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Hostmore (MORE) investor relations material

Hostmore Trading Update summary

Complete event summary combining all related documents: earnings call transcript, report, and slide presentation.
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Trading Update summary6 Aug, 2024

Corporate transactions update

  • Progress continues on the proposed all-share acquisition of TGI Fridays, aiming to create a fully franchised, asset-light business model with no corporate stores.

  • TGI Fridays has agreed to sell a substantial portion of its corporate stores for over $40 million, with both companies transitioning to franchise operations.

  • The revised model reduces ongoing funding needs, shifting away from a new long-term debt package to repaying or reducing debt using store sale proceeds and related party facilities.

  • The acquisition timeline has extended beyond Q3 2024 due to the new approach, but both boards remain committed to the deal.

  • A strategic review is underway to explore alternative value-creation options if the acquisition does not complete.

Trading update

  • H1 2024 like-for-like sales declined 10%, consistent with earlier trends; June sales were volatile, with a sharp 20% drop in the final two weeks due to the Euros and warm weather.

  • July's first three weeks saw a 23% LFL sales decline, bringing year-to-date LFL sales down 12% versus 2023.

  • H1 2024 EBITDA loss was £1.2 million, an improvement of £2.6 million over H1 2023, despite a £9.5 million revenue drop, reflecting effective cost reductions.

  • Net debt at H1 2024 was £29.7 million, up from £25.1 million at year-end 2023.

Financing and outlook

  • Peak net debt is expected around end of Q3 2024 due to working capital outflows, lower revenues, and transaction fees.

  • Borrowings may exceed current capacity, prompting discussions for additional financing as part of the strategic review.

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Frequently asked questions

Hostmore plc is a United Kingdom-based hospitality company focused on American-themed casual dining and cocktail bars. The company operates under well-known brands such as TGI Fridays, 63rd+1st, and Fridays and Go. Hostmore plc was established in 2021, following its spin-off from Electra Private Equity plc, with a strategic focus on revitalizing and expanding its dining and bar establishments. The company is headquartered in Edinburgh, United Kingdom, and its shares are listed on the London Stock Exchange.

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