FRP helps Tasty to secure first AIM restructuring

11 June 2024 Consultancy.uk 2 min. read

Restaurant group Tasty has become the first AIM-listed company to successfully secure a restructuring plan. The firm, which had faced an uncertain future after difficult trading conditions, was supported in securing the plan by experts from advisory firm FRP.

Tasty is a branded restaurant operator in the UK casual dining market, with trading brands including dim t and Wildwood restaurants. As of 2023, the company had spread to trade from 52 branches and had plans for continued expansion.

However, that same year, Tasty said that despite expecting to report a revenue of around £49.6 million, it had endured an EBITDA loss of approximately £900,000, having lost £2.7 million in 2022. Tasty’s shares almost halved in value over the following 12 months while the company has a market capitalisation of £1.5 million.

FRP helps Tasty to secure first AIM restructuring

To stabilise the firm, Tasty brought in a multidisciplinary team from FRP – comprising restructuring, financial advisory and valuation support – to provide a strategic review of the business. FRP has form in this area, having previously helped Prezzo to apply a restructuring plan in 2023. The experts duly supplied a plan to reshape the business model to return to profitability and secure a long-term future, while delivering the best possible outcome for all stakeholders – which has been approved. This is a first for an AIM-listed firm.

Phil Reynolds, restructuring advisory partner at FRP Advisory, said, “Since their introduction in 2020 we’ve seen restructuring plans provide more and more businesses with a viable alternative to the insolvency process. This case is just the latest example of how effective it can be in providing a better outcome for all stakeholders, including where a company is AIM-listed. Tasty now has the platform it needs to pursue its strategy for future growth. We look forward to seeing how the business continues to develop in the years ahead.”

Under the proposed restructuring plan, 20 loss-making sires, of which two are currently closed, would be shuttered. Meanwhile, Tasty would seek a loan agreement for up to £750,000 to fund the plan and provide additional working capital to “stabilise the company” during its current financial year.

With legal support led by Sarah Teal of Shoosmiths and Matthew Weaver KC of Radcliffe Chambers, the team also assessed the potential outcomes for stakeholders in alternative scenarios and provided a valuation of the business. Tasty’s board expects the restructuring plan to help enable a significant improvement in profitability, and ensure transformation to meet new opportunities in the sector, including new audiences, concepts and potential partnerships.

Sarah Teal, a partner at Shoosmiths, added, "It was a pleasure to have advised Tasty on its restructuring plan which will allow the business to emerge stronger from the challenges posed by economic market pressures. The hospitality sector was understandably one of the hardest hit by the Covid-19 crisis and has been further knocked by the cost of living and interest rate rises. We wish the Tasty team all the best for the future."