Our views

Restaurant group deal should earn high return


Martin Cholwill, Senior Fund Manager

21 November 2018

We believe the Restaurant Group are paying a fair price for an excellent asset, and are well placed to generate cost and revenue synergies which should earn them a high return on investment. 
The Restaurant Group would allow Wagamama to retain its management and culture and continue to operate under a reasonable level of autonomy, much like the pubs and concessions they currently own. The Wagamama brand attracts a broad demographic of customers and the type of food they offer has seen a growing demand. Additionally, they could roll out Wagamama into airports, where they are currently significantly under represented. 
We conclude that this transaction could bring a number of new opportunities to Restaurant Group, and therefore are supportive of the deal.

We believe the Restaurant Group are paying a fair price for an excellent asset, and are well placed to generate cost and revenue synergies which should earn them a high return on investment. 

The Restaurant Group would allow Wagamama to retain its management and culture and continue to operate under a reasonable level of autonomy, much like the pubs and concessions they currently own. The Wagamama brand attracts a broad demographic of customers and the type of food they offer has seen a growing demand. Additionally, they could roll out Wagamama into airports, where they are currently significantly under represented. 

We conclude that this transaction could bring a number of new opportunities to Restaurant Group, and therefore are supportive of the deal.

Past performance is no guide to the future. The value of investments and the income from them is not guaranteed and may go down as well as up and investors may not get back the amount originally invested. The views expressed are the author’s own and do not constitute investment advice.