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  • Writer's pictureMark Watson-Mitchell

Hostmore – getting too hot in the kitchen?

It may well be some time until any real value comes back into the shares of the ‘Fridays’ UK operator.


The group’s CEO Robert Cook has decided to step down with immediate effect.


A number of management changes for various reasons has seen the top team being reshaped.


Will it be good enough to handle the current headwinds, bad weather and train strikes?


Red and White-striped


The £15m capitalised Hostmore (LON:MORE) operates ‘Fridays’, the American-themed casual dining brand, and ‘63rd+1st’ the cocktail bar and restaurant chain, as well as the fast-casual dining brand ‘Fridays and Go’ – a total of 91 sites across the country.


Situated mainly in locations where footfall is generally high, like shopping centres, city centres and retail parks – the group’s sites gave the group some trade protection, despite the impact of the Queen’s passing, rail strikes, the Football World Cup and the bad weather.


Analyst Opinion


Following the latest Trading Update analysts Nigel Parson and Michael Clifton at finnCap, the group’s broker, have almost halved their Target Price for the group’s shares from 80p to just 45p.


Their latest estimates for the year just ended see takings up from £159.0m to £196.8m, while the group’s EBITDA will slip from £43.5m to £31.7m.


Pre-tax profits could have swung from a £7.2m positive to a £5.0m loss for the 2022 year, with earnings collapsing from 7.2p to a negative 3.2p per share.


For the current year now underway the brokers are looking for some £213.9m takings, £36.6m EBITDA, and just £0.9m losses pre-tax.


The analysts have pencilled in £232.1m revenues for the group in 2024, with an EBITDA of £41.4m, a pre-tax profit of £2.8m, with earnings of 1.8p per share.


Following the CEO departure and the Update the group’s shares eased 20% to 11.25p.


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