S&P cuts PizzaExpress view to negative

S&P said it revised its outlook for Wheel Bidco Ltd. (PizzaExpress) to negative from stable and affirmed the B issuer and senior unsecured notes ratings as well as the BB- rating on the super-senior revolver.

“We anticipate that the macroeconomic environment will affect the group's dine-in sales. Discretionary spending will likely continue to fall as a result of the cost-of-living crisis in the U.K., resulting in lower sales for high street restaurants such as PizzaExpress. Its Q3 results have already showed signs of this, with revenues only marginally increasing by 2.5% supported by dine-out sales while like-for-like dine-in sales fell 8%,” S&P said in a press release.

However, the agency said it expects PizzaExpress’ dine-out business to remain hardy thanks to new partnerships with UberEats and Just Eat.

S&P said it forecasts total sales in 2022 of close to £420 million-£440 million and increasing in 2023 toward £440 million-£460 million.

That said, S&P warned it could lower PizzaExpress’ ratings if the company’s operating performance is weaker than the agency’s base case, tightening liquidity, reducing cash generation as well as worsening credit metrics.

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