Tasty has announced that it has received approval from its creditors and landlords to push forward with its restructuring plan.
The Wildwood and Dim-T operator first announced its restructuring plan to the Stock Exchange on 9 April 2024. The plan, alongside a number of additional measures to be implemented across the group, will enable it to return to profitability and secure its long-term future to deliver the best outcome for stakeholders, according to Tasty.
The group stated on 9 April that it plans to exit c20 loss-making sites as a result of the restructuring. It also announced a £750,000 loan agreement with Bet365 shareholder Will Roseff to fund the plans.
The plan was approved yesterday (4 June) by the secured creditor, category B and category C landlords, and category A and B authority creditors. Category C authority and non-critical creditors abstained.
Plan creditors will receive under the restructuring plan an estimated dividend of 4.17p/£ (to be paid in three equal tranches in August 2024, March 2025 and June 2025) from a Compromised Creditors’ Payment Fund.
They will also receive payments from a Restructuring Surplus Fund, including 10% of the amount by which the group EBITDA increases from the sanction of the Restructuring Plan to 31 December 2024 and a possible payment from the Upside Fund if the group exceeds its forecasted EBITDA . 50% of any increase over forecast will be paid in March 2025.
Prior to the announcement, the group operated 54 sites: 43 Wildwood restaurants, six Dim-T branded sites, and two non-trading and three sub-let sites.
The loan and restructuring plan are further expected to stabilise the company in FY24 and ensure its transformation to meet new opportunities in the sector in FY25 beyond existing operations, including exploring new audiences, new concepts, and potential partnerships.
Following completion of the loan agreement announced on 9 April and the sanction of the restructuring plan, the group currently operates 38 sites.
The implementation of the restructuring plan further has enabled the company to compromise 23 leases as well as compromise the claims of a number of non-critical unsecured trade creditors.
The board expects the restructuring plan to enable a significant EBITDA improvement of up to £2.1m between FY23 and FY25 through site rationalisations and other tangible cost savings.
These include head office savings of £0.6m per annum and expected lease savings from exited sites of £2.1m in FY24.
FY24 EBITDA is expected to be £0.3m. Revenue of c£33.4m and cash generation of c£1.3m is expected in FY25, with the loss of £0.9m in FY23 expected to improve to a £1.2m profit in FY25.
The Group’s audit is progressing well and the board currently expects to announce FY23 results and publish its FY23 annual report and accounts later this month.
