Andy Hornby on the ropes as Restaurant Group boss after announcing plans to close dozens of sites, 15 years after bringing HBOS to the brink
Embattled restaurant chef Andy Hornby plans to close dozens of locations amid questions from investors about his future at the business behind Wagamama and Frankie & Benny’s.
The 56-year-old former banker, who led HBOS to the brink of collapse in the global financial crisis, is in the crosshairs of The Restaurant Group (TRG), which he took over as CEO in 2019.
The shares are down more than 70% in the past two years, having fallen another 15.4% yesterday as its latest bid to rally investors fell on deaf ears.
Underperforming: Andy Hornby (pictured) – who led HBOS to the brink of collapse – is now in the crosshairs at The Restaurant Group, where he took the helm in 2019
Two shareholders in particular – activists Oasis Management and Irenic Capital Management – are pushing for change.
Hong Kong-based Oasis, which owns a 6.5% stake in the company, has threatened to push for Hornby’s exit unless things improve.
Dismal results will have done little to improve Hornby’s position – although his ability to bounce back is renowned, having landed plum jobs since his acrimonious departure from HBOS.
In an apparent rebuke to Oasis and Irenic, he insisted he was in “constant dialogue with all of our major shareholders” and “the momentum is good”.
Hornby outlined a “clear three-year plan” to boost profits and reduce debt for TRG, which operates more than 400 restaurants and pubs.
This involves closing 35 loss-making restaurants, which will likely represent around 30% of its Frankie & Benny’s and Chiquito outlets.
At the same time, Hornby plans to expand the Wagamama business and its pubs division.
TRG reported losses of almost £50m for 2022 as it was hit by rising energy and food costs.
Hornby said consumer demand was “certainly better than we expected” with sales of £883m, up from £636.6m in 2021.
But the stock market verdict was brutal. The shares fell 15.4%, or 6.96p, to 38.36p.
This will not have gone unnoticed by Oasis and Irenic. Last month, Oasis said that “more of the same ruinous and devastating share price performance is not an option.” Irenic is said to have pushed for the sale of airport concessions and Brunning & Price gastro pubs – a move missing from the plan yesterday.
Hornby is used to criticism. A damning parliamentary report into the demise of HBOS laid the bulk of the blame on his predecessor James Crosby, who “paved the way for disaster” but also found that Hornby “proved unable or unwilling to change heading”.
Despite the debacle, Hornby landed lucrative jobs after leaving the struggling bank.
He was paid £4.1million for two years at Alliance Boots before quitting unexpectedly.
Within three months he was in a senior role at bookmaker Coral and remained in the business through mergers with rivals Ladbrokes and GVC.
He is believed to have made £8million when Ladbrokes Coral was sold to GVC.
His earnings at TRG have not been on that scale, picking up just over £2m between taking the job in August 2019 and the end of 2021.