Pizza Express exits further 23 sites

Pizza Express has closed an additional 23 sites, on top of the 74 sites exited as part of the company voluntary arrangement (CVA).

This is due to break rights being inserted into lease agreements that were compromised as part of the CVA, giving landlords the opportunity to terminate leases.

Discussions are ongoing at a number of other sites, according to accounts published by the company.

Approximately 2,400 roles were made redundant as a result of the restructuring.

Meanwhile, Pizza Express has forecast sales will by 40% lower throughout 2021, with a slow recovery assumed in 2022.

The forecast form part of the group’s base case scenario of cash flow forecasting, following its recapitalisation and restructuring, which deleveraged its debts, provided new liquidity, implemented a CVA, and divested its mainland China business.

Pizza Express assumes delivery sales will remain stable, and then increase slightly over 2021.

The base case includes the closure of all restaurants in a third national lockdown, though this was forecast for just four weeks in February.

A second ‘severe but plausible’ scenario drawn up by the group assume further sales reductions of 15%-20% in 2022 when compared to the base case, where additional funding would be required.

Under this scenario, the group would need to reduce capex plans, draw down on the £20 new funding facility, and take the option to capitalise interest, or ‘pay in kind’, rather than in cash, with respect to approximately £249m of new debt in place post-restructure.

Under the cash flow modelling, the group believes it will be in a cash positive position and able to meet its obligations.