Electra Partners, the private equity backer of TGI Friday’s, has this morning said that the Karen Forrester-led business continues to perform in line with its investment case.
It said that year-on-year earnings growth has accelerated to 10% in the last twelve-month period as a result of improved like-for-like sales performance as well as its new store opening programme.
The valuation of Electra’s investment has increased by £30m or 33% since September 2016 to stand at £120m as a result primarily of earnings growth and cash flow.
Electra said that the total return on its investment in TGI Friday’s now stands at 1.2x original cost, a 10% IRR.
Last December, Electra reported a £23m fall in the valuation of TGI Friday’s in the past year – the second largest drop across it portfolio.
The group had a fair value of £90m as of 30 September 2016, down from £113m a year before. Electra acquired 78% of the group in December 2014 for £99m.
The c80-strong TGI Friday’s is currently rolling out its next generation format across its estate.
Following the concept’s launch in Newcastle in November, it has rolled the new format out to its sites in Bournemouth and Southampton’s West Quay Watermark development.
The new TGI Friday’s concept features a spacious bar and lounge, a bespoke menu for all-day dining, and live music.