From Red to Black: Wingstop UK's Remarkable Turnaround Amid Sale Speculations
Posted by Emma on 21st Dec 2024
In a striking turnaround, Wingstop UK has reported a robust pre-tax profit of £3.5 million for the financial year ending 31 March 2024, a significant recovery from a £2 million loss the previous year. The fast-food chain, which has become a staple for chicken lovers across the UK, expanded its footprint to over 50 locations, contributing to a revenue surge of 122% to £84.7 million from £38.2 million in 2023.
This growth can be attributed to the expansion of its outlets and a like-for-like sales increase of 51.3%. The group's EBITDA also saw a notable rise, climbing to £8.7 million from £1.1 million the year prior. Initially established in the US in 1994, Wingstop made its British debut in 2018, with its UK operations spearheaded by master franchisee Lemon Pepper Holdings.
The ambition behind Lemon Pepper Holdings is clear: they aim to increase Wingstop's UK presence to 200 sites within the next five years. This vision was underscored by their recognition as the fastest-growing restaurant group in the UK by The Sunday Times 100 for two consecutive years. Despite economic challenges, including inflation affecting utility, labour, and sales costs, Wingstop's directors remain optimistic about the brand's prospects in the premium fast casual chicken market.
With an additional 14 sites opened since the financial year end, Wingstop UK is on track to operate 57 sites by the close of 2024. Moreover, like-for-like trading has accelerated by 59.4% since the period, representing enduring consumer demand.
Amid this success, whispers of a potential sale have surfaced. Lemon Pepper Holdings reportedly engendered Goldman Sachs to explore selling options earlier this year. The Financial Times recently highlighted that Domino's is among four potential buyers, with the deal potentially valuing Wingstop UK at around £400 million. Other interested parties include US investment firm Sixth Street and private equity giants KKR and TSG Consumer Partners, with final bids expected by 16 December.
This narrative of growth and strategic business moves marks an intriguing chapter for Wingstop UK as it navigates expansion and potential acquisition in a competitive market.