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and hot on the heels of AWT comes, and there's no prizes for guessing this given past form, JC Novelli.

(accroding to the news of the world via fleurets)

'According to the News of the World, the gastropub business of Jean-Christophe Novelli has gone into administration. His two Touch of Novelli pubs have ceased trading after the chef's company, Sweet Medicine, fell into financial difficulties. '

you don't win friends with salad

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I also read that P Rankin is facing the possibility of bankruptcy. Is the 'celeb chef' bubble on its way to bursting? As for the likes of JCN, the mans a joke. He'll be on big brother next! Like most of em, their all too fuking full of themselves, craving the next photo opportunity and most can't cook for toffee. There was a time JCN was considered a fine chef but those days are well gone. Too busy looking at himself in the mirror, instead of looking at a passe. I hope these hard times prove to chefs that cooking isn't simply a bypass to being famous and instead get on with job inhand.

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Have to say I'm rather pleased he's kept the Kew one. I've had a few decent meals there over the years. It's walking distance from the Travelodge I stay at when visiting the National Archives and there arent too many other places in the very immediate neighbourhood.

John Hartley

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I understand what you mean, its certainly a noticeable time at the sharp end. That said, TOUCH WOOD!, our January month ending figures were better than this time last year. Still too early to see what really is/ may happen. Like everybody else though, don't know where or how this period is going to level out. Good job those in power know what they're doing! :biggrin: I hope all the decent places out there get through any difficulties but sadly I'm sure there will be further casualties. As for the celeb lot, couldn't give a toss. Most of them are muppets who never seem to learn, spread themselves so thinly, then wonder why their 'product name' becomes worthless.

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Thanks for that Gary, really cheered me up that did!

For us down here in sunny Cornwall, i believe it's all about survival until the season starts in earnest with 1/2 term and then Easter. Other locations don't have that to look forward to.

well for what it's worth bas, if every restaurant was run as tightly as yours i think the industry would be in better shape.

see you good friday :smile:

you don't win friends with salad

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Does being in 'Padstein' not make that much difference to your closed season then?

We probably have the longest season in Cornwall.When i came down here 13 years ago, the job didn't start till mid march, and then that was like January is now( good at weekends, poor mid week).We have more good places now, so when we get a downturn, its felt more keenly i guess.Mr Stein has a huge positive effect on the town,so please don't think i moaning, i know i would rather be here than anywhere else in good times or bad.

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  • 4 weeks later...
GRH has breached its covenants, though whether in this FY or last, no-one seems to know.

Very,Very,Interesting my dear Wooster.

Perhaps it would be normal in the current economic climate to have to adjust and re-negotiate bank borrowings.This can take time.

I would imagine on an empire the size of his, a few financial hiccups could reverberate through the entire group.

There is always going to be a lot of speculation when it comes to Gordon Ramsay.

It goes with the territory,especially given his high profile.

Lets see how this pans out.

Btw FY is financial year.

Sorry Bertie, someone's bound to ask.

"So many places, so little time"

http://londoncalling...blogspot.co.uk/

@d_goodfellow1

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More detail in T'Guardian, including some interesting loans.

Does say the notes have 'breaches' of covenants rather than just re-negotiation.

Now I am not an accountant,but they do touch on re-structuring in the article.

More interesting are the accountants comments,about the £4.4 million loan to his US ventures.

Could this be one of the breaches?

Of interest to many,must be the quite staggering £5 million owed to suppliers.

Now remember that these figures are historic.Not a reflection of what is happening currently.

By making payments,two three or four weeks late, large businesses in effect get free credit past the normal payment terms.

Now I am not saying that is the case here I am just pointing out the type of hardship this can impact on smaller concerns.

I don't suppose the foul mouthed one is too bothered about all of this,his salary of £1,117,819 (remember its historic) will be of some comfort to him.

Of interest to us all is the £10.5 million facility GRH has with the Royal Bank of Scotland

In effect our bank!

Now imagine this if you will,heaven forbid.

Assume the worst,that it did go wrong.

We would own the assets.

I somehow can not see myself standing outside a derelict RGR in Royal Hospital Rd

claiming.

I once owned part of this!

Perhaps Gordon would consider befriending Sir Fred Goodwin,he has al lot of spare time on his hands these days.

He also has a lot of our cash.

£693.000 of it this year.

Fancy investing in a restaurant business Fred?

"So many places, so little time"

http://londoncalling...blogspot.co.uk/

@d_goodfellow1

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I do rather wonder just how Mr R would respond to the suggestion of allowing a finance consultant freedom to poke around in the cupboards (and files) to make a TV programme offering helpful, practical advice on the measures Mr R should be taking to turn around HIS OWN seemingly rather over-extended business?

Its not the gist of his reaction that I wonder about, more the Richter scale measurement of it!

"If you wish to make an apple pie from scratch ... you must first invent the universe." - Carl Sagan

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More detail in T'Guardian, including some interesting loans.

Does say the notes have 'breaches' of covenants rather than just re-negotiation.

Now remember that these figures are historic.Not a reflection of what is happening currently.

Uhhr, not necessarily. Given it's not stated which FY these breaches happened, they could have taken place any time up to the week before the accounts were signed off. Auditors have to take a view on the going concern of the business and therefore make judgements and add statements about the current operation.

The implication of the statements is not that GRH missed a payment, but that they over-extended and went beyond the level of debt allowed. The US might be something to do with this.

Can Gordon spell 'pre-pack'?

It no longer exists, but it was lovely.

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Pulled the accounts from Companies House. Relatively straightforward and only cost a quid (I'm sure it used to be more). And surprisingly for private company accounts the AR is relatively comprehensive.

As BertieWooster suggests the comments about covenant breach are in the accounting policies rubric, not the main body of the report. This suggests that the breach is more recent than the report date of August 2007.

This is backed up the numbers, in that the Aug07 ratios look pretty benign. Net debt/EBITDA was 0.91x at Aug07 which is very comfortable (normally >3x is a danger sign). Interest coverage was 14.4x (<3x generally seen as a risk). I would be very surprised if the firm was in breach at Aug07.

David Goodfellow's concerns about the trade payables balance are overblown, IMHO. Trade creditors were £4.724m, flat on £4.759m in 2006. Days payable (how many days on average before you pay your suppliers) was 85.5 slightly up on 84.8 the previous year. Sure its not great the suppliers have to wait three months to get their cash, but that's life. Remember £5m is a big number in absolute terms but should be put in context of a £42m revenue line.

Other points of interest (though bear in mind these are all Aug07 accounts so wildly out of date):

** As has been pointed out revenues grew 9.1% Y/Y. Although bear in mind I'm sure there were new openings (paid for by capex which would not go through the P&L) so like-for-like growth would have been lower than that.

** Directors report suggests Petrus is due to reopen as a standalone restaurant in Sep09. We shall see.

** New agreement signed to continue to run the Savoy Grill when it reopens (i.e. won't be pulling out of this as they did with Connaught).

** Gross margins of 48% look nice. If you consider in a high end restaurant food costs would be a third of the bill and some staff costs would also be in there they are doing well.

** 35% P&L tax rate looks pretty clean although cash taxes paid have fallen from £594K to £101K (gold star for the tax accountant).

** Other short term debtors have jumped from £3.5m to £8.4m. This is normally a negative sign as it represents sums due to you in the near term which you have not collected in cash. Inventories are down 2% however, which is a sign of efficient working practices (i.e. sales are up 9% but they are doing that with 2% less stock on hand).

** GRH apparently has a 25% stake in Red Fort Ltd, which is listed as a furniture retailer (!).

** Loans are at 200bp over LIBOR. Given plummenting interest rates this means interest charges will be coming down significantly (good for those debt covenants). As mentioned in the press the refinancing with RBS gives the firm £10.5m of liquidity which sounds like plenty of headroom to me. Also as report, the directors have various personal guarantees out on the loan facility (£1.6m for GR himself).

** There are also £3.5m of non-cancellable leases outstanding (effective off-balance sheet debt), although most of this is due in more than five years.

** Company has a £724K loan currently outstanding to GR. Directors were paid £2.1m in total for the year.

** The business employs 801 staff (713 restaurant staff). Average wage was £15,739 (which says it all about the industry, really).

Quite an interesting read. But remember the last stat. There's 801 ppl not earnings a particularly comfortable wage who's livelihoods are wrapped up in this. And for the dedicated consumers among you that includes a large part of London's fine dining scene.

So its not all about Big Sweary.

J

More Cookbooks than Sense - my new Cookbook blog!
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Interesting jon

I think red fort is his wifes business pre dating her tv career, seem to remember she had some form of shop

And whilst the numbers look ok in the context of analysis we know theyre historic and nowwdays its the outlook statement we read first!

Im sure there ll be bigger casualties of this recession than grh

Edited by Gary Marshall (log)

you don't win friends with salad

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Red Fort was Tanas shop by the Boxwood cafe in the berkley hotel, it closed at least 3 years ago i think if i remember correctly, maybe as many as 5years ago

"Experience is something you gain just after you needed it" ....A Wise man

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I know it's not the UK but after reading this thread I asked at one of the shops of a local premium providore whether the downturn in people going to restaurants and reported return to entertaining at home had impacted them positively.

The manager told me that they had a 5% increase in business that he thinks is directly related to the impact of the economic downturn. Factor in a loss of business as a consequence of changes in circumstances and that is a lot of people moving to entertaining at home.

Nick Reynolds, aka "nickrey"

"The Internet is full of false information." Plato
My eG Foodblog

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... Directors were paid £2.1m in total for the year.

** The business employs 801 staff (713 restaurant staff). Average wage was £15,739 (which says it all about the industry, really).

...

Clearly that must mean a LOT of people on VERY low wages - but nevertheless it'd be interesting to hear just how that average was calculated (accounting for staff turnover, 'part-timers', etc).

If its wages divided by full-time headcount, then actually rather more than half are going to be getting below that 'average'.

"If you wish to make an apple pie from scratch ... you must first invent the universe." - Carl Sagan

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