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Morning Briefing for pub, restaurant and food wervice operators

Thu 21st Apr 2016 - Luke Johnson – ‘my new investment, Gaucho, could double in size’
Luke Johnson – ‘my new investment, Gaucho, could double in size’: Sector investor Luke Johnson has suggested that Gaucho Grill and sister brand CAU, in which he has taken a significant minority stake on a personal basis rather than through his Risk Capital Partners vehicle, could double in size "over the medium term". The company, which was acquired by private equity firm Equistone for circa £100m at the start of this year, currently has 18 CAU sites as well as 15 Gaucho sites. It also operates the brand in Dubai, Hong Kong and Buenos Aires. Industry sources suggest its flagship site in Piccadilly turns over circa £10m a year – a figure that is not dissimilar to turnover at The Wolseley. Johnson, who has become chairman of the company and is making his first investment in a steak company, told Propel: “It is highly profitable, tightly managed and has excellent margins. In CAU, it also has a new avenue for growth.” Gaucho reported Ebitda before pre-opening costs rose to £11m in the year to 31 December 2014, up from £9.9m the year before. Company sales rose 11% to circa £61m, up from £55.5m the year before, driven by the expansion of CAU. Zeev Godik, chief executive of the Gaucho Group, said that Johnson’s appointment, and his acquisition of a stake in the company, would bring refreshing, new and highly respected expertise into the business: “Luke has been at the forefront of some of the most dynamic expansion programmes in hospitality. He has overseen over 500 restaurant and pub openings, more than any other individual in the sector, and his record in launching successful IPOs is second-to-none. His financial astuteness will be an invaluable asset for our own future plans, but what is equally important to us is a shared passion for the industry, his understanding of what makes a restaurant tick when it comes to quality, service and repeat business.” Johnson added: “I am very excited to be working with Zeev and his team. I have been an admirer of Gaucho for many years, and look forward to helping with the expansion of the business. I see a great future for Gaucho and its new sibling CAU, both here and abroad, which is why I have invested a substantial sum in backing the business.” The latest investment by Johnson adds to his sector portfolio which includes Laine Pub Company, Gail’s Bakery, Brighton Pier Company, Draft House, Small Batch Coffee, Red Hot World Buffet, Patisserie Holdings and 3Sixty restaurants. Asked if he was looking to make further investment, Johnson told Propel: “I’m always looking – I like to be busy.” CAU is now the company’s primary avenue growth with as many as eight to ten sites planned but the company is also looking to add to its Gaucho estate – it is looking at a site in Birmingham currently. Gaucho offers fine dining with an emphasis on authentic, high quality, Argentinian steaks and an extensive wine list. CAU focuses on cuisine from Buenos Aires and is consistently highly rated by customers for the quality of the food and the overall dining experience. It has grown rapidly since its launch in 2010 and currently has 18 outlets across the UK as well as one in Amsterdam.

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