PizzaExpress has announced its 2019 which show a pre-pandemic loss of £350m as it combats high interest costs. This debt has since been restructured via a debt to equity swap.
The family favourite pizza chain has signalled that the pandemic led to a significant liquidity drain of the group and it was “very challenging” to assess how troughs would affect the firm.
Alike many other hospitality firms, it stressed that prolonged restrictions would create “significant doubt” on its ability to stay above water.
Business across the nation has issued dire warnings about the future of the sector, backed up by recent figures published by the ONS in December which show that hospitality represented 1/3 of job losses in the UK since late March. This comes as no surprise in the context of overall revenues down more than 50% in 2020 year over year (Source: S4Labour).
In November, the firm underwent a restructuring with its senior creditors to cut £1.1bn of net debt prior to £465m of it expiring in August. As part and parcel of the deal, creditors have chosen to take control of the firm which was previously owned by Chinese PE firm Hony Capital. Hony has taken control of the Chinese operation whilst the new owners have installed a fresh management team with supermarket kingpin Allan Leighton as the chair.
“The group has also cut 2,400 jobs — roughly a quarter of its UK staff — and closed 74 sites through a company voluntary arrangement.”
This comes amidst a string of bankruptcies across numerous other heavyweight retail organisations and is likely to not be the last. With many hospitality businesses teetering on the edge, we cross our fingers for a swift return to the norm.
We have and are advising a number of hospitality (and their suppliers) businesses through the pandemic and whatever may lie ahead, external perspective is useful. If you are consolidating and/or weighing your options, we are always happy to provide insight, even if it is just a sounding board to confirm what you already know.
Our debt advisory team is ready to help you renegotiate with your bankers or equity providers
We are always happy to provide insight, even if it is just a sounding board to confirm what you already know.
Our debt advisory team is ready to help you renegotiate with your bankers or equity providers
