Activities

Gourmet Holdings is the former Madisons coffee-shop operator that transformed itself into a restaurant and gastropub operator in 2004.

The reinvented group currently has three main divisions. Richoux is a chain of four English-style restaurants in London that was founded in 1909 and has recently expanded into the Middle East through franchising.

The gastropub division is made of the Bel and the Dragon chain, offering British and Mediterranean cuisine, and the Gastronomic Pub Company of individually-named establishments that have been converted to the Bel offer of Mediterranean and British cuisine.

Timeline

• 1992: City Gourmets opens two franchised London coffee shops.
• September 1995: City Gourmets is bought by Gareth Lloyd-Jones and Simon Broackes and adopts the trading name of Madisons Speciality Coffee Bars
• 1998: City Gourmets buys Newultra, a chain of six coffee shops operating under the Rendezvouz name, for £1.2m.
• May 1998: The group buys Barons Patisserie, a South Wales bakery that supplies pastries to its Cardiff and six London coffee shops.
• June 1998: City Gourmets floats on the Alternative Investment Market (AIM) after reversing into investment vehicle Lanica Trust.
• 1999: The group buys the Carwardine chain of seven coffee bars in the South West.
• February 2000: City Gourmets changes its name to Madisons Coffee plc. It buys two Richoux coffee shops in London from Groupe Chez Gerard.
• August 2000: Madisons buys the four London Richoux restaurants from Groupe Chez Gerard for £2.7m and raises £4.4m through a share offer. By October, the group has a total of 44 restaurants and coffee shops in the south west, London and M25.
• September 2001: Madisons retreats from the over-saturated London market with the sale of eight coffee shops in the capital to Starbucks for £1.4m. It plans to develop Madisons in the provinces and Richoux in London and overseas, and signs its first franchise agreement for Richoux in the Middle East.
• October 2002: Madisons sells three Rendezvous bars to La Brioche Dorée for £465,000. It offloads its last London coffee bar, in Wimbledon, later in the month.
• November 2003: The group announces plans to reposition itself in the casual-dining branded restaurant market. It sells its remaining 27 coffee shops to the Out of Town group for £2.3m, leaving it with five Richoux restaurants. . 
• June 2004: The group is renamed Gourmet Holdings. It raises £2.7m from a share placing to fund acquisitions and buys three Bel and the Dragon gastro pub restaurants for £6.28m. Michael and Andrea Mortimer, who founded the chain in 1997, retain the Reading pub as part of the deal.
• November 2004: Gourmet Holdings buys the Five Bells in Stanbridge, Leighton Buzzard, and Talk House in Stanton St John, Oxfordshire, from Traditional Freehouses.
• August 2004: It buys the Highwayman pub restaurant in Checkenden, Oxfordshire.
• December 2005: The group raises a total £5.2m from the placement of 14.4 million new shares. The net proceeds of £4.9m are earmarked to buy the freeholds of some restaurants and roll-out the pub-restaurant format. 
• January 2006: The group completes its acquisition of the Bel and the Dragon group and snaps up the remaining Bel venue in Reading for £3.85m in cash. The 130-seat riverside pub-restaurant has an extra 100 seats on an adjacent barge which also provides staff accommodation below. Gourmet Holdings also sells its bakery, Barons Patisserie, and closes its outside catering business, Capital Cuisine.

Financial snapshot

Full year

Turnover: £9.7m (2004: £7.6m)
Operating profit: £421,000 (2004: -£129,000)
Pre-tax profit: £517,000 (2004: £775,000)

Half year

Turnover: £5.6m (2005: £5.35m)
Ebitda: £439,000 (2005: £680,000)
Pre-tax profit: -£160,000 (2005: £313,000)

Financial year end: 26 June 2005
Half year end: 8 January 2006

Operating data

Number of staff: about 250
Total number of pubs and restaurants: 13

Richoux restaurants: six – four in London (Mayfair, Piccadilly, Knightsbridge, St Johns Wood) and two franchised units in the Middle East. 
 
Bel and the Dragon: four- in Cookham, Reading and Windsor in Berkshire, and Godalming in Surrey.

The Gastronomic Pub Company: three
The Talk House, Stanton St John, Oxfordshire
The Highwayman, Checkenden, Oxfordshire
The Five Bells, Stanbridge, Berkshire

Strategy

“The Group has much opportunity with two excellent brands whose core units trade well and have demonstrated the criteria from which a larger estate can be built. We are seeking to expand both Richoux and Bel and the Dragon in a measured way that will deliver value to shareholders."

Source: interim results statement, 8 January 2006

Chief executive

Gareth Lloyd-Jones

Key directors

Chairman: Nigel Whittaker
Managing director: Andrew Guy

Contact

3rd Floor, Eterint House
56-58 Putney High Street
London
SW15 15F

Tel: 020 8394 5555

Website: http://www.gourmetholdings.co.uk

Commentary

Madisons was one of the casualties of the booming coffee bar market but it has successfully changed its style and its fortunes by reinventing itself as a restaurant and gastropub operator in the casual dining sector.

The group sold off its coffee shop business in 2003 and, for the six months to January 2004, posted its first half-year pre-tax profits since its flotation in 1998. In April 2004, it hired City Centre Restaurant veteran Andrew Guy on a part-time basis to head up its acquisition strategy and, by June, it had snapped up the Bel and Dragon chain, when Guy became managing director.

Bel and the Dragon was bought for its roll-out potential,  but while the ensuing three gastropub acquisitions have been converted to the Bel format, they have retained their original names.

Guy says that, while all newly-acquired pubs will adopt the Bel format, not all will take on the Bel name if they are already well-established locally. The non-Bel pubs operate in the Gastronomic Pub Company division.

The plan is to buy more quality pub-restaurants in the south of England within a one-and-a-quarter mile drive from London. Gourmet Holdings also intends to expand its Richoux chain of restaurants in the UK (initially in London) and overseas through franchising.

The group transferred its two rural Oxfordshire pubs - the Talk House and the Highwayman - from its continuing businesses following their underperformance in the half-year to January 2006 but retained their ownership and operation. It announced its intention to focus on urban and semi-rural locations in the future. 

Philip Kaye (creator of the Garfunkel’s restaurant brand and father of Ask founders Adam and Sam) has taken a 13.5% stake in Gourmet Holdings.