The Wagamama, Frankie & Benny’s and Chiquito operator’s banks will not run the usual covenant test at the half-year stage, while one bank, Santander, has increased its facility to Wagamama by £15mln to £35mln.
A large proportion of the group’s restaurant staff have been furloughed under the government’s coronavirus job retention scheme, while other names in the industry have collapsed.
Both executive directors, chief executive Andy Hornby and chief financial officer Kirk Davis, have taken pay cuts for the three months from April, of 40% and 20% respectively, and both also gave up bonuses that were due to paid last week.
Non-executive directors have also proposed to reduce their fees by 40%, with one of the six, Mike Tye, also offering to step down.
Overall this will save around £0.6mln, analysts at Peel Hunt calculated.
Last month, the group said fixed rents will halve since many of them are based on turnover, while they expect to also take part in the business rates holidays under the government’s emergency measures package.
Restaurant Group should have sufficient liquidity almost to see out the rest of 2020 under closure, Peel Hunt’s analysts said, which is “very different to many private restaurant chains”, pointing to the administration of Carluccio’s and potential collapse of GBK.
Shares in Restaurant Group were up 5% to 37.65p on Monday morning.
–Adds broker comments and share price–