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Thu 27th Apr 2017 - Richoux reports £6.7m loss, rebranding and closure of restaurants, plans fund-raising
Richoux reports £6.7m loss, rebranding and closure of restaurants, plans fund-raising: Richoux Group, the owner and operator of 18 restaurants under the Richoux, Dean’s Diner, Villagio, and Friendly Phil’s brands, has reported turnover increased 2.2% to £13.32 million in the year to 25 December 2016 (2015: £13.03 million). Adjusted Ebitda decreased to £200,000 (2015: £1.64 million). It had cash of £3.86 million at year end (2015: £4.40 million). Chairman Simon Morgan stated: “Revenue for the 52 week period ended 25 December 2016 increased 2.2 per cent on the 52 week period ended 27 December 2015 to £13.32 million (2015: £13.03 million). Adjusted Ebitda before pre-opening costs, impairment, reorganisation costs and onerous lease provision decreased to £0.20 million (2015: £1.64 million). Adjusted operating loss before pre-opening costs, impairment, reorganisation costs and onerous lease provision was £0.63 million (2015: profit £0.91 million). The net loss for the period was £6.7 million (2015: profit £0.37 million). This decrease largely reflects the impairment charge incurred in the year of £5.04 million, up from £0.53 million in 2015, reorganisation costs of £0.51 million, and pre-opening costs of £0.10 million, down from £0.18 million in 2015. The board led by Jonathan Kaye, has undertaken a strategic review of all restaurants and operations of the group. As part of this review certain restaurants have been rebranded and/or closed which has led to the significant impairment charge and onerous lease provision. The directors are not recommending the payment of a dividend. Richoux is an all day cafe and brasserie established in London in 1909. The group currently has seven Richoux restaurants in Knightsbridge, Mayfair, Piccadilly St John’s Wood, Gloucester Arcade, Port Solent, and Chislehurst. The Port Solent and Chislehurst restaurants were previously Villagio restaurants, and were converted into Richoux restaurants in February and March 2017 respectively. The group currently has two Friendly Phil’s restaurants, in Hempstead Valley which opened in March 2017 and Port Solent, which opened in April 2017. These restaurants were previously Dean’s Diner restaurants. The group currently has three Dean’s Diner restaurants; in Chatham, Braintree and Fareham and the intention is to convert these to Friendly Phil’s restaurants in the coming months. The Dean’s Diner restaurant in Bicester was closed in November 2016 and sold in January 2017. The Dean’s Diner restaurants in Trowbridge and Yate were closed in November 2016. The Dean’s Diner restaurant in Orpington was closed in March 2017 and the lease was surrendered in April 2017 for a reverse premium of £220,000. The group currently has four Villagio restaurants in Andover, Basildon, Hammersmith, and Chatham. As noted above, the Villagio restaurants in Chislehurst and Port Solent have been rebranded as Richoux restaurants and the Villagio restaurant in Canterbury has been rebranded as a Zintino restaurant. The Villagio restaurant in High Wycombe was closed at the end of December 2016 and sold at the end of January 2017. The group also has two Italian restaurants; one trading as Zippers Bar, Restaurant and Grill in Chatham, and one trading as Zintino in Canterbury. In September 2016 Edward Standring resigned as a director of the company. In October 2016 the company announced its intention, subject to shareholder approval, to appoint Jonathan Kaye, the founder and former chief executive officer of Prezzo, as chief executive officer of the company. Over the previous 12 month period the Directors had reviewed the group’s growth strategy going forward and had concluded that the company would benefit from new leadership. Following shareholder approval, Jonathan Kaye became chief executive officer on 15 November 2016.On 24 November 2016 the company announced the appointment of Mehdi Gashi as executive director. Mehdi Gashi was previously a director of Prezzo. On the same date, Salvatore Diliberto moved from an executive to a non-executive director role. Like many restaurant groups in the casual dining sector, trading in the first quarter of this year has been difficult. In addition, during this period trading in some of our restaurants was interrupted whilst we converted or refurbished them. The impact of temporary closures will continue during the second quarter. Whilst our new Richoux and Friendly Phil’s restaurants have only been trading for a brief period, the early signs from them are encouraging. The cost of converting or refurbishing restaurants and of closing underperforming restaurants, the reduction of income due to temporary closures and the current trading climate have led the board to conclude that it will need to approach shareholders for further funds in due course. The board has had informal discussions with a number of the company’s key stakeholders, who have indicated that it would be their intention to support such a fund raising. We propose to seek the necessary authorities to allot shares in connection with such a fundraising at our 2017 annual general meeting.”


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