The 2007 accounts for Gordon Ramsay Holdings (GRH) were finally available at Companies House this morning, some seven months late. The accounts seemingly include all the chef’s UK restaurant interests.
The accounts confirm that sales in the year ended 31 August 2007 were £41.6m – 9% up on the previous year. Other things being equal, this growth – in what, at the time, were generally benign economic conditions – was respectable but by no means spectacular.
However, just six months ago (by which point the 2007 accounts should, by law, already have been filed), Chris Hutcheson, CEO, was telling the Evening Standard that turnover for 2007 was £46m, which would have been an increase of 20%.
The difference between 20% sales growth, which is impressive, and 10%, which is merely creditable, is clearly pretty material so we asked for an explanation. GRH, however, has not been willing to explain to us, in any intelligible terms, why the figures, when finally reported, have fallen so far short of the expectation which Mr Hutcheson himself publicly raised.
Sight of the actual 2007 accounts has strengthened our belief that the purported explanation – reproduced in full below*, so you can form your own conclusion – seems more designed to obfuscate than to illuminate.
Anyone looking for any insight into the actual business of GRH in the Directors’ Report in the account just filed will look in vain. The “highlights” revealed in the “current review of UK operations” in the 2007 accounts are, for all practical purposes, exactly the same as those in the 2006 accounts.
Indeed, so little effort seems to have gone into the report that the “Review of Business” kicks off with a total nonsense. “With an increase in turnover of 9.1% and gross profits up 21.5%, there has been a significant return to profitability after the effect of start up-costs in 2006”, it trumpets.
A “return” to profitability can only happen once after a loss-making period, and said return had already been trumpeted – using a precisely similar form of words – in the 2006 accounts.
* The purported explanation of the shortfall is as follows:
“The decision to include or exclude intellectual property streams
when involving what can now total millions of pounds will be based on the view of our professional advisors. It is the difference
between the publicly available view of corporate earnings and the
private earnings of an individual which are aligned to the
intellectual property of the brand bearer. Such matters are for
discussion with our accountants and HMR&C only. The more seasoned financial journalists would have an immediate understanding of this.”
The 2007 accounts, like the 2006 accounts, appear to include no “intellectual property streams”, so it is very difficult to see what intellectual property has to do with it. The accounts themselves state that the turnover figures give “an indicator of the underlying growth performance of the restaurants”. Nothing about intellectual property there!
PS (5 March) The accounts are subject to much commentary from ‘more seasoned financial journalists’ in today’s Times, Guardian and Financial Times.
Who’d have thought to look for the fact that GRH had breached its financial covenants in the note on ‘Accounting policies’? The fact that the company has breached its covenants is not, we presume, an ‘accounting policy’. We’re obviously innocents in these things, but as the report contains a section entitled “Principal risks and uncertainties”, wouldn’t you expect to see – there – an explicit reference to an issue which could presumably imperil the whole future of the business?
PS (6 March) If you ever feel that Ramsay doesn’t always get the most sympathetic reception in the press, here’s a little story in the Guardian which may help explain why.
Follow hardensbites Follow hardensparty
Become a Harden's fan
