Wagamama Owner Raises Profit Outlook as Travel Demand Rises
(Reuters) -Restaurant Group Plc raised its annual profit outlook on Tuesday as improved passenger traffic at UK airports led to an “outperformance” in like-for-like sales in the past two months, sending shares of the Wagamama owner soaring nearly 20%.
The company, which runs restaurant chains and grub kiosks in travel hubs, now expects core profit for the fiscal year ending Jan. 2 to be between 73 million and 79 million pounds ($106.27 million), as long as there are no unexpected COVID-related disruptions.
Restaurant Group posted a profit of 53.4 million pounds last year. Shares of the company were leading gains on London’s mid-cap FTSE 250 index and on course for their best day in just over a year.
The company said business had been good since mid-September, adding that its concessions division has benefited from an uptick in footfall at airports.
Last week, WH Smith, which sells books, stationery and snacks at travel hubs, predicted sales would be at pre-pandemic levels in the current fiscal year following a recovery in North America and Britain after pandemic curbs were relaxed.
Restaurant Group, which had shut over 250 restaurants and cut about 3,000 jobs during the pandemic, is emerging as a higher quality business due to its aggressive restructuring, Stifel analysts wrote in a note.
($1 = 0.7434 pounds)
(Reporting by Chris Peters and Pushkala Aripaka in Bengaluru; Editing by Shailesh Kuber and Ramakrishnan M.)
