Administrators reveal extent of CAU’s troubles as Gaucho left with estimated total deficiency of almost £65m: Administrators have revealed the extent of CAU’s troubles, which have led to parent company Gaucho being left with an estimated total deficiency of almost £65m. In their statement of proposals filed at Companies House, joint administrators Matthew Smith and Robert Harding, of Deloitte, said the expected total deficiency would be £64,995,120. Meanwhile, a separate report on 22-strong sister brand CAU showed the company had turnover of £10,957,036 for the six months to 30 June 2018 with Ebitda of minus £464,379. For the year ending 31 December 2017, turnover was £25,498,336 with Ebitda of £1,747,025. Its net assets as of 30 June 2018 was minus £24,056,576. In the first six months of 2018, sales were down 17.2% compared with the previous year. The Ebitda generated (excluding head office costs) fell from £2.9m (before head office costs) to £1.7m between 2016 and 2017 despite the number of restaurants remaining at 22 throughout both years. After head office costs, it is estimated CAU generated a loss in 2017 of circa £1.8m. Due to the ongoing losses, CAU was reliant on the wider Gaucho group for funding to support ongoing trading. The reports also showed that as well as CAU’s “significant underperformance”, Gaucho still had a “challenging” first six months of 2018. It stated: “The Gaucho brand operated by Gioma has proved successful since the group was acquired by Equistone, generating Ebitda of £8.0m (17.2% margin) in 2016 and £5.7m (11.6% margin) in 2017. This was in part driven by successful site openings outside London (Birmingham and Edinburgh). However the first six months of 2018 were still challenging for the Gaucho brand. While revenue was up 2.2% on 2017, wider cost pressures facing the restaurant sector, including an increase in business rates, rising food prices, and the introduction of the National Living Wage, meant restaurant Ebitda margin reduced from 28.1% to 21.4%. In respect of CAU, significant underperformance resulted from a number of factors including high operating costs and wider challenges in the sector in which it operated. As a result, Ebitda generated by the CAU brand fell from £2.9m to £1.7m between 2016 and 2017 despite site numbers remaining constant at 22. In the first six months of 2018, sales were 17.2% behind the same period in 2017. Due to the ongoing losses in CAU, the sister brand was unable to pay all its liabilities as they fell due. As the company had guaranteed the secured creditors’ debt, along with Gioma and CAU, the directors of these companies concluded there was no alternative but to place all three companies into administration. The losses generated by CAU were causing the wider group to become cash constrained so the decision was taken by management in May 2018 to launch an accelerated sales process of the Gaucho business alongside consideration of a company voluntary arrangement (CVA) to wind down the CAU business. The secured creditors agreed to waive certain covenants to allow the group to implement a full sales process. A number of offers were received for Gioma as part of this process but no offers were received for CAU. However, notwithstanding significant interest in Gioma due to a number of issues raised as part of the due diligence process, including guarantees provided by Gioma in respect of CAU lease liabilities and the added complication of needing to deliver a CVA of CAU alongside a sale of Gaucho, none of the offers presented were capable of being implemented. Once it became clear there were no acceptable offers for the group and that a CVA of CAU would not be achievable, the directors held a board meeting on 17 July to resolve to place the companies into administration. Given the lack of interest from potential purchasers in the CAU business and the fact the business was loss-making, it was concluded trading was not viable and therefore the joint administrators of CAU wound down the CAU business.” Gaucho’s records showed secured creditors at the date of Deloitte’s appointment were a syndicate of five lenders acting through Lloyds Bank as the security agent owed a total of £49.0m. The administrators said based on current information there would not insufficient asset realisations to repay all secured creditors in full. There are four unsecured creditors owed a total of £4.0m. The administrators said they did not expect there to be sufficient funds to enable a distribution. The company had no preferential creditors. Since the administrators’ appointment, four of the original lenders sold their debt so the syndicate now comprises of two lenders – Investec Bank and SC Lowy. Earlier this month, they agreed to acquire Gaucho out of administration. The deal will see chief executive Oliver Meakin depart with former managing director and M Restaurants founder Martin Williams working with Gaucho to “drive the next stage of development”.

NPD – food-on-the-go market is in growth, on-premise shrinking: Britons are increasingly eating pre-prepared food and drink on the go, which is one of the fastest-growing areas of Britain’s out-of-home (OOH) foodservice industry. Latest figures from global information company The NPD Group show food-to-go consumption (off-premise but excluding delivery and drive-thru) is growing while on-premise is shrinking. For the year ending July 2018, there were 4.4 billion on-premise visits, a drop of 3.5%, versus 5.1 billion food-to-go visits, an increase of 2% – the change in just one year. In three years (since July 2015), food-to-go visits have increased 4.0%. For foodservice operators, there’s money to be made from food to go as the market has increased £2.5bn since mid-2015, three times as fast as on-premise spend. Consuming food and beverages on the premises only represents 42% of the 11.3 billion OOH annual foodservice visits in Britain. Food to go represents about 48%, while delivery covers an extra 6% and drive-thru accounts for 4%. This means more than half (an off-premise total of 58%) of Britain’s foodservice industry visits involve consumers carrying food and drink away from the point of purchase or getting other people to carry food and drink to them. Eating food on the go suits a busy consumer lifestyle but there is also a financial appeal for consumers and operators. NPD Group said it was a “winner” for consumers because much on-the-go eating and drinking comes with attractive meal deals that save money, therefore people can justify multiple food-to-go purchases. It’s a winner for operators, NPD Group said, because food-to-go prices are usually lower than sit-down consumption (food to go represents 48% of total visits but only 29% of spend). That 19 percentage point gap gives an operator ample scope for increasing the average bill. The NPD Group insights director Dominic Allport said: “Breakfast, lunch, dinner or just a snack, when you buy food or drink away from home you have two main choices – eat it in the premises in which you made the purchase or eat it on the go. The lion’s share is food to go and reflects how consumers are trying to save time and money. For many of us, working life means rushing to our workplace and then rushing around again during meal breaks. Food to go is an integral part of our lifestyle and underlines how much we are keeping an eye on the clock and on our wallets.” About 20% of visits result in food and beverages consumed back in the workplace or at school/college. However, 8% of visits see food or drink making it no further than the car – that’s the same as each Briton eating or drinking in their car 14 times a year. About 7% eat or drink while walking along the street or sitting in a public space such as a park. More than 292 million foodservice visits result in food being consumed on public transport. This could be the next big trend, NPD Group said, it is currently a small amount (3%) but consumption of food and drink on public transport is growing five times faster than the overall food-to-go trend. Looking at dayparts, food to go is eating into breakfast (50% of all visits), lunch (48% of visits), and snacking (59% of visits). Dinner is not immune to the voracious appetite of eating food to go either, with 37% of all dinner visits comprising food consumed on the move. Allport added: “A generation ago, food to go might stretch little further than a sausage roll, a bag of chips, a cheeseburger, a sandwich or a cream bun. Today’s offerings inject innovation, portability and ease-of-consumption across a huge range of international hot and cold cuisines to create exciting meals, snacks and beverages for any time of day. There’s no doubt foodservice operators are grasping the food-to-go opportunity by offering increasingly appetising and healthy options.”