Exclusive – Thai Leisure Group to undergo CVA: Thai Leisure Group, which operates restaurant brands including Thaikhun and Chaophraya, is set to undergo a company voluntary arrangement (CVA), Propel can reveal. Thai Leisure Group, led by Ian Leigh, is believed to have been working with RSM on its options and has now concluded the implementation of a CVA that would deliver the best available outcome for the company’s creditors and the substantial majority of its 600-plus employees. It is thought the CVA proposal, which will voted on next Friday (4 October), involves a temporary reduction in rent on certain sites and the exiting of unsustainable locations. It is understood the core estate is profitable but a handful of sites might be under threat of closure. The estate consists of 20 sites in total – nine Thaikhun, eight Chaophraya and two ChaoBaby plus Yee Rah in Liverpool. Propel understands that despite a programme of cost-cutting to reshape the business in 2017, Thai Leisure Group’s management has been unable to arrest a sales decline. Like-for-like sales are thought to have fallen 9.8% in FY18, contributing to a £0.9m reduction in Ebitda, and 6.3% in the first half of FY19, although Ebitda is believed to have remained profitable at group level. It is believed the situation has been exacerbated by the material cash costs of exiting sites the company was committed to but never opened and its loss-making Nottingham restaurant. Management is understood to have responded to the pressures, which have been compounded by the downturn in the casual dining market, by extricating itself from a number of commitments to open new sites. Other than at Glasgow Fort, which remains empty and non-trading, management was able to successfully negotiate consensual exits with a number of landlords. However, the delays and costs of achieving these exits are understood to have placed considerable strain on the company’s cash flow at a time when market conditions were becoming ever more challenging. The cost-cutting is understood to have included disbanding the openings team, withdrawing staff accommodation – traditionally a mainstay of the Thai chef community – and a reduction in headcount within the training, marketing and operational teams. The central support team was reduced to less than 20 people during the course of three successive restructures. It’s thought the company was able to maintain food and beverage as well as labour margins which, along with the above measures, helped address the company’s cost base but, in the face of faltering consumer demand, sales have continued to fall. Thai Leisure Group is believed to have explored various refinancing and investment options having been through two recent refinancing exercises. Propel understands Santander, which is owed £10.7m by 2022, has agreed to a restructuring of the payment terms of its debt to support Thai Leisure Group during the terms of the CVA and beyond. It is therefore understood a successful CVA alongside a restructuring of the existing bank debt would materially improve the balance sheet, enhance the business’ profitability, permit site investment, and maximise the return to creditors and secure the employment of the majority of its staff. Thai Leisure Group was founded in 2005 and is jointly owned by chef Kim Kaewkraikhot and British entrepreneur Martin Stead. In its last reported accounts, Thai Leisure Group recorded turnover of £38.1m for the year ending 31 July 2017, with Ebitda of £3.13m. It made a loss in the year of £1.33m.

G1 Group reports turnover and Ebitda boost: Scotland’s largest managed pub, restaurant and hotel operator G1 Group has reported turnover rose 5% to £132.2m in the year ended 31 March 2019 producing  Ebitda of £22.5m, more than 8% ahead of the prior year, with growth across all areas of the business. Chairman Brian McGhee said: “As in 2017/18, it is reassuring to see continued solid growth at G1 with significant increases in turnover, operating profit and Ebitda. Despite the challenges from rises in labour, rates and utility costs, a combination of targeted investment and careful management has enabled G1 to achieve strong results. As anticipated, the focus of the group’s resources in the financial year was the development of the Scotsman Hotel and the integration of G101 Off Sales. The refurbishment programme for the Scotsman Hotel has gone really well with excellent customer feedback and has created some attractive events spaces, which are in strong demand. Alongside that the group has created the Grand Café, which has been much admired, and the recent total renovation of the boutique Scotsman Cinema. The integration project for G101 has also been very successful, with all head office personnel now based at Hamilton House. Investment in the people infrastructure of the business, alongside a restructuring of the supply chain, allows G101 the latitude for geographic spread within Scotland, with the first 101 in Edinburgh opening later in the year. Alongside these projects, G1 continued with its programme of reinvestment in the estate, which has reflected in the results for the year. The most significant new investment during the year was the acquisition of a group of apartments at George IV Bridge in Edinburgh, an initial move into serviced apartments for the group, with further projects in Edinburgh and St Andrews in the pipeline for the sector. The group has continued its solid progress in the 2019/20 year and is well positioned to look at further acquisitions that fit with the strategic footprint.” The company added: “Brexit continues to dominate the media and almost certainly affects investment plans and, to an extent, consumer behaviour. There have been high-profile casualties especially in casual dining, where highly leveraged, leasehold chains have suffered in particular. Correspondingly, despite an increase in the supply of rooms and the encroachment of Airbnb, the hotel sector has proved robust. G1’s diversified portfolio, absence of branding and focus on freehold properties have enabled it to meet the challenges and report continued growth and profitability alongside a carefully tailored investment programme.”