Inside Track by Dominic Walsh
I have a question for you: how much longer will John Lovering remain at the helm of Mitchells & Butlers? When he was parachuted into the All Bar One operator’s boardroom at its January’ AGM after a shareholder coup, he outlined a strategy based on speeding up the disposal of non-core assets; refocusing the group’s development and branding programmes on a clutch of key brands like Harvester and Vintage Inns; and revamping its operational and management reward systems to boost returns. Almost a year on and it looks like job done for Lovering. In the short time he has been chairman, he has managed to nail down disposals of its Innkeeper’s Lodges, the majority of its non-core wet-led pubs as well as its Hollywood Bowl business. OK, so selling its Alex business in Germany may not happen any time soon, but the £550m of proceeds of disposals have made a decent dent in the group’s debt burden and given it the firepower to pursue any interesting acquisitions that come along. The purchase of 22 Ha Ha Bar & Grill units for £19.5m was a slightly left-field deal, and its plan to spend another £8.5m converting them to its All Bar One and Browns concepts when they are already in good nick does smack somewhat of the capex-mad days of old. But good progress is being made on the branding strategy, with 54 conversions completed and 23 single-site acquisitions in the pipeline. In trading terms, like-for-like sales have recovered from the World Cup blip and Lovering’s metaphorical kick up the wotsit is doing wonders for retail operating margins, which will hit 16.5% for the full-year, up from 15.3% the year before. All of which has raised the prospect of the resumption of dividend payments, possibly as early as November’s full-year results. Which brings me back to my original point. Given that the former Laurel Pub Company chairman is a turnaround specialist who focuses mainly on the private equity sector (where the personal rewards are bigger), it is hard to see him sticking him around very much longer at M&B when he can put a tick against the vast majority of the tasks he outlined a few months ago. Chief executive Adam Fowle, who in truth was already on the case on most of the issues, is more than capable of delivering on the rest of Lovering’s agenda and I’d be surprised if the two of them have not already discussed the possibility of Lovering moving on. An end to Ramsay’s nightmare? Is Gordon Ramsay’s kitchen nightmare coming to an end? It emerged yesterday that in the 11 months to the end of August the foul-mouthed chef’s business empire produced a profit of £4.2m, up from about £2.5m for the same period the year before. This still doesn’t get him anywhere near the level of profitability of TV chef rival Jamie Oliver, whose Jamie’s Italian chain is producing storming numbers, but it is nevertheless a pretty decent turnaround on the losses that forced Ramsay and his father-in-law Chris Hutcheson to pump £5m of equity into the business to prevent its collapse. The fly in the soup to all this is the delay to yesterday’s scheduled reopening of the Savoy Grill, which will now reopen at the end of November after “small structural issues with the building”. Given that the restaurant made a profit of more than £1m in the year before it closed, its importance to the slimmed-down Ramsay empire cannot be underestimated. But any attempt to read something more sinister into the delay should be discouraged. Stuart Gillies, the chef patron, has spoken enthusiastically about the project, and veteran Savoyards will draw comfort from his confirmation that old favourites like peach melba, lobster thermidor, omelette Arnold Bennett and grilled liver on toast will appear on the menu alongside a slightly broader range of items (including several lighter dishes). One comfort for Ramsay is that, despite his well-publicised problems, both personal and business, his broadcasting and media takings have scarcely missed a beat. Everybody will have a view on his combative style, but Ramsay’s talents – both in front of the camera and behind the stove – remain undimmed. He may boil over from time to time but in business terms he is has not completely gone off the boil. Dominic Walsh is leisure industries correspondent for The Times newspaper