The Restaurant Group's 2020 guidance applied to Pizza Express

All,

Please find our updated analysis here. 

The Restaurant Group’s guidance for 2020 suggests that we adjust our Pizza Express model downwards. If Restaurant Group’s FY20 guidance is applicable to Pizza Express, Net margin headwinds for PE could be E10m - groping EBITDA to £62m, which we generally deem reasonable on the current cash strapped trajectory.

The Restaurant Group’s guidance for 2020 included an instructive slide on cost headwinds:

- Wage Inflation + 4.25%

- COGS + 1.5%

- Rent + Rates + 2.5%

- Utilities & Overheads +0.4% of Sales

- Savings from usual business improvements 0.5% of sales

Impact on Pizza Express 2020 UK cost expectations:

- COGS -£1.5m

- Wage Inflation -£9m

- Rent -£1.5m

- Utilities & Overheads -£2m

- Savings from usual business improvements +2m

=> Total net cost increase: £12m YoY

Wolfgang