Gordon Ramsay’s restaurant group stories £12m in pandemic losses

Gordon Ramsay’s restaurant empire has reported nearly £12m in losses and reduce nearly 300 employees due to closures and restrictions through the Covid-19 pandemic because the businessman warned of the potential impression of hovering inflation and rising payments on restaurant eating habits.

The superstar chef runs or owns a stake in 35 eating places within the UK – together with Pétrus, Bread Avenue Kitchen, Restaurant Gordon Ramsay and three on the Savoy – and has licence agreements for an extra 13 worldwide.

The newest revealed firm accounts for Gordon Ramsay Eating places present that his companies made a pre-tax lack of £6.84m within the 12 months to the tip of August 2021, after a £5m loss in the identical interval within the previous 12 months, which included the primary months of the pandemic.

Final 12 months, Ramsay mentioned his eating places had suffered tens of tens of millions of kilos in income losses due to cancelled reservations attributable to coronavirus.

The newest corporations accounts spotlight the acute monetary stress the hospitality commerce has confronted, with the £26.2m in revenues Ramsay’s eating places made in its final monetary 12 months lower than half the £54.7m they made earlier than the pandemic hit, in 2019.

Within the 12 months to the tip of August 2019 the corporate made £15m in earnings. As the final word controlling celebration, Ramsay successfully earns what the corporate makes in post-tax earnings, which was £11.9m in 2019.

The corporate mentioned that since February, when the final of the restrictions on hospitality companies had been lifted in England after the preliminary outbreak of the Omicron variant, its eating places had bounced again to profitability and gross sales had been “constantly forward of pre-pandemic buying and selling”.

Nevertheless, with family budgets persevering with to be squeezed by hovering vitality payments and inflation hitting a 40-year excessive, the corporate warned of powerful buying and selling situations forward.

“The Covid-19 pandemic had a major impression on the group for a second 12 months, and there are new dangers to contemplate related to inflationary pressures and shopper spending,” it mentioned.

The monetary filings reveal that the restaurant group can stand up to a possible 20% discount in gross sales – the identical stage because it recorded through the first Omicron outbreak, from late November to February – with out resulting in money shortages or breaking lending covenants.

Ramsay additionally turned to the federal government’s coronavirus job retention scheme for £6.5m to assist employees over the previous two years, and one other £524,000 in “native authorities assist grants” final 12 months.

The monetary filings additionally present that employees numbers had been decreased from 914 to 622 between August 2020 and August 2021 as the corporate tried to chop tens of millions from its wage prices through the pandemic. Almost the entire losses had been restaurant employees.

Gordon Ramsay Eating places, which has £23.7m of web debt, additionally has £13.7m in financial institution loans secured by the group and “private ensures”. The accounts present that as of 31 August final 12 months, Ramsay had given £10m in private ensures over the 2 years of the pandemic.