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TRG upgrades expectations following market outperformance

In TRG’s last market update on 16 November 2021, the group provided guidance that on an IAS 17 basis it expected FY21 Adjusted EBITDA to be a range of £73m-£79m and FY21 year-end Net Debt was expected to be less than £190m.

However, the company has now announced that due to good cost control and continued strong trading relative to the market, management now expects the Group’s FY21 Adjusted EBITDA will be at the top end of the range and FY21 year-end Net Debt will be less than £180m.

The introduction of the UK Government’s 'Plan B' in early December, which included advice to work from home, calls for further caution in socialising and increased testing requirements for international travel, reduced consumer confidence and put additional restrictions on the hospitality and travel sector.

To illustrate the impact on customer demand across the sector, TRG is providing an update on trading trends for Q4 2021 by month, for both its divisional like-for-like (LFL) sales performance and relevant market benchmarks (as measured by Coffer Peach).

It is clear from the trends that:
• In both the Restaurant and Pubs markets LFL sales (as measured by Coffer Peach) were 10% to 12% lower in December than in October and November
• TRG continued to trade ahead of the market demonstrating our ability to out-perform in all market conditions

Whilst TRG is encouraged with the recent Government announcement that all “Plan B” restrictions will be lifted this week, it expects consumer confidence may take longer to recover. The firm is also mindful that the recovery in air passenger volumes remains dependant on the timing of changes to both UK and International restrictions.

Despite the near-term uncertainties, the Board remains confident in the group’s prospects given the strength of its brands, substantially reduced net debt and outperformance versus the market.