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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.
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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