Activities

Tragus Holdings is one of the UK’s largest independent restaurant operators. Its 160mid-market restaurants serve more than 12 million meals each year.

The company was formed in 2002 from the £25m acquisition of the Pelican Group and BrightReasons Group from Whitbread, which bought the companies in 1996 for £133m and £46m respectively in a deal that netted it nearly 300 restaurants.

Tragus’s key brands are the Parisian bistro-style Café Rouge and the Italian Bella Italia. Tragus also operates a brasserie division whose menus cover Italian (Amalfi and Mamma Amalfi), Continental (Oriel), Belgian-style restaurants and bars (Abbaye) and Spanish cuisine (Leadenhall Wine and Tapas Bar).

Key brand(s):
Bella Italia, Café Rouge

Other brand(s):
Mamma Amalfi, Amalfi, Abbaye, Oriel, Leadenhall Wine and Tapas Bar

Timeline

• May 2002: Whitbread sells the 153-strong Pelican Group and BrightReasons Group to Tragus Holdings for £25m in a management buy-in backed by private equity firm ECI Ventures. The buyers include chief executive Ralph Findlay, former boss of the Aroma coffee chain, and chief operating officer Gavin Williams, a former managing director of both Bella Pasta and Aroma.
• December 2002: Tragus announces plans to rename Bella Pasta as Bella Italia in an effort to sell more pizzas. The rebranding is completed by May 2004.
• May 2003: Tragus opens a chef training and menu development centre in North Finchley to drive its menu changes.
• July 2004: Tragus raises an extra £13.5m from Barclays to fund expansion
• January 2005: Tragus is bought by private equity firm Legal and General Ventures which has arranged a package of £107m to buy the group and provide both working and acquisition capital. It puts a new management team in place.
• July 2006: Tragus opens its first Spanish concept (called Ortega) on the site of the 190-seat Bella Italia in Harlow, Essex. The group plans to add another three sites across the country during the year. If successful, Ortega is destined to become the group's third core brand.

Financial snapshot

Full year

Turnover: £116.6m (2004: £101.9m)
Earnings before interest, tax, depreciation and amortisation: £16.7m (2004: £12.8m)
Operating profit: £12.3m (2004: £9.4m)

Financial year end: 29 May 2005

Operating data

Total number of outlets: 160 (135 outside London)

Café Rouge: 82 (high street and concessions)
Results for the year to 29 May 2005:
Turnover: £60m (2004 £50.8m)
Ebitda: £13.8m (2004: £13.8m)

Bella Italia: 64 (high street and leisure parks)
Results for the year to 29 May 2005:
Turnover: £43.9m (2004: £38.4m)

Brasseries: 14
Mamma Amalfi: eight (in shopping centres and near cinemas)
Amalfi: one (in Old Compton Street, London)
Abbaye: three (in London’s Old Brompton Road, Bromley, and Smithfield)
Oriel: one (in Sloane Square, London)
Leadenhall Wine and Tapas Bar: one (in the City of London)

Number of employees: about 3,800

Strategy

“Eight new restaurants have opened since May 2004, as the group successfully delivers on its strategy to build turnover and Ebitda while driving operating profitability. These new sites are currently generating an average return of 40%, demonstrating the tremendous potential of our key brands. We aim to open arund 12 restaurants each year and have secured funding to enable us to open 36 restaurants over the next three years. There is ample opportunity in the UK to double the size of the Café Rouge estate."

Source: Financial year results, 13 October 2005

Chief executive

Graham Turner

Key directors

Property director: Phil Derbyshire
Chief financial officer: Mohan Mansigani
Marketing director: Lisa Fredman
Chief operating officer: James Parsons
Human resources director: Nick Hoad

Contact

163 Eversholt Street
London
NW1 1BU

Tel: 020 7121 3200
Fax: 020 7121 3222

E-mail: info@tragusholdings.com
Website: http://www.tragusholdings.com

Commentary

Tragus has invested £8m in revitalising its core chains, which had been regarded as tired and clapped-out brands. It has enhanced the menus, increased outdoor dining facilities across all the brands and extended the opening hours at Bella Italia and Café Rouge to cater for the growing demand for all-day dining.

Café Rouge has been refurbished and returned to its core French bistro heritage while Bella Pasta was renamed Bella Italia in a bid to sell more pizzas and has been restored to the full menu and ambience of a traditional trattoria. Thechanges appear to have paid off both financially and critically - the group scooped the Retailer Award for Turnaround Brand of the Year 2005 for the Café Rouge brand.

Since May 2002, Tragus has opened three new Bella Italias (in Plymouth, Cambridge and Nottingham) and added seven new Café Rouge venues in Heathrow Terminal One, Brighton, Portsmouth, Manchester, Bristol, the Birmingham Bullring and Bath (a conversion of a former Bella Pasta).

The rate of new openings looks set to accelerate under new owner LGV, which plans to open around 12 new restaurants a year for five years. The focus will be on the core Café Rouge and Bella Italia brands. New openings are planned in Birmingham, Glasgow, Liverpool, London and Manchester in the current financial year.

New chief executive Graham Turner sees scope for up to 200 Café Rouges but recognises the danger of expanding too quickly.