Gordon Ramsay trims fat to boost profits

Spending rose at Gordon Ramsay's Chelsea restaurant. Photo / Supplied
Spending rose at Gordon Ramsay's Chelsea restaurant. Photo / Supplied

Gordon Ramsay Holdings, the company that runs the chef's restaurants and bars, said profit jumped by 182 per cent last year after it cut costs.

Net income in the period ended August 31 rose to £1.46 million ($2.9 million) from £515,373 a year earlier.

Revenue at continuing operations slumped 19 per cent as diners shunned Gordon Ramsay at Claridge's and spent less at Maze.

Total sales fell 13 per cent to £27 million as Boxwood Cafe closed.

Ramsay's accounts are for the last full year under Chris Hutcheson, the chef's father-in-law, who was dismissed in October. Other senior managers followed him out the door. Gordon Ramsay Holdings has since acquired Petrus restaurant from Hutcheson.

"Significant legal and professional costs have been and are likely to be incurred in the coming year to resolve the many issues that have subsequently arisen," the company said.

"The group is expected to produce a robust trading performance in the coming year that will be aided by the acquisition of Petrus."

Restaurant Gordon Ramsay, the flagship in Chelsea, had an increase in average spending by customers during the year and achieved budgeted profit margins, the company said.

The number of diners at Gordon Ramsay at Claridge's, which lost its Michelin star in January last year, dropped 6.3 per cent.

Maze and Maze Grill attracted 5 per cent more diners but they spent less, resulting in a drop in revenue. Sales also declined at the Narrow, where cost-cutting led to an increase in profit.

"Gordon Ramsay continues to actively support the development of the company and its subsidiaries and has provided unsecured interest-free loans to the company of some £7.4 million as of August 31, 2010," the statement said.

Separate accounts are scheduled to be published for Gordon Ramsay Holdings International, the company that groups newer businesses. GRH and GRHI were consolidated last September and the group said if the accounts for the year that ended August 31 were consolidated, they would show pre-tax profit on ordinary activities of £200,000, compared with a loss of £7.7 million for the same period in 2009.

"Despite the continued challenging conditions for the hospitality industry, the group has reported a substantial turnaround for consolidated profits before tax," a spokeswoman said.

- BLOOMBERG

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