Just months after admitting the near collapse of his restaurant empire, Gordon Ramsay has revealed that his group’s profits last year fell by almost 90 per cent.
Accounts filed with Companies House this week show Gordon Ramsay Holdings (GRH) has seen a fall in profits from £3.05m to £383k in the year ending 31 August 2008, as its turnover slipped 14 per cent from £41.6m to £35.6m.
In the meantime, the company`s net debts soared from £4.01m to £9.48m, on which interest rates doubled from £279k to £546k.
GRH`s profit slump has been partly attributed to restaurant closures this year, which has seen him part ways with The Connaught, the Savoy Grill cease trading for refurbishment purposes, the relocation of Petrus and the closure of La Noisette in March.
GRH’s financial situation had become so strained that Ramsay and partner Chris Hutcheson each injected £5m of their own money into the company, while the £10m raised from Ramsay’s TV shows, books and public appearances was also pumped back into the business.
Last month Ramsay admitted that ‘ambition took over’ him as he expanding the GRH empire in the UK and across the globe, with openings at the Trianon Palace in Versailles, Foxtrot Oscar, The Warrington, and The London in Hollywood.
The company consequently handed control of The London in Hollywood and Le Trianon back to their respective hotels, although the company still remains active at the sites in an advisory capacity. GRH also looked to restructuring the business internally, and made substantial redundancies at its head office.
Hutcheson said that while 2008 was challenging both for the group and the economy, GRH was expected to `deliver an improved financial performance`.
"The structural changes that we have made within the Group leave us well positioned for a strong trading year ahead," he said. "Whilst the restructuring has benefited the Group, the significant contribution and commitment of all 750 staff to the business has been integral to moving us to a position of strength."
Now, after GRH breached covenants on its £500k overdraft and £10m of loans with Royal Bank of Scotland in 2007, new banking terms have been agreed, and the company will continue to press forward with openings in Qatar, Tuscany and Sardinia.
Ramsay and Hutcheson will personally fund the opening of the new restaurant at Melbourne’s Crown Casino, as well as the reopening of Petrus and the Savoy Grill with a further £4m investment.