LSE:RTN

Stock Analysis Report

Executive Summary

The Restaurant Group plc operates restaurants and pub restaurants in the United Kingdom.


Snowflake Analysis

Fair value with moderate growth potential.


Similar Companies

Share Price & News

How has Restaurant Group's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: RTN's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

90.0%

RTN

11.1%

GB Hospitality

5.9%

GB Market


1 Year Return

-62.0%

RTN

-26.0%

GB Hospitality

-22.7%

GB Market

Return vs Industry: RTN underperformed the UK Hospitality industry which returned -22.2% over the past year.

Return vs Market: RTN underperformed the UK Market which returned -18.8% over the past year.


Shareholder returns

RTNIndustryMarket
7 Day90.0%11.1%5.9%
30 Day-58.9%-31.3%-23.1%
90 Day-72.1%-34.6%-28.1%
1 Year-61.0%-62.0%-23.9%-26.0%-18.6%-22.7%
3 Year-78.9%-86.6%-16.1%-24.6%-13.4%-24.7%
5 Year-88.7%-93.3%-3.6%-18.7%1.3%-22.0%

Price Volatility Vs. Market

How volatile is Restaurant Group's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Restaurant Group undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: RTN (£0.45) is trading below our estimate of fair value (£1.1)

Significantly Below Fair Value: RTN is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: RTN is unprofitable, so we can't compare its PE Ratio to the Hospitality industry average.

PE vs Market: RTN is unprofitable, so we can't compare its PE Ratio to the UK market.


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate RTN's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: RTN is good value based on its PB Ratio (0.5x) compared to the GB Hospitality industry average (1x).


Next Steps

Future Growth

How is Restaurant Group forecast to perform in the next 1 to 3 years based on estimates from 13 analysts?

75.7%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: RTN is forecast to become profitable over the next 3 years, which is considered faster growth than the savings rate (0.5%).

Earnings vs Market: RTN is forecast to become profitable over the next 3 years, which is considered above average market growth.

High Growth Earnings: RTN's is expected to become profitable in the next 3 years.

Revenue vs Market: RTN's revenue (0.5% per year) is forecast to grow slower than the UK market (2.7% per year).

High Growth Revenue: RTN's revenue (0.5% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: RTN's Return on Equity is forecast to be low in 3 years time (11.6%).


Next Steps

Past Performance

How has Restaurant Group performed over the past 5 years?

-59.3%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: RTN is currently unprofitable.

Growing Profit Margin: RTN is currently unprofitable.


Past Earnings Growth Analysis

Earnings Trend: RTN is unprofitable, and losses have increased over the past 5 years at a rate of -59.3% per year.

Accelerating Growth: Unable to compare RTN's earnings growth over the past year to its 5-year average as it is currently unprofitable

Earnings vs Industry: RTN is unprofitable, making it difficult to compare its past year earnings growth to the Hospitality industry (-3.5%).


Return on Equity

High ROE: RTN has a negative Return on Equity (-10.05%), as it is currently unprofitable.


Next Steps

Financial Health

How is Restaurant Group's financial position?


Financial Position Analysis

Short Term Liabilities: RTN's short term assets (£111.1M) do not cover its short term liabilities (£223.1M).

Long Term Liabilities: RTN's short term assets (£111.1M) do not cover its long term liabilities (£439.9M).


Debt to Equity History and Analysis

Debt Level: RTN's debt to equity ratio (83%) is considered high.

Reducing Debt: RTN's debt to equity ratio has increased from 16% to 83% over the past 5 years.


Balance Sheet

Inventory Level: RTN has a high level of physical assets or inventory.

Debt Coverage by Assets: RTN's debt is not covered by short term assets (assets are 0.3x debt).


Cash Runway Analysis

For companies that have on average been loss making in the past we assess whether they have at least 1 year of cash runway.

Stable Cash Runway: RTN has been profitable on average in the past, therefore cash runway is not a concern.

Forecast Cash Runway: RTN has been profitable on average in the past, therefore cash runway is not a concern.


Next Steps

Dividend

What is Restaurant Group's current dividend yield, its reliability and sustainability?

7.85%

Forecast Dividend Yield


Dividend Yield vs Market

Notable Dividend: Unable to evaluate RTN's dividend yield against the bottom 25% of dividend payers, as the company has not reported any payouts.

High Dividend: Unable to evaluate RTN's dividend yield against the top 25% of dividend payers, as the company has not reported any payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if RTN's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if RTN's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: RTN is not paying a notable dividend for the UK market.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of RTN's dividend in 3 years as they are not forecast to pay a notable one for the UK market.


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

2.8yrs

Average management tenure


CEO

Andy Hornby

0.58

Tenure

Mr. Andy Hornby has been Chief Executive Officer and Director of The Restaurant Group plc since August 1, 2019. Mr. Hornby served as Chief Operating Officer of Ladbrokes Coral Group plc. Mr. Hornby serves  ...


Leadership Team

NamePositionTenureCompensationOwnership
Kirk Davis
CFO & Director2.08yrsUK£427.60k0.030% £66.8k
Andy Hornby
Chief Executive Officer & Director0.58yrno data0.057% £125.0k
Debbie Moore
Group HR Directorno datano datano data
Nick Ayerst
Managing Director of TRG Concessions7.17yrsno datano data
Angelo Gabrilatsou
Managing Director of Coast to Coastno datano datano data
Murray McGowan
Managing Director of Leisure2.75yrsno datano data
Mary Willcock
Managing Director of Brunning & Priceno datano datano data
Crispin Holder
Director of Finance3.83yrsno datano data

2.8yrs

Average Tenure

Experienced Management: RTN's management team is considered experienced (2.8 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Kirk Davis
CFO & Director2.08yrsUK£427.60k0.030% £66.8k
Andy Hornby
Chief Executive Officer & Director0.58yrno data0.057% £125.0k
Graham Clemett
Independent Non-Executive Director3.75yrsUK£60.00k0.0071% £15.6k
Zoe Morgan
Non-Executive Director0.17yrno datano data
Michael Tye
Independent Non-Executive Director3.92yrsUK£60.00k0.0072% £15.8k
Alison Digges
Non-Executive Director0.17yrno datano data
Debbie Hewitt
Independent Non-Executive Chairman3.83yrsUK£215.00k0.033% £72.9k
Allan Leighton
Senior Independent Non-Executive Director0.83yrno datano data

1.5yrs

Average Tenure

56yo

Average Age

Experienced Board: RTN's board of directors are not considered experienced ( 1.5 years average tenure), which suggests a new board.


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: RTN insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have been substantially diluted in the past year, with total shares outstanding growing by 72.3%.


Top Shareholders

Company Information

The Restaurant Group plc's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: The Restaurant Group plc
  • Ticker: RTN
  • Exchange: LSE
  • Founded: 1954
  • Industry: Restaurants
  • Sector: Consumer Services
  • Market Cap: UK£219.882m
  • Shares outstanding: 490.81m
  • Website: https://www.trgplc.com

Number of Employees


Location

  • The Restaurant Group plc
  • 5-7 Marshalsea Road
  • London
  • Greater London
  • SE1 1EP
  • United Kingdom

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
RTNLSE (London Stock Exchange)YesOrdinary SharesGBGBPJan 1992
RSTG.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDJan 1992
RTNLBATS-CHIXE (BATS 'Chi-X Europe')YesOrdinary SharesGBGBPJan 1992
R2KDB (Deutsche Boerse AG)YesOrdinary SharesDEEURJan 1992

Biography

The Restaurant Group plc operates restaurants and pub restaurants in the United Kingdom. Its brands include Frankie & Benny’s, Chiquito, Coast to Coast, Brunning & Price, Garfunkel’s, Firejacks, Wagamama, and Joe’s Kitchen. The company also operates TRG concessions that provide table service, counter service, sandwich shops, pubs, and bars. As of December 30, 2018, it operated approximately 439 restaurants and 81 pubs. The Restaurant Group plc was incorporated in 1954 and is headquartered in London, the United Kingdom. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/03/27 21:28
End of Day Share Price2020/03/27 00:00
Earnings2019/12/29
Annual Earnings2019/12/29


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.