During the “transition year”, Hostmore appointed hospitality chief Julie McEwan as chief executive, implemented a turnaround plan and introduced a revised capital allocation policy that allowed new store openings to be delayed until 2023. The changes helped the company reduce losses. from operations to £11.1m from £95.8m in 2022, although sales fell to £190.7m from £195.7m amid “macroeconomic uncertainty and volatile consumer behaviour”.
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Hostmore, which has around 90 sites across the UK, said it had shown “remarkable resilience” in what it said was a “year of two halves”, with changes made in the first half following “significant improvement profit”. ”, including the “positive” Christmas season.
However, trading conditions remain challenging. Hostmore said today that sales fell 7% in the first quarter compared to the same period last year, “mainly due to reduced consumer demand across the sector”. But it made an underlying profit of £0.3m, an improvement of £3.2m on the first quarter of 2023.
The company also delayed new store openings and reached an agreement to exit two units, saving more money.
And it’s looking to further improve its prospects with the acquisition of TGI Fridays Inc. He called the move “natural”. The reverse takeover, which would reunite the two businesses that went their separate ways in 2014, would see Hostmore shareholders hold 36% of the enlarged business, with TGI Fridays shareholders holding 64%.
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Hostmore chairman Stephen Welker said: “Subject to completion, the transaction will provide the group with greater scale, flexibility and rebalancing potential, enabling us to accelerate our existing strategy of prioritizing debt reduction and expanding the scope for shareholder returns.”
Hostmore listed on the London Stock Exchange in November 2021 as part of the final sale of the assets of TriArtisan Capital Advisors to Electra, a UK-listed private equity group. TGI Fridays has been majority owned since 2014 by funds managed by TriArtisan Capital Advisors LLC or its predecessor, TriArtisan.
The Company operates primarily through franchise and licensing agreements in the US and international markets; it also has a network of company stores across the Atlantic.