Andy Hornby to head Restaurant Group after announcing plans to close dozens of sites, 15 years after taking HBOS to the brink
Controversial restaurant chef Andy Hornby plans to close dozens of locations amid investor questions about his future at the company 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), where he took over in 2019.
The shares are down more than 70 percent in the past two years, after falling another 15.4 percent yesterday when his latest attempt to get investors back on the side fell on deaf ears.
Underperforming: Andy Hornby (pictured) – who led HBOS to the brink of collapse – is now in the crosshairs of The Restaurant Group, where he took over in 2019
Two shareholders in particular – activists Oasis Management and Irenic Capital Management – are calling for change.
Hong Kong-based Oasis, which has a 6.5 percent stake in the company, has threatened to push for Hornby’s removal unless things improve.
Dismal results will have done little to help Hornby’s status – though his ability to bounce back is renowned, as he’s picked up plum jobs since his acrimonious departure from HBOS.
In an apparent rebuke to Oasis and Irenic, he stressed that he was in “ongoing dialogue with all of our top shareholders” and “the momentum is good.”
Hornby laid out a three-year ‘clear plan’ to increase profits and reduce debt at TRG, which operates more than 400 restaurants and pubs.
This includes the closure of 35 loss-making restaurants, likely representing about 30 percent of Frankie & Benny’s and Chiquito locations.
At the same time, Hornby plans to expand the Wagamama business and its pubs division.
TRG reported a loss of nearly £50 million for 2022 as it was hit by rising energy and food costs.
Hornby said consumer demand was “definitely better than we forecast” with revenue reaching £883m, up from £636.6m in 2021.
But the judgment on the stock exchange was brutal. Shares fell by 15.4 percent, or 6.96p, to 38.36p.
That will not have gone unnoticed by Oasis and Irenic. Last month, Oasis said that “more of the same devastating and destructive course is not an option.” Irenic is said to have pushed for the sale of airport concessions and Brunning & Price gastropubs – a move that was not in the plan yesterday.
Hornby is well used to criticism. A damning parliamentary report on the demise of HBOS placed most of the blame on his predecessor James Crosby, who “set a course for disaster” but also found that Hornby “proved unable or unwilling to change course.”
Despite the debacle, Hornby continued to land lucrative jobs after leaving the stricken bench.
He was paid £4.1 million for two years of work at Alliance Boots before unexpectedly quitting.
Within three months he had a senior job at bookmaker Coral, staying with the company through mergers with rivals Ladbrokes and GVC.
It is thought he made an £8 million windfall when Ladbrokes Coral was sold to GVC.
His earnings at TRG have not been of that magnitude, with just over £2 million between taking the job in August 2019 and the end of 2021.