Gusto made £1.8m loss in year leading up to administration, owed £11.9m before £2.53m sale: Premium Italian restaurant operator Gusto made a £1.8m loss in the year leading up to its administration and owed circa £11.9m before its £2.53m sale to Cherry Equity Partners, an administrators’ report has revealed. Propel revealed last month that seven of the 13-strong company’s sites had been acquired by Cherry Equity Partners – the investment vehicle led by Ed Standring and Jamie Barber and backed by an international family office – via a pre-pack administration process, saving 302 jobs. The other six sites are set to close, resulting in circa 190 redundancies. A report from administrator Interpath Advisory revealed in the year to 30 September 2024, in accounts not yet published to Companies House, Gusto made a pre-tax loss of £1.8m (2023: £3,273,000) and reported turnover of £27.2m (2023: £26,679,000). The report said at the time of the sale, sole secured creditor Ensco was owed £7.9m, circa £190,000 was owed to preferential creditors, circa £1.3m owed to HM Revenue & Customs (HMRC) as secondary preferential creditor, and circa £2.5m to unsecured creditors. The report said: “Immediately following their appointment, the joint administrators concluded a sale to the purchaser for the trade and assets at seven of the 13 sites for consideration of circa £2.53m. Consideration of £1.78m was paid on completion. The balance of £0.75m is deferred and contingent on the assignment of leases, for which the purchaser has entered into an interim licence to occupy whilst lease assignments are agreed with the landlords.” The report said a dividend may be available to HMRC as secondary preferential creditor. “However, the level of dividend payable is dependent on the level of asset realisations achieved and costs paid in the administration,” it said. “The estimated value of unsecured creditors is £2.5m, and based on current information, it is unlikely there will be sufficient realisations to allow a distribution to unsecured creditors. While we consider it prudent to retain all options available, at this early stage we consider that the most probable exit route from administration will be via dissolution of the company.” Giving some background to the administration, the report said that having entered into a company voluntary arrangement (CVA) in October 2020 – allowing it to exit underperforming sites, reduce rents at marginal sites for a limited time and restructure its balance sheet – the company exited the CVA in October 2022 but “struggled to return to pre-pandemic trading levels”. The report said: “Post-pandemic trading has been made challenging by rising cost-inflation, falling consumer confidence, increased employers’ national insurance costs and minimum wage increases.” It said Gusto’s majority shareholder, Palantine, contacted Interpath in December 2024 to assess it options, and after contacting 18 businesses to understand their appetite for acquiring the company, seven advised that they were interested. This ranged from a solvent share sale of the company to an acquisition of Ensco’s debt at a discount or a pre-pack administration. A further process to explore the sale, investment, refinance and restructuring options for the group led to 21 interested parties signing non-disclosure agreements. Five indicative offers were received – with four of them for the business and assets of the company through a pre-pack administration sale – and Cherry Equity Partners was selected as the preferred bidder. The report said: “The offers not proceeded with were either for lower overall consideration or lower consideration on completion, with a high element of deferred consideration that was contingent on lease assignments. In the circumstances, the joint administrators are of the view that concluding the pre-packaged sale to the purchaser provides the best return for the company's creditors, preserves and mitigates employee and other claims, when compared with the other offers and alternative of a wind down administration or liquidation.” Gusto was founded in 2005 by Living Ventures, the hospitality and development platform led by Jeremy Roberts and the late Tim Bacon. Palatine backed a management buyout of the business in 2014, with Beechbrook providing a mezzanine loan. Over the ensuing 11 years, the company has established itself as a “best-in-class operator, providing a premium, Italian inspired dining experience” from an estate of city centre and neighbourhood sites, with a footprint stretching from Edinburgh to Oxford. The company, which operates half of its sites in the north west, opened its first southern site, in Oxford, at the end of 2022 after a £1.8m investment. Gusto features in the Propel Turnover & Profits Blue Book, which is available exclusively to Premium Club subscribers and features 1,151 companies. Gusto’s turnover of £27.2m is the 435th highest in the database. Companies can now have an unlimited number of people receive access to Propel Premium for a year for £995 plus VAT – whether they are an operator or a supplier. The single subscription rate is £495 plus VAT for operators and £595 plus VAT for suppliers. Email kai.kirkman@propelinfo.com to upgrade your subscription.

TGI Fridays UK reports covers up 10% since relaunch: TGI Fridays UK, the Calveton and Breal-backed business, has reported a marked improvement in sales performance one month after its landmark 4 July relaunch – the biggest menu overhaul in the brand’s history. Since the relaunch, covers have increased by 10% compared with year-to-date performance, fuelled by a renewed focus on value and the repositioning of the grill as the brand’s signature category. Grill sales have surged from 17% of total sales mix pre-launch to 28% in July, with three new dishes – the Texas Grill, Beef Short Rib and Mother Clucker Burger – breaking into the top ten best-sellers within weeks. TGI Fridays said its app-exclusive offers, including “two for £15” and “three for £18”, are driving significant uptake and repeat visits. Alongside this, the brand said a refreshed dessert line-up is boosting incremental sales and helping to deliver a strong finish to the guest experience. TGI Fridays has redeveloped its guest experience using a new team model and more than 2,000 team members have been retrained. This has led to dish ratings and net promoter scores climbing beyond industry benchmarks since the relaunch, the brand added. On Monday (18 August), TGI Fridays will debut Shake Me to Dubai, a limited-edition £7 milkshake inspired by the viral “Dubai chocolate” trend, featuring pistachio cream, kataifi pastry, whipped cream and rich milk chocolate sauce. Rhiannon Scarlett, chief marketing officer at TGI Fridays UK, said: “This relaunch was about bringing TGI Fridays’ heritage of bold flavours and high-energy hospitality into a new era – and the early results speak for themselves. We’ve grown covers by 10% and transformed the grill into a true growth engine, while delivering the value and theatre guests expect from TGI Fridays. The momentum we’ve built this summer is just the start.” At the time of the relaunch, Julie McEwan, chief executive of TGI Fridays, told Propel the company was launching a “full brand reset that reinforces everything people have always loved about us”. It came as the 49-strong business, which was acquired out of administration by Calveton and Breal last October, unveiled what it called the “ultimate comeback”.

 

Valiant Pub Company secures further £14m in debt financing to support growth: Valiant Pub Company, which was founded by Hawthorn Leisure co-founders Gerry Carroll and Mark McGinty at the start of 2021, has secured a further £14m in debt financing. The funds, provided by Metro Bank, will help support Valiant’s growth plans. Jen Sloyan, Valiant chief financial officer, said: “We currently own and operate around 90 community pubs across the UK, and this funding will enable us to continue to invest in great pubs and great communities. We value the partnership with Metro Bank and appreciate its ongoing support.” This latest facility brings Metro Bank’s total funding to Valiant to £26m. Valiant is backed by Njord Partners, which provides financial support to the group as well as deep operational and strategic expertise. Valiant said with Njord’s continued backing and debt capital, it is well-positioned to grow rapidly in coming months and transform local pubs into thriving community hubs. The facility was arranged by Paul Robinson at Metro Bank, with Sloyan leading the transaction. Metro Bank was advised by HCR Legal and Colliers. Advisers to Valiant Pub Company were Gosschalks. Last month, McGinty, who was Valiant’s chief operating officer, succeeded Carroll, who has moved to the role of executive chairman, as chief executive.