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Tue 27th Aug 2013 - Breaking News - Horler becomes non-exec at Red Hot
James Horler becomes non-executive at Red Hot World Buffet: Industry veteran James Horler is to become a non-executive director at Red Hot World Buffet in the wake of the acquisition of a majority stake by Luke Johnson’s Risk Capital Partners. Horler is expected to work intensively on operational improvements at Red Hot, which was founded by Helen and Paramjit Dhaliwal. Propel understands that Risk Capital Partners has bought the shares of Paramjit Dhaliwal’s parents who held a majority stake in Helen Cuisine’s Limited, which owns four of the company’s seven sites. Luke Johnson told Propel this morning that the company had a low single digit rent to turnover ratio, held a leadership role within the buffet segment in terms of quality - and the offer had broad appeal within the family market. He also argued that the size of Red Hot’s restaurants offers major economies of scale that can be further maximised going forward. Johnson said: “I think children and families like the help yourself and fixed price meal aspects of Red Hot World Buffet. It also has a very attractive rent roll – as low as any restaurant group of a similar size.” Johnson said that the focus in the first year would be on opening a site in the Midlands and retro-fitting three or four of the existing sites to apply some of the learnings of the latest opening in Nottingham to earlier sites like Milton Keynes. Sites taking an average of £4m per year are subject to a “lot of wear and tear”, Johnson said. The medium term plan will be to add one new site per year for the next three years. “We’d like to open at least one site per year - they’re not cheap to open at upwards of £1.5m per site. This is one of the areas – property – where we feel we might be able to help.” On Sunday, Johnson told The Sunday Times that August had been his busiest month ever in terms of deals. This morning, he hinted to Propel that another deal in the leisure sector could come as early as this week. Asked if the Red Hot deal had been one of the harder ones to get over the line, Johnson said: “I think that’s an understatement. It’s a sign of the times that deals are very difficult to consummate.” There were very strong rumours in just the past fortnight of the Dhaliwals agonising over whether to sell such a sizeable stake in their business. In the event, the couple has opted to bring Luke Johnson’s experience in growing restaurant businesses on board – and allow original family investors to realise their investment in the business. Asked about the attraction of Red Hot to consumers, Paramjit told Propel at the end of last year: “What we’ve done is take the best aspects of a la carte, and the best aspects of buffet, and create our own version of it. A la carte is high quality food, freshly cooked with a wide choice, and with buffet you have speed and variety. Added to that, people know that irrespective of how much they have, it’s one price. Consumers enjoy the variety, and the chance to make up their own plate of food. The other thing that appeals is the speed.”

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