Pizza Express' number of International restaurants appears stable

All,

An analysis of the timing of the restaurant roll-out (mostly 2016/2017) suggests that a significant number of international restaurant locations is coming up for renewal (Chinese rental contracts are short) and thus allows PE to exit unprofitable locations. But so far we count Chinese locations down by only 2 YoY, HK down 2 YoY Singapore up 1YoY, UAE up 4 YoY. Admittedly our methods are crude and recent changes may not be included in our numbers.

In short, we cannot see a reduction in the number of international restaurants from March levels and so cannot (yet?) confirm the thesis that unprofitable lease cancellations are going to drive a turnaround in that region. We continue to believe in the opportunity embedded in the lease expiry, but are not expecting material changes to affect the numbers for Q2.

Wolfgang