Pizza Express - Confidence

All,

Please refer to our unchanged analysis here.

Allan Leighton is one of the UK’s retail heavy-weights. At a time where we enter lockdown #2 and are musing about #3 and #4 in H121, his acceptance of the chairmanship of Pizza Express is a vote of confidence.
Our only first hand experience of Allan has been as chairman of Matalan after the retailer hit the skids following the cotton spike in 2012. Allan is the right calm and collected appointment for the company and brings significant experience in overseeing operational turnaround in the retail and also QSR sector (currently independent director of The Restaurant Group).
In calendar Q4 to date, Pizza Express continued to see heavily affected footfall, particularly in city centre locations and there is no suggestion that this will change after this lock-down or before the pandemic is over. Much of the demand has shifted to online/delivery and frozen - segments PE cater to, but that cannot begin to cushion the impact.
Still, the CVA and recapitalisation have been substantial and we remain long the SSNs for 5% of NAV, even if we might have bought in a little early.

Wolfgang

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E: wfelix@sarria.co.uk
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www.sarria.co.uk

Wolfgang Felix