BUSINESS LIVE: TRG to sell loss-making Frankie & Benny’s unit

Heathrow shrugged off August bank holiday flight chaos as passenger numbers surged on the same time last year.

The UK’s biggest airport revealed that 7.5million passengers used its services in the month of August.

INTRODUCING a congestion charge In Scotland’s biggest city will accelerate the decline of its retail centre, business leaders have warned.

Glasgow City Council is facing a growing backlash after its deputy leader raised the prospect of a new charge on drivers who commute into the city centre.

Shares in Vistry Group soared on Monday after it revealed plans to combine its housebuilding and partnerships divisions alongside a resilient set of half-year results.

The Kent-based property developer said the merger would help it focus on meeting the UK’s severe shortage of mixed-tenure, affordable homes.

Wagamama owner The Restaurant Group (TRG) has agreed to sell its leisure business to Cafe Rouge owner Big Table Group in a bid to improve earnings and reduce leverage.

TRG will sell the loss-making unit, which houses the Frankie & Benny’s and Chiquito brands, in a deal that will see it pay £7.5million to Big Table Group.

TRG told investors the sale will increase adjusted earnings before interest, taxes, depreciation, and amortisation margins and reduce leverage.

BMW will on Monday announce plans to build its next-generation electric Mini in Oxford after securing a Government funding package, as exclusively revealed by the Daily Mail and ThisisMoney over a week ago.

The German-owned brand will pump a multi-million pound investment – some of it taxpayer funded – into transforming the existing Mini Plant Oxford in Cowley. It will secure 4,000 jobs at the site.

A Wilko rescue deal proposed by HMV owner Doug Putman has collapsed, with the retailer’s administrators now expected to try to sell about 100 stores to Poundland.

The Range is also now set to buy the Wilko brand as PricewaterhouseCoopers (PwC) continues to try to save as many of its 400 stores and 12,500 employees as possible.

As disruptors go, Aldi and Lidl take some beating. The German-owned discounters have come from nowhere to upend British food retailing in a way that not even Amazon – the ultimate category-killer – could imagine, as new research for The Mail on Sunday reveals.

Between them they now account for more than one in every six pounds spent in British supermarkets. And their relentless rise continues as cost-conscious customers feeling the pinch shop around for bargains.

Last week Aldi unveiled plans to create 500 more outlets in the UK as its 1,000th shop opened its doors in Woking, Surrey.

Ian Plummer, commercial director of Auto Trader:

‘A BMW decision to keep electric MINI production in the UK provides a desperately needed stake in the future of the electrified car market and cements the continuation of Britain’s manufacturing heritage– something that’s been pulled into question since the impacts of Brexit have been felt in the automotive industry.

‘With an ever-growing number of electric vehicles on UK roads and the used electric car market showing record levels of demand, it’s clear EVs will be central to the future of the automotive industry and so it’s vital that Britain is actively engaged in the process.’

London-listed stocks are trading higher this morning, with the FTSE 100 boosted by miners after positive China data signalled stability in the world’s second-largest economy.

Vistry shares have jumped 14 per cent after the homebuilder kept its annual profit outlook.

Data showed China’s consumer prices returned to positive territory in August, while the country’s new bank loans jumped more-than-expected last month, reflecting signs of economic stabilisation of the top metals consumer.

Industrial metal miners have gained 2.8 per cent.

Josh Warner, market analyst, City Index:

‘Vistry Group managed to post a rise in weekly sales in the first half as it focused on selling its houses in bulk to the likes of housing associations and local authorities and it is now fully leaning into this strategy as conditions in the broader market, plagued by higher interest rates that has pushed the housing ladder out of reach for more people, continues to hurt demand from individual buyers.

‘The shift in strategy to focus on partnerships will offer higher returns and require less capital, which is good news for shareholders that will see more cash funnelled back to them over the coming years as a result.’

AstraZeneca boss Sir Pascal Soriot has privately told friends and trusted advisers that he is looking to leave the biggest company in the FTSE 100, The Mail on Sunday understands.

He has had one of the most successful careers in British corporate history, spearheading the development of one of the first Covid-19 vaccines and fending off a blockbuster takeover bid from US rival Pfizer.

Richard Hunter, head of markets at Interactive Investor:

‘Markets in the UK opened on the front foot with a measured return to a risk-on approach. Mining stocks were the beneficiaries of early buying interest despite the mixed picture of Chinese demand, while the insurers rose on the back of broker upgrades which lifted Prudential, Aviva and Legal & General.

‘There was also some tentative interest emerging in the beleagueredhousebuilding sector.

‘Domestically there is some important economic data to come this week, with the release of both unemployment and GDP numbers later in the week.

‘The UK economy remains finely balanced, with tepid growth continuing to face the pressure of a higher interest rate environment and weak consumer sentiment.

‘The FTSE250 has tended to bear the brunt of a guarded outlook and is down by almost 2%, while the FTSE100 is finding lukewarm support which limits its gains to just 1% in the year to date.’

Aarin Chiekrie, equity analyst at Hargreaves Lansdown:

‘Vistry’s overall performance was impressive given the challenging environment for UK housebuilders, and the group’s announced a big strategy change today. Vistry’s set to shift its operations to focus solely on the more defensive, high-return Partnerships business, which focuses on affordable housing.

‘This means Housebuilding will be fully merged into Partnerships by the end of the second half, freeing up capital to strengthen the balance sheet and help fund shareholder returns as well as the continued growth of the Partnerships division.

‘It’s fair to say the Housebuilding division’s been stuttering lately. Recent interest rate rises have reduced affordability for buyers, causing private sales rates to decline and completions to be wound lower as a result. That’s no surprise though, given housebuilding’s a notoriously cyclical sector.

‘In contrast, Partnerships’ revenues tend to be more robust – the need for more affordable housing doesn’t go away because economic conditions look tough. This provides large fixed-volume projects which should hold up better in a downturn.

‘Partnerships, which for the first time includes a contribution from the recently acquired Countryside, saw completions nearly treble to 3,203 in the first half. Cost-savings as a result of the acquisition are progressing well and helping to keep underlying pre-tax profit guidance for the full year intact, expected to be in excess of £450m.’

John Lewis is set to report another loss this week as new chief executive Nish Kankiwala unveils his first set of results since taking the helm at the struggling retailer.

Britain’s biggest employee-owned business, which includes the John Lewis department stores and grocer Waitrose, has been hit hard by a triple whammy of the pandemic, rampant inflation and the cost-of-living squeeze. Kankiwala is expected to announce lower losses in the six months to July compared with the £99 million shortfall posted for the same period a year ago.

Vistry Group will merge its affordable housing ‘Partnerships’ business with its Housebuilding operations.

The housebuilder told investors of its plans as it retained its annual profit forecast, buoyed by resilient demand in cheap homes segment.

Vistry, one of the biggest British housebuilders in terms of annual homes built, posted adjusted pre-tax profit of £174million for the six months ended 30 June, compared with £189.9million a year earlier.

BMW will announce plans to build its next-generation electric Mini in Oxford after securing a Government funding package.

The German-headquartered manufacturer’s multi-million pound investment to transform its existing plant will secure 4,000 high-quality jobs, according to ministers.

Government sources declined to set out the level of taxpayer support being offered to BMW, but did not dispute the previously reported figure of £75million.

The Restaurant Group has agreed to sell its loss-making leisure business, which houses the Frankie & Benny’s and Chiquito brands, to Cafe Rouge owner Big Table Group.

TRG will pay £7.5miliion to Big Table as part of the deal.

Andy Hornby, CEO of TRG, said:

‘A sale of our Leisure business significantly accelerates our medium-term strategic plans to increase Adjusted EBITDA margins and reduce leverage.

‘On behalf of TRG, I would like to express our massive thanks to the extraordinarily hardworking and dedicated teams across the Leisure business who have made huge improvements in the customer proposition over the last few years. We wish them all well as part of the Big Table Group.’