Wagamama, the international noodle chain put up for sale by Lion Capital, could fetch up to £260m. The chain, led by Steve Hill, will today report strong annual results with underlying earnings up 22% to £20.9m in the 12 months to April and sales up 8.6% to £109.6m. The figures will be released amid speculation that Lion Capital, which has a controlling 70% stake alongside Graphite Capital and the Wagamama management, is to appoint Rothschild to find a buyer. The process is likely to start next month with an expected price tag of £230m to £260m. Lion last tried to sell the business in 2007 after pulling a planned £250m flotation. Talks were held with several private equity companies before Lion decided that the top bid of £210m was too low. Today’s results are likely to boost its chances of a successful sale. Efficiencies pushed its margin of earnings before interest, taxes, depreciation and amortisation from 16.9 per cent to 19% while like-for-like sales during the year rose by 2.4 per cent. A pause in its site acquisition strategy enabled it to reduce debt by £20 million to £80 million over the past 18 months. Steve Hill, the chief executive, said that trading had remained strong despite the distractions of the World Cup and hot weather and he expected to continue “punching the lights out” in terms of earnings performance in the year to next April. He told The Times: “We’re in the sweet spot with our average spend per head of about £12. At £12 to £15 you’re spending no more than you would on preparing a quality meal at home.” Mr Hill said that the chain, which plays on its health-conscious credentials, was also benefiting from the growing sophistication of children’s eating habits. “Eating out when I was a kid was going to a Wimpy or fish and chips on the seafront, while my parents would go to a Berni Inn. That’s changed. Kids now eat sushi, noodles, pizzas, curries, Thai food. They’re more savvy and kids drive a lot of people to our restaurants.” Mr Hill said that the strong trading had partly been achieved by the decisive action taken after the recession hit. “We confronted the brutal facts by taking our foot off the expansion pedal. That allowed us to ensure that what we do is as good as it can be.”