant brands including Las Iguanas, Bella Italia and Café Rouge, reports its annual results for the prior year (year ended 28 May 2018), and provides an update on current trading. The group also announces 7 new UK openings and a further 7 franchises openings in Ireland and the Middle-East in 2019 and is embarking on a major refurbishment of the core estate which will cover 30 sites.

Steve Richards, CEO of Casual Dining Group, commented:

“Over the past 18 months we have taken proactive steps to underpin the company’s future growth potential, at a time when the sector has faced unprecedented challenges. We successfully refinanced with our existing shareholder and lender group, reached positive agreements with our property partners, and invested and diversified across our brands. Despite the ongoing market challenges, Casual Dining Group has outperformed the market over the past 11 months, recording like for like sales increase of 2.6% with an improving trend of a 4.2% increase in like for like sales for the 13 weeks since the New Year.

The historic performance in the prior year, reflects the difficulties the wider sector faced but we are confident that our proactive measures, the support of our shareholders, and our diversification by brand, channel and geography mean CDG is strongly positioned.”

Current Trading highlights

  • Stable like for like trading of 2.6% for the 11 months since June 2018 – with a particularly encouraging start of the 2019 calendar year with like for like sales increase of 4.2% for the 13 weeks since the start of the year
  • Successfully negotiated new terms with landlords following refinancing
  • 7 new franchise openings in Ireland and the Middle East
  • Significant investment in UK estate planned with 30 major refurbishments

Operational highlights

  • Increased diversification by channel;
    • Double digit delivery growth: dedicated brands e.g. Blazing Bird via partnerships with Deliveroo, Just Eat and UberEats
    • Partnerships with Tesco, Three Mobile and Cineworld delivering double digit growth
  • Digital-first approach and strong brands continue to drive bookings and growth
  • Significant external cost increases partly mitigated by procurement savings, productivity improvements and cost efficiencies
  • Continued investment in menu development, food and drink quality, and innovation

Prior Year Financial Summary 2017/18 

  • Revenue of £327.4m down 0.5% (2017 £329.0m)
  • Un-invested like for like decline[1] of 0.6%,
  • Adjusted[2] EBITDA down £4m, from £29.9m to £25.9m

Prior year balance sheet and capital structure overview

  • Restructured balance sheet to position the business for growth with low gearing and access to funding from existing shareholders, as required
  • £30m cash injection to fund future growth projects
  • Following a mark to market revaluation by the lender group, the balance sheet was restructured resulting in a non-cash, goodwill write-down of £209.6m
  • Concluded successful discussions with landlords to optimise estate for profitable growth.

[1] Uninvested with no excluded sites

[2] Adjusted for non-recurring and one-off items