The accounts for Gordon Ramsay Holdings for the year ended 31 August 2008, filed yesterday paint not only a catastrophic picture of decline, but also a picture entirely at odds with earlier statements by the company.
As usual, the accounts appear to have been sent to favoured media in advance of them being generally available via Companies House (so this article may need to be revised when final figures are fully public). As reported in the Evening Standard, however:
* Turnover dropped 14 per cent from £41.59 million to £35.57 million
* Profits at his London restaurants fell 87 per cent from £3.05 million to just £383,325.
What is striking if you are following this story is not the poor figures: we all know – not least thanks to an interview Gordon Ramsay gave to the Sunday Times a few weeks ago – that the company hit hard times last year. Rather, it's the stark contrast between the facts as they are now emerging, and the statements which the company was making at the time.
Last June, for example, just three months before the end of the financial year (August 2008) for which accounts have just been filed, a spokesman for GRH told the Evening Standard of a sales forecast of “more than £70 million, a near 50 per cent increase on last year”.
But what we got, was a 14% drop!
We just don’t understand how – with three quarters of the relevant financial year already gone – a multi-million pound company can advertise a rise in sales (not profit, which is harder to tie down) of 50 per cent, and then ultimately report a figure which is – to all intents and purposes – just half the forecast. They must have been expecting one hell of a fourth quarter! (We’re trying to get an answer from GRH on that, and, if we get one, we'll share it with you.)
The same sort of questions arise, even more starkly, in October 2008 – some two months after the financial year end – when a GRH spokesman told the Evening Standard that the business looked forward to a “stunning year” as “everything is firing on all cylinders”. According to Gordon Ramsay himself in the recent Sunday Times interview – it was around this very time that GRH “... went over [its] overdraft limit and ... did not hit revenue targets”, to the extent that GRH’s bankers seriously considered putting the company into administration.
PS (6 July) This morning’s Daily Telegraph contains an apology by Gordon Ramsay’s PR firm for directly misinforming the newspaper about Ramsay’s financial affairs.