Wagamama, the Duke Street Capital-backed noodle chain, saw turnover for the 12 months to November 2014 reach £181.1m, with unadjusted EBITDA of £26.3m, according to a note by ratings agency Moody’s.
Last January, the group reported that turnover for the year to 28 April 2013 stood at £141.2m, with EBITDA of £23.1m.
The note from Moody’s stated: “The growth of the UK casual dining industry in recent years has been supportive of Wagamama’s growth, with Wagamama seeing positive like for like revenue growth for each of the last four quarters to November 2014. Wagamama’s strategy is still for growth in its core UK market, planning to open around 40 new restaurants in the UK in the next three years.
“To date, Wagamama has delivered consistent growth, both in terms of revenues and restaurant numbers, since it opened its first restaurant 22 years ago. The company has a track record for strategically selecting sites for new openings and successfully establishing these as profitable restaurants within 2-3 years of opening. This continued growth of Wagamama has enabled it to reach a size where it can take more advantage of economies of scale, as evidenced by the recent opening of its new central kitchen and the savings it is starting to deliver by centralising the production of sauces and other key ingredients for all of Wagamama’s UK restaurants.”
Moody’s said it views Wagamama’s near term liquidity to be adequate and anticipates the company will have negative free cash flow of around £6m to £8m over the next 18 months, as it continues to use internally generated cash for the expansionary capex necessary to achieve the rapid growth it is targeting.
It said: “However, following this refinancing, the group will have around £21m in cash and a fully undrawn £15m super senior RCF, maturing in 2019, providing a good initial liquidity cushion. Also, Moody’s acknowledges there is an amount of flexibility in Wagamama’s capex programme, with maintenance capex at around 3% of sales and the majority the capex relating to discretionary expansion capex.”
