Activities

Loch Fyne Restaurants is a rapidly-growing chain of seafood restaurants that was snapped up by national brewer and pub operator Greene King in August 2007.

Loch Fyne was launched in 1998 as the sister company to oyster supply company Loch Fyne Oysters. The group also runs small hotels above three of its restaurants.

In 2003, it bought the Le Petit Blanc chain of restaurants which, as Blanc Brasseries Ltd, continued to operate independently until its sale to a management buy-out in early 2006 that included many of the directors of Loch Fyne Restaurants.

Timeline

• 1977: Chairman John Noble and biologist Andrew Lane set up Loch Fyne Oysters at Cairndow, at the head of Loch Fyne in Argyllshire.
• 1987: The oyster company opens its first restaurant on the site of an old cowshed next to the loch, attracting mainly visiting tourists. Two more follow, in Nottingham in 1991 and in Peterborough in 1993.
• 1998: Loch Fyne Restaurants is launched. Noble and Lane contribute the two southern restaurants but retain the original lochside site, while Mark Derry and partner Ian Glyn contribute the equivalent in cash. Private investors add £1.2m to the pot.
• 2000: Loch Fyne raises £3.5m from investors by means of a five-year Enterprise Investment Scheme.
• 2001: The group opens 11 new restaurants.
• 2002: Noble dies in February and non-executive director Jeremy Hardie, former chairman of the WH Smith Group, becomes chairman of the restaurant group. The group raises £2.7m from investors.
• 2003: Loch Fyne Oysters is bought by its 100 employees, backed by a £2m loan.
• January 2003: Loch Fyne Restaurants opens its first hotel, the nine-bedroom Milsoms hotel above its Bath restaurant, having held the lease on the building since 2000.
• June 2003: Loch Fyne is successful in its £1.1m bid for Le Petit Blanc (then a chain of four brasseries created by Raymond Blanc and part-owned by Orient-Express Hotels), which had gone into administration two months before. Blanc and his management team retain a 25% share in the chain.
• October 2003: Private equity firm Hutton Collins tables a £30m offer for Loch Fyne through holding company Premium Casual Dining. Under the deal the holding company would be jointly owned by Hutton Collins and the Loch Fyne management team. The move is passed by shareholders in November.
• March 2006: Loch Fyne sells the now five-strong Blanc Brasseries to a management buy-out led by Derry, Glyn and Blanc for £3m, including debt. Despite sharing directors, Le Petit Blanc is now completely separate from Loch Fyne.
• January 2007: Loch Fyne signs its first licensing agreement, with contract caterer Sodexho, to open a Loch Fyne franchise at Sandown racecourse in what is hoped to be the first of a number of joint ventures.
• July 2007: National brewer and pub operator Greene King reveals it is in talks that may lead to the purchase of Loch Fyne Restaurants for an estimated £70m.
• August 2007: Pub operator and brewer Greene King reaches agreement to buy Loch Fyne for £68.1m. Senior managers agree to stay on to help expand the 36-strong group, which Greene King intends to double in number in the medium term.
  

Financial snapshot

Turnover in the year to 31 December 2006: £29m (a 17% rise on 2005)

Operating data

Total number of Loch Fyne restaurants: 38 (including the Cairdow outlet in Scotland owned by Loch Fyne Oysters)
Number of company-operated restaurants: 37
Number of hotels: three Milsoms hotels above the Loch Fyne restaurants in Bath (nine bedrooms), Henley (six bedrooms) and Poole
Number of employees: approximately 1,000
Average spend per head: £26

Restaurant locations:
Bath, Beaconsfield, Bluewater, Bristol, (Cairdow), Cambridge, Chelmsford, Cobham, Egham, Edinburgh, Elton,Farnham, Gosforth, Guildford,  Harrogate, Henley-on-Thames, Ipswich, Knowle, Knutsford, Leeds, London (Barnet, Covent Garden, Loughton, Twickenham), Mere Green, Midhurst, Norwich, Nottingham, Oxford, Poole, Portsmouth, Reading, Sevenoaks, St Albans, Stockton Heath, Winchester, Woburn, York

Strategy

"Loch Fyne has a strong development pipeline and plans to increase the number of outlets by around 20% within this financial year.  Over the medium term, Greene King sees potential to double the number of existing sites, including the conversion of a number of Greene King pubs. Senior management have committed to staying with the chain to facilitate its ongoing growth within the Greene King group.

In the twelve months to June 2008, Loch Fyne's pre-overhead EBITDA is projected to be in excess of £10m, and its post-overhead EBITDA in excess of £8m.  The acquisition will be financed from existing debt facilities and is expected to be earnings-enhancing in the first full year of ownership."

Source: Greene King, 7 August 2007

Chief executive

Mark Derry

Key directors

Chairman: Jeremy Hardie
Managing director: Richard Morris
Company secretary: Bob Craig
Financial director: Helen Melvin
Property director: Jeremy Brown

Contact

175 Hampton Road
Twickenham
Middlesex
TW2 5NG

Tel: 020 8404 6686
Fax: 020 8404 0115

E-mail: enquiries@lochfyne.net
Website: http://www.loch-fyne.com

Commentary

The group plans to open new restaurants in Taunton, Milton Keynes, and Warwick by the end of 2007.

2008 openings will include a venue at the £950m Liverpool One development.