In its latest financial results for the year ended 31 December 2023, the group reported a loss from operations of £11.1m, an improvement on the £95.8m loss posted in 2022.
Total revenue for the period slipped from £195.7m to £190.7m amid ‘macro-economic uncertainty and fluctuating consumer behaviour’.
Hostmore said the year was ‘one of two halves’ with the first half being a ‘transitional period’ focused on senior leadership changes and implementing a full operational turnaround, which led to ‘significant profit improvement’ in the second half.
Its 2023 Christmas trading period was a further improvement on this trend with like-for-like revenue up 4% compared to December 2022.
However, like-for-like revenue in the first quarter of 2024 declined by 7% compared to 2023, which the group attributed to ‘reduced consumer demand across the sector’.
Discussing the ‘transitional period’, Stephen Welker, chair of Hostmore, said: “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.”
Following the period end, the group announced that it had reached an agreement for a proposed all-share acquisition of TGI Fridays in the US for a value of £177m, which is anticipated to complete in the third quarter of this year.
“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,” Welker added.
Hostmore’s portfolio encompasses the TGI Fridays, Fridays and Go, and 63rd+1st brands.