Hostmore (MORE) investor relations material

Corporate transactions update

• Progress continues on the proposed all-share acquisition of TGI Fridays, aiming to create a fully franchised, asset-light business model with no corporate stores.

• TGI Fridays has agreed to sell a substantial portion of its corporate stores for over $40 million, with both companies transitioning to franchise operations.

• The revised model reduces ongoing funding needs, shifting away from a new long-term debt package to repaying or reducing debt using store sale proceeds and related party facilities.

• The acquisition timeline has extended beyond Q3 2024 due to the new approach, but both boards remain committed to the deal.

• A strategic review is underway to explore alternative value-creation options if the acquisition does not complete.

Trading update

• H1 2024 like-for-like sales declined 10%, consistent with earlier trends; June sales were volatile, with a sharp 20% drop in the final two weeks due to the Euros and warm weather.

• July's first three weeks saw a 23% LFL sales decline, bringing year-to-date LFL sales down 12% versus 2023.

• H1 2024 EBITDA loss was £1.2 million, an improvement of £2.6 million over H1 2023, despite a £9.5 million revenue drop, reflecting effective cost reductions.

• Net debt at H1 2024 was £29.7 million, up from £25.1 million at year-end 2023.

Financing and outlook

• Peak net debt is expected around end of Q3 2024 due to working capital outflows, lower revenues, and transaction fees.

• Borrowings may exceed current capacity, prompting discussions for additional financing as part of the strategic review.