TRG boosted by backing of largest shareholder

The Restaurant Group’s (TRG) largest shareholder, Columbia Threadneedle Investments, has come out in support of the group’s board and management team.

Ahead of TRG’s annual general meeting (AGM) on 23 May, Columbia Threadneedle Investments, which owns 16.7% of the group, has issued a statement: “As a long-term shareholder in TRG, we remain supportive of TRG’s board and management team, who have successfully navigated the exceptionally tough industry backdrop. The board continues to receive our support as they assess the best options to deliver long-term shareholder value.”

Ahead of the AGM, several shareholders have questioned the pay packet of TRG chief executive Andy Hornby. Glass Lewis, a proxy advisory firm, said it had "serious reservations" about the remuneration policy at the Wagamama and Frankie & Benny's operator and advised shareholders to vote against TRG's remuneration report and policy at the AGM. Oasis Capital Management, which has a 12.3% share in TRG, said last month that Hornby's pay was "disproportionate" and "tone deaf".

New York-based Irenic Capital Management, which is understood to have around a 2.5% share in TRG, has also said it plans to vote against Hornby's pay packet.

Hornby's salary increased to £674,450 for 2023 and he receives an additional bonus based on performance.

Last week, the company said trading in the first quarter of 2023 had been "very encouraging" with Wagamama sales up 9% on a like-for-like basis, and with the addition of a positive note by analysts at Shore Capital’s, shares increased 7%.

TRG owns more than 400 UK restaurants under brands including Frankie & Benny's, Chiquito, Coast to Coast, Firejacks and Brunning & Price. It acquired Wagamama for £559m in 2018.

TRG said it had delivered £5m of incremental cost savings and planned to close a further 23 sites in its leisure division, which includes Frankie & Benny's, Chiquito and Firejacks.

A spokesperson for TRG said the business would “continue to let our numbers do the talking”, while Hornby said in last week's trading update: “We’ve enjoyed a really positive first four months of the year. Wagamama and our Brunning & Price Pubs continue to trade very strongly and it is especially pleasing to see the consistent growth in ‘dine in’ sales with customers clearly enjoying eating out despite the economic backdrop. Our concessions business is also performing particularly strongly as air travel continues to recover.”

In March, the company said it planned to close up to 35 restaurants after pre-tax losses more than doubled to £86.8m, although the Wagamama brand will be unaffected.

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