By Mark Wingett, M&C Report
If I had to put forward one man who could dominate the UK's eating and drinking-out scene over the coming 12 months, I would be hard pressed to look past Tim Bacon, the chief executive of Living Ventures.
There have been enviable glances towards the North West, and Manchester in particular, by consumers and operators alike at the number and quality of successful concepts borne from the imagination of Bacon, his trusted sidekick Jeremy Roberts and team. That vision is now set to be brought to national attention as the group gears up to achieve its ambition of becoming a £100m-turnover company. And it has the strategy in place to do so.
It is already halfway there. In the 53 weeks to 31 March 2013, total revenue increased by 23% to £47.3m, while EBITDA rose 39% to £4.1m. Profit before tax, after taking into account all interest was £1.55m, an increase of 315% year on year. The group invested £4.1 million in the year in capital expenditure, opening four new sites.
It strategy centres across a number of different sub sectors of the restaurant market ranging from casual to fine dining, capturing market share in all spend and demographics within a region. Last year, with £2.7m of new funding from Paul Campbell's Hill Capital, it added a concept for the pub sector to that strategy through the New World Trading Company.
The philosophy is similar to that of investing across the yield curve. The company has built the foundation of its vision in Manchester, where it now has 10 restaurants, and has begun to evolve in similar fashion in Liverpool and Leeds with plans to reach its £100m target using this template and recreating this success in other cities as well as expanding into London.
Bacon, who I understand is soon to add a new non-exec role in the sector, says: "The group is developing really well. We believe that we now have the constituent parts for an offer that can be applied in other cities other than Manchester. Our focus will be to continue to build a highly cash generative and profitable business."
It currently operates 32 restaurants across four core brands: Gusto, Blackhouse, New World Trading Company, The Alchemist and three development brands Australasia, Artisan and Manchester House. A management reshuffle last year, saw Paul Moran become a managing director of the group overseeing Australasia, Manchester House, Blackhouse and Artisan, with Sue Crimes looking after Alchemist and Gusto.
The company is currently in advanced talks regarding new funding for the latter concept, in which The Restaurant Group has a c35% stake, with plans to grow the nine-strong brand to up to 20 sites. Total revenues increased 7% to £16.1m at Gusto in the year, which the company said was achieved through cover and price growth. Its seven-strong Blackhouse Grillalso had a successful year with revenues increasing 5% to £14.2m.
Revenues in the four-strong New World Trading Company rose from £1m to £4.5m in the year including two new openings. The company plans a further opening under the concept in Chester later this spring and the pipeline for the pub format for 2014 is strong, with London, Birmingham and Glasgow mooted destinations.
Australasia the group's first foray into up tempo fine dining opened in 2011 in Manchester's city centre. Sales at the site were up 38% year-on-year.
In the current financial year the business has continued to trade well. Most recently over the Christmas period, the group saw sales up 43% on last year. Most of this growth came from the six new sites opened over the last year, but there were also some very impressive like for like performances particularly through Gusto at Albert Dock, the New World Trading Company sites and Australasia. Overall, like-for-like sales were 9% higher than last year.
It is thought that the group will look to open up to 11 sites in its current financial year. The Alchemist is set to open its first bar in London in 2014 with future openings set for the brand later in the year, while a Blackhouse opening in Liverpool is on the cards for the summer.
Bacon and Roberts have already won over Manchester, and are in the process of winning consumer hearts in Liverpool and Leeds, London and the rest of the UK waits to be wooed.
A menu of Pacific Rim flavours underpinned by European cooking tradition, an exotic blend of Indonesian and Southeast Asian influences. Australia's strong ties with Japan also help determine taste and style.