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Report on Restaurant Group AGM

23rd May 2023

On the 23rd of May, 2023, I attended the AGM of the Restaurant Group, which was held at the company’s head office in London. The Company operates a number of well know high street restaurant brands, notably Wagamama and Chiquito, however, the club’s interest lies with the Brunning & Price pubs subsidiary.

Media reports suggest that the company has recently come under pressure from a number of activist investors and hedge funds, who would like to see the company focus on its Wagamama operation and dispose of its other subsidiaries. There is also discontent around the pay policy and executive director bonuses, which are viewed as excessive compared to other similar sized companies in the sector. Despite media reports that the AGM was expected to be ‘combative’, on arrival I found the atmosphere to be relaxed and friendly.

The meeting started with the Chairman introducing the board, before the chief exec. gave a brief presentation outlining last year’s results, the strategy to grow earnings, and an update on recent trading.

When the meeting was thrown open to questions, only one of the activist investors was present, and their representative outlined the strategy they thought the board should adopt, and the reasons why. They also criticised remuneration and sought improved engagement between board and investors.

In reply, the chairman said that the company has around 3,500 investors, and the biggest 15 shareholders own around 70% of the company. He said that most of the largest investors support the current strategy, while noting that around 15-20% of investors are seeking change.

I asked about cask ale availability and sales trends and sought a comparison with the pre-covid period. The Chief Exec replied that each pub offers a branded Brunning & Price ale, of which two are brewed, one for the north of the country and one for the south.

In addition, each pub offers three locally sourced cask ales, and ‘beer miles’ are displayed, so that customers can see how far a beer has travelled. He commented that, despite the declines reported in much of the industry, cask sales in their own estate are holding up pretty well.

I considered the answer satisfactory, and commented that the company’s ambition appears well aligned with our own.

Subsequent questions included references to debt levels and dividends, customer and staff demographics, show of hands voting, and ethnicity pay gap reporting.

Overall, while there are a range of views around future strategy, the company’s approach to how it manages its pubs appears to be a good one.

Subsequent to the meeting, final voting figures were published, which showed that:

  • • 35% of votes went against the remuneration policy
  • • 46% of votes against the remuneration report
  • • 23% against the re-election of the chair
  • • 16% against the re-election of the chief executive officer
  • • 24% against the re-election of the chair of the remuneration committee

It appears that this story has further to run, and the committee will continue to monitor developments, particularly as regards any impact on the pubs operation.

Ian Brindley – CMIC Committee Member