Andy Hornby on ropes as Restaurant Group boss after announcing plans to close dozens of sites, 15 years after he took HBOS to brink
Embattled restaurant chief Andy Hornby plans to close dozens of sites amid questions from investors over his future at the firm 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 at The Restaurant Group (TRG), where he took the helm in 2019.
Shares are down more than 70 per cent in the past two years, having fallen another 15.4 per cent yesterday as his latest attempt to get investors back on side 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 agitating for change.
Hong Kong-based Oasis, which has a 6.5 per cent stake in the company, has threatened to push for the removal of Hornby unless things improve.
Gloomy results will have done little to boost Hornby’s standing – though his ability to bounce back is renowned, having picked up 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 top shareholders’ and ‘momentum there is good’.
Hornby set out a three-year ‘clear plan’ to boost profits and trim debt at TRG, which operates more than 400 restaurants and pubs.
This involves closing 35 loss-making restaurants, which is likely to amount to around 30 per cent 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 £50million for 2022 as it was hit by rising energy and food costs.
Hornby said consumer demand was ‘certainly better than we were predicting’ with sales at £883million, up from £636.6million in 2021.
But the stock market verdict was brutal. Shares fell 15.4 per cent, or 6.96p, to 38.36p.
This will not have gone unnoticed by Oasis and Irenic. Last month, Oasis said ‘more of the same ruinous and devastating share price performance is not an option’. Irenic is said to have been pushing for the sale of airport concessions and Brunning & Price gastropubs – a move absent from the plan yesterday.
Hornby is well used to criticism. A damming parliamentary report into the demise of HBOS laid most of the blame at the door of his predecessor James Crosby, who ‘set the course for disaster’, but also found that Hornby ‘proved unable or unwilling to change course’.
Despite the debacle, Hornby went on to land lucrative jobs after leaving the stricken bank.
He was paid £4.1m for two years’ work at Alliance Boots before quitting unexpectedly.
Within three months he had a senior job at bookmaker Coral and stayed with the company through mergers with rivals Ladbrokes and GVC.
It is thought he earned an £8million windfall when Ladbrokes Coral was sold to GVC.
His earnings at TRG have not been on that scale, picking up just over £2million between taking the job in August 2019 and the end of 2021.