Wagamama owner predicts coronavirus will see 25% fall in annual sales

The Restaurant Group, behind Wagamama, Frankie & Benny's and Chiquito, has predicted coronavirus will hit yearly sales by 25%.

Sales in the first six months of the year are expected to fall by 45%, with a 5% reduction in the second half of the year, on the prediction that coronavirus will cause a 10-week shutdown.

The group expects its concessions business, based in transport hubs, will be hardest hit with predicted quarter two sales down 92%.

To protect profitability and cash flow, the group has said it will reduce capital expenditure for the year by at least £45m, from previous guidance of £75m. A further £45m is hoped to be saved through efficiencies.

The business will also look to secure a minimum 50% rent reduction across its estate and liaise with banks to secure covenant holidays.

Within the trading update the business added: "Clearly the situation is evolving rapidly and there is no certainty around the severity and duration of the impact on the business. The company is continuing to consider its funding options, both equity and debt, on an ongoing basis.

"The Restaurant Group is fundamentally a resilient business with a strong asset base, substantial cash liquidity and strong cash flow. The group has a strong management team in place and the capability to adapt and respond quickly to changing market conditions.

"The board remains confident in the strategy over the longer term and believes the group will be well positioned to benefit from the normalisation in trade with its diversified set of brands."