Hostmore PLC on Friday reported a narrowed annual loss, as trading in its shares was restored.
Shares in Hostmore, the West Sussex, England-based owner of casual dining brand TGI Fridays, were restored on Friday, following the publication of its annual results.
Its shares fell 9.1% to 19.00 pence each in London on Friday.
In 2023, Hostmore reported revenue of £190.7 million, down from £195.7 million a year earlier.
Its pretax loss narrowed to £25.5 million from £108.3 million.
Administrative expenses dropped to £141.2 million from £216.5 million.
Chair Stephen Welker said: ‘2023 was a transitional year for Hostmore during which we successfully implemented a turnaround of the business. The turnaround reduced costs, deferred cash outlays for new store openings, and improved the operations of our existing stores, while introducing a revised capital allocation policy to focus on high ROI organic growth initiatives and prioritising the full repayment of our borrowings and initiating shareholder distributions.’
Hostmore updated markets on its current trading. It said that revenue in its first quarter was down 7% on a like-for-like basis annually. It said that this was ‘due principally to reduced consumer demand across the sector.’
In April, Hostmore agreed to combine with its own franchisor TGI Fridays Inc.
The company said the deal has an enterprise value of £177 million. Under the agreement, Hostmore shareholders will own a 36% stake in the combined unit, with current shareholders in TGI Fridays holding the remainder.
TGI Fridays is currently owned by TriArtisan Capital Advisors LLC and MFP Partners LP. Because of the size of the stake in the combined company owned by TriArtisan and MFP, a waiver to rule 9 of the UK takeover code, which relates to mandatory offers, would be required for the transaction to complete. Completion is expected in the third-quarter.
On Friday, Welker said: ‘Subject to completion, the transaction will give the group increased scale, flexibility and re-rating potential that will allow us to accelerate our existing strategy of prioritising debt reduction and enhancing the scope for shareholder returns.’
Copyright 2024 Alliance News Ltd. All Rights Reserved.