Cloverleaf Restaurant founders step down from the board: Former Whitbread executives Gary Douglas and John Winder have stepped down from the board of the Cloverleaf Restaurants business owned by Greene King. Their departure from the board comes two years after they sold the business, which included 12 pub restaurants at the time, to Greene King for £55.8m. At the time of acquisition, Greene King planned to invest around £25m to finance ten new Cloverleaf openings within two years. The sale price equated to 8.7 times annualised earnings before interest, tax, depreciation and amortisation. Chief executive Rooney Anand pointed out at the time that the brands’ carvery offer added to the appeal of the acquisition. He said in 2011: “It is growing strongly both organically, with like-for-like sales growing ahead of our existing retail business, and through additional sites. There is a strong pipeline of new sites with a minimum of ten additional outlets expected to open within two years. The acquisition, combined with a planned investment of around £25m in the first ten pipeline sites, will utilise the remaining balance of our rights issue proceeds.” According to the Cloverleaf website, there are 16 sites currently open. A source said: “It would appear Gary and John have completed their earn-out after the Greene King deal.” There are at least two more Cloverleaf sites in the pipeline - a 1,291 square metre site in the Team Valley that is due to open in June this year and work has started on the first site in Scotland which will be located on the outskirts of Glasgow. Cloverleaf sites take around £40,000 per week although later, larger openings have hit circa £50,000-a-week. In May 2011, Greene King reported that the most recent five Cloverleaf openings were producing Ebitda of circa £700,000 per annum. Its dessert offer provides a USP with high quality desserts served in large portions. The most recent Cloverleaf opening was Pear Farm Tree in York in November last year.
Propel Opinion by Paul Charity: The acquisition of Cloverleaf by Greene King in January 2011 was not cheap at £55.8m for twelve pub restaurants – a lumpy £4.65m each. But Greene King’s philosophy, as espoused by its chief executive Rooney Anand, has been that it should not be afraid to pay top dollar for top quality assets. At an estimated cost of around £2.5m for each pub restaurant that has followed, the company has so far spent circa £66m to create 16 sites, which bring average price down to £4,125,000. This is clearly at the top end of investment levels normally seen in the sector, but Greene King was keen to point out in 2011 that site Ebitda levels are extremely high at £700,000 per annum for later openings. Industry sources reported that Marston’s had baulked at the time of the deal at paying over £4.5m a site to buy Cloverleaf, preferring to stick to its site-by-site new-build strategy. Greene King sources were keen to point out the advantages of buying quality assets, already trading, in seeing a return on investment straight away. The timetable for new Cloverleaf openings seems to have slipped but the brand is still in expansion mode. It would appear to offer more potential for growth than Greene King’s Loch Fyne business, which was bought for £68.1m in August 2007 when it had 36 sites – half a decade later it trades from 42 sites.
