TRG warning over ‘extremely challenging’ outlook under tiers

The Restaurant Group has warned the tiering system will have a “significantly adverse impact” on the group if it remains in place.

Following the latest tiering restrictions, the group will have approximately 145 sites open for dine-in across the UK, 142 sites providing delivery and takeaway only, and the remaining 103 closed, an increase of 39 since the latest update.

A spokesperson said: “This is significantly worse than when the initial tiering restrictions came into effect.

“Clearly the mix of locations impacted across the tiers will continue to evolve, but if UK tiering allocations were to remain the same as currently in place throughout the first quarter of 2021, this will have a significant adverse impact on the group, and indeed the wider hospitality sector.”

TRG said cash-burn during the November national lockdown was minimised to around £5.5m for the month.

This is £2m higher than during the first lockdown due to rents payable under the terms of the leisure CVA, as well as employer contributions towards furlough payments.

Additionally the working capital outflow and increased cash exceptional costs as a consequence of the November lockdown totalled £15m.

Despite the “extremely challenging” outlook for the first quarter of 2021, TRG said the board was “well positioned to benefit from a sustained removal of restrictions”, given its strong trading performance following the first lockdown.

The company added: “We therefore expect a strong recovery when there is a return to more normal levels of customer activity.”